ISLAMABAD, Feb 1: The International Monetary Fund (IMF) has expressed concern over Rs12 billion revenue shortfalls, recorded during the first seven months of the 2001-2002 financial year.
A four-member IMF review mission, headed by Klaus Enders, arrived here on Thursday and held a meeting with Finance Ministry Secretary-General Moeen Afzal and other senior officials of the ministry on Friday.
The mission called upon the officials to meet the revenue shortfalls by specially collecting customs duties adequately.
Informed sources told Dawn that during the meeting, also attended by IMF Senior Resident Representative in Pakistan Henri Ghesquiere, issues pertaining to the revenue slippages experienced in the wake of Sept 11 carnage had been discussed in detail.
According to the sources, although it was a courtesy call, the IMF team held the meeting to have a review of the Pakistani economy keeping in view the first seven months of the current financial year.
The mission was of the view that while the Sept 11 events had caused problems, efforts should be made to improve the performance of the Central Board of Revenue (CBR) by completing its much-awaited restructuring as early as possible.
A decline of 4.81 per cent in the revenue collection was experienced during the first seven months of 2001-2002 in the fourth-time downwardly revised Rs430 billion target.
The original target kept at the time of budget in June last was Rs457.7 billion, which was first revised downward to Rs443.7 billion and eventually to Rs430 billion. Keeping in view the original Rs457.7 billion target, the officials concerned conceded that the shortfall in the first seven months of the current financial year was estimated to be around Rs34 billion.
The sources said the mission had been briefed about the state of the economy, including imports, exports, balance of payment position, trade balance, banking sector reforms and the process of privatization.
The mission, while appreciating that gross foreign exchange reserves have reached to five billion dollars (three billion dollars net with the State Bank and about two billion dollars being maintained by the commercial banks), called for accelerating the process of privatization.
The government believes that it will be able to complete four or five major transactions by May this year with a view to collecting $900 million to $Rs1.3 billion roughly by partially or fully disinvesting Pakistan Telecommunication Company (PTCL), nine oil wells, Habib Bank (HBL), United Bank (HBL) and Saudi-Pak Fertiliser Company.
The IMF maintains that Pakistan’s economic outlook is now clouded by considerable uncertainty in view of the impact of the Sept 11 events and the ongoing slow down in world demand, which is adversely affecting Pakistan’s prospects for growth, exports, and capital flows.
The Fund officials, nevertheless, are expecting that the government will pursue a broad agenda for restructuring and privatizing public enterprises, reducing its role in agricultural marketing, ensuring that administered gas and electricity prices broadly reflect market conditions, deepening the liberalization of the financial sector, and integrating the kerb and interbank foreign exchange markets.
The mission is expected to stay in the country for about two weeks and the successful completion of the review of the economy will lead to the disbursement of second tranche of $109 million out of $1.3 billion Poverty Reduction Growth Facility (PRGF) in March.
The first tranche of $109 million was disbursed to Pakistan in December last year.