Finance ministry hints at further belt-tightening ahead.

Byline: Khaleeq Kiani

ISLAMABAD -- The government on Thursday hinted at further tightening of civil expenditures to compensate for slippages on targets committed with the International Monetary Fund (IMF) on revenue collections.

This came from the Ministry of Finance at a meeting of the National Assembly's Standing Committee on Finance and ReveAnue as the talks between an IMF visiting mission and the government authorities could not be concluded as per original schedule.

The government's top economic managers are believed to have engaged the fund management through video-conferencing for a smooth way forward as Islamabad changed its goalpost on energy sector and struggled to deliver on revenue side - the two key structural reforms under the 39-month $6bn Extended Fund Facility signed in July 2019.

The sources said energy sector, tax revenues and Chinese loans remained sticking points until Thursday evening.

Spending cuts only way to avoid mini-budget, officials tell lawmakers

'Then we will have to go for further expenditure management', said an additional secretary of the Ministry of finance while responding to questions from members of the national assembly as to how the government would meet IMF targets without a mini-budget.

The said there were some pockets in the civil expenditure where space could be created for example like in pension fund. 'We will make sure there is bare minimum cut in the development expenditure' that was a priority with the government and the IMF.

Also, the additional secretaries of the finance minister - Dr Arshad Mehmood and Sohail Rajput - told the committee that the government hoped to meet any revenue shortfall by Federal Board of Revenue (FBR) through over performance in non-tax revenue, primarily higher than estimated profits of the State Bank of Pakistan (SBP).

Responding to a question, Dr Arshad said the defence expenditure had already been frozen in the federal budget and no more cuts could be expected there. He anticipated some savings due to lower than budgeted interest payments because of reprofiling of short-term debts into long-term.

He said about Rs34bn savings had so far been secured in the running of the civil government as Rs220bn had been spent on civil expenditure in the first seven months against an annual budget of about Rs440bn. The civil expenditure comprised 55pc on salaries and pensions and 45pc in operational expenditure. He explained that operational expenditures could increase in the...