The government has approached the Islamic Development Bank (IDB) for urgent release of $160 million to bridge the fiscal deficit resulting from the delay in release of $300 million dues under the Coalition Support Fund (CSF).
Spokesman of the Finance Ministry Rana Assad Amin told reporters on Wednesday that the government has approached the IDB to make up for the shortfall in foreign inflows resulting from the delay in CSF dues. Earlier IDB had offered a credit line of $400 million on commercial terms but the government refused.
When asked whether the funds would be released by IDB during the current fiscal year, he said that efforts were being made in that regard.
However, he said that if everything goes as anticipated there should be no problems. The funds demanded from IDB are half of the CSF amount overdue. The inflows from IDP would be used for financing unlike the CSF dues which were receipts for the expenses incurred during the current fiscal year.
According to Pakistan’s calculation CSF dues are $3.5 billion till June 30, 2011 out of which $1.8 billion were mature for release. However the US administration conveyed that it would only be releasing dues that matured before December 31, 2010. That amount is around $500 million out of which Pakistan hopes to get $300 million before the end of the current fiscal year.
Spokesman said that the government has also received $162 million from the World Bank for education sector reforms
in Punjab and Sindh on June 28. $200 million from the Asian Development Bank for second generation capital markets reforms are expected to reach by June 30.
Giving details of the fiscal deficit he said that the total expenditures amounted to Rs2274 billion during the out going fiscal year whereas the federal revenue receipts amounted to Rs1238 billion. He said that provinces have surplus of Rs80 billion currently and a further Rs142 billion would be transferred to provinces on June 30.
This would allow provinces to easily generate surplus of Rs120 billion by the end of current fiscal year. He said that the fiscal deficit without CSF dues was 5.1 percent of GDP or Rs916 billion, but due to delay in their release it would increase to 5.3 percent or Rs956 billion in the current fiscal year. The government had been under extreme pressure from the International Monetary Fund (IMF) to retain its revenue below 5.3 percent of GDP during
the current fiscal year. About the non tax revenue target, he said, it was set at Rs524 billion for the current fiscal year. He added that it was expected to remain low as the government could not auction 3G telecom licenses which were expected to generate Rs60 billion and petroleum levy target of Rs110 billion was revised to Rs85 billion.
The gas development surcharge was expected to generate Rs31 billion but it might not go beyond Rs28 billion during the current fiscal year. He said earnings from central bank were estimated at Rs185 billion out of which Rs125 billion have been received whereas Rs60 billion would be received on the last day of the fiscal year, June 30.
On the release of cash grants of Rs20,000 to 1 million to those affected by floods during the current fiscal year, he said that they would be paid to the victims in the first month of the next fiscal year. The federal and provincial governments would contribute equally to generate funds of Rs32 billion but the releases would be made on the basis of assessments by provinces.
