Budget Special: ‘Fueling’ questions

‘No new taxes’ in the FY24 budget, a headline on the website of this newspaper said after the presentation of the budget on June 9. Petrol and petroleum products were no exception. Despite the ballooning fiscal deficit, no new levies were imposed on them. Budget makers were under pressure. They were obligated to follow the instructions from the International Monetary Fund (IMF). The Fund has been insisting that Pakistan should meet all its budgetary targets. Before unveiling the budget document, Prime Minister Shahbaz Sharif underlined that “no hurdle was now left” in signing a staff-level agreement between Pakistan and the IMF as the country has already met “all” prior conditions despite economic hardships. The IMF has made it clear that Pakistan needs to eliminate subsidies, increase fuel prices, ensure a market-based exchange rate without any governmental intervention, and improve tax collection. Only on Thursday, the IMF resident representative for the country had told Reuters that for an agreement, Pakistan needed to restore the proper functioning of the foreign exchange market, pass the fiscal year 2024 budget consistent with (the IMF) programme objectives, and secure firm and credible financing commitments to close the $6 billion budgetary gap.