ISLAMABAD: Caretaker Prime Minister Anwaar-ul-Haq Kakar maintained on Tuesday it was not entirely correct that the International Monetary Fund (IMF) had dismissed a government proposal for the adjustment of power tariffs in the country, saying it was still possible to provide “targeted subsidies” to disadvantaged socioeconomic classes.
The government decided to approach the IMF recently after widespread protests in Pakistan over inflated electricity bills and rising petroleum prices that have further increased the cost of living in the country.
The protests broke out after the government decided to remove power subsidies and increase electricity tariffs in July to meet a major IMF condition for the approval of a $3 billion short-term bailout facility.
According to some local media outlets, Pakistan had proposed to spread out quarterly tariff and fuel price adjustments over a period of four to six months, but the global lender rejected the plan.
“That is not the correct way of describing the situation,” Kakar told Dawn News TV while responding to a question about the IMF’s decision to turn down the government’s scheme in a brief interview. “The both sides — the fund and the Pakistan government — have explored many avenues and there is an agreement that the class that does not contribute toward tax payments should not be incentivized. We agree with the fund [on that]. We both share the same approach.”
“But the economic class, which is already contributing toward the tax net, we need to look after them, and there is a disadvantaged socioeconomic class, people who have consumed around 200 units [of electricity],” he continued. “That sort of a targeted subsidy to that section is neither being discouraged and nor being curtailed by the fund or the government of Pakistan.”
The prime minister said it was difficult to deal with the problems related with the smooth functioning of the country’s power sector in the short term.
However, he acknowledged deficiencies in electricity generation, distribution and recovery mechanisms while suggesting a holistic approach to address the problem.
The issue of excessively high cost of electricity was also taken up by a Senate standing committee on Tuesday that criticized the power division for inefficiencies, power theft and losses caused to the overall sector.
Pakistan PM says targeted power subsidies still possible for electricity consumers
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Pakistan PM says targeted power subsidies still possible for electricity consumers
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- PM Kakar maintains it is not entirely correct the government proposal for tariff adjustment was rejected by the IMF
- Pakistan has witnessed widespread protests over high electricity bills, rising petroleum prices amid spiraling inflation