Next budget to be under IMF directives: PEW

F.P. Report

ISLAMABAD: President Pakistan Economy Watch (PEW) Dr. Murtaza Mughal has claimed that all the condition of IMF have been accepted to revive stalled programme including the unprecedented burden on the masses and unmatched liberty to the State Bank of Pakistan.

In a statement issued here on Saturday, he said that the harsh conditions of IMF will hit the economy, masses and the business community like never before.

Dr. Murtaza Mughal said that in exchange of a loan of 500 million dollars, new taxes of Rs700 billion will be imposed, power tariff will be hiked to the tune of Rs900 billion and 36 tax exemptions will be reversed.

He said that the SBP will be given unprecedented liberty with unquestionable powers and exceptional immunity which may not leave the bank and government on the same page resulting in serious problems.

The main task of the central bank is being altered to contain inflation while the government will try to ensure development which will create divisions, he observed.
The government and SBP will not remain on the same page and balance between containing inflation and triggering development will become difficult.

Dr Mughal said that the SBP governor will get a salary of 13 million rupees which cannot be justified, adding that western countries gave some autonomy to their central bank after achieving developmental goals and a country facing serious debt problem should avoid it.

It is amazing that the government will not be able to amend the SBP Act without the approval of the central bank which will seal the fate of the country.

Zimbabwe liberalized its central bank in 1995 which pushed up inflation from 20 percent to 230 million percent in 2008 prompting printing of currency notes of 10 billion domination while the economy was shattered.