Beleaguered Pak Govt likely to implement 'painful' economic decisions from Feb 1

Islamabad, Jan 16(ANI): The Pakistan Government is planning to implement some 'painful' economic decisions from February 1, following an unprecedented 510-billion-rupee budget deficit.

The government has decided that subsidies on power tariff, oil prices and other sectors will be withdrawn, official sources revealed.

The Daily Times quoted the sources, as saying that the painful economic decisions had become necessary, as the government had missed its initial upward revised target of containing the budget deficit at 2.6 percent of the GDP.

The budget deficit for the first half (July-December) of the ongoing fiscal year 2010-11 has now been estimated at 3 percent of the GDP- around 510 billion rupees- against the 442-billion-rupee initial target, the sources said.

A five-member committee constituted by Prime Minister Yousaf Raza Gilani would hold meetings with the heads of all political parties to develop a consensus on economic decisions, the sources added.

They also said the government would also try to develop a consensus on the implementation of the performance benchmarks agreed with the International Monetary Fund (IMF), World Bank (WB) and the Asian Development Bank (ADB), until June 2011.

A nine-month extension allowed by the IMF has provided Pakistan with time for completing the reformed GST (RGST), implementing a set of measures to correct the fiscal policy and amending the legislative framework for the financial sector.

The IMF is soon expected to hold discussions with Pakistan for the fifth review, and propose a set of performance criteria for end June and structural benchmarks that would form the basis for the sixth and final review under the Stand-By Arrangements. (ANI)