IMF releases structural benchmarks details

Pakistan should announce the gas tariff rationalisation plan till the end of this month.

ISLAMABAD: The International Monetary Fund (IMF) has released the details regarding structural benchmarks, Express News reported on Monday. These benchmarks are the new reform measures introduced in regard to the approved IMF bailout programme.

It includes 11 conditions: 

• Pakistan should announce the gas tariff rationalisation plan by the end of this month. Revenue generated from this plan should equal 0.4% of Gross Domestic Product (GDP).

• In order to make the State Bank of Pakistan (SBP) sovereign a draft of the law should be presented.

• Pakistan has to make the Central Power Purchase Agency operational.

• Exemptions in income tax, sales tax, federal excise duty, custom duty through statutory regulatory orders (SRO) should be withdrawn by Pakistan. Steps for the additional revenue need to be taken.

• Pakistan will have to get the draft of Deposit Protection Fund Act ready by the end of September 2014 and then discuss it with the review mission of the IMF.

• Securities Bill draft should be prepared by Pakistan and shared with the IMF team as well.

• By June 2014 26% shares of Pakistan International Airlines (PIA) will have to be privatised.

• Amendment is required in the Pakistan Penal Code 186.

• Criminal procedures 1898 also require amendment.

• An independent and professional audit firm should be hired to audit the energy sector.

• 30 public firms, whose privatisation and restructuring strategy was approved in October by the Cabinet Committee on Privatization (CCOP), should be extradited.

Background

In November, IMF had called for linking the frequency and duration of power outages across Pakistan to the recovery of bills. This, the international lender believes, will discourage rampant power theft and non-payment culture in the country. Increasing power pilferage and non-payment of bills adds to the ‘circular debt’, which eats up the scarce public resources.

Sources familiar with the recent talks between the IMF and Pakistan had told The Express Tribune that the international financial institution had added a new structural benchmark in the $6.7 billion bailout programme.