The International Monetary Fund (IMF) has raised objections to Pakistan's proposal for nearly Rs. 1 trillion in power subsidies for FY27, which exceeds the current fiscal year's allocation. The IMF is particularly concerned that over Rs. 500 billion of this amount is earmarked for addressing losses from electricity theft and operational inefficiencies. Meanwhile, officials from the Power Division anticipate a rise in circular debt by over Rs. 500 billion next year, while the IMF has urged that this figure be capped at Rs. 300-325 billion, highlighting the ongoing crisis in Pakistan's power sector.
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IMF Raises Concerns Over Pakistan’s Power Subsidy Proposal
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A recent study shows Pakistan's salaried class pays 352% more in taxes than major business sectors combined, coinciding with the IMF's review of the $7 billion Extended Fund Facility. This highlights the need for fiscal reforms as the government faces challenges in managing power subsidies and circular debt.
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