Industrial subsidies burden may be cut by 91%

The International Monetary Fund has agreed to review a proposal backed by the Special-Investment Facilitation Council aimed at reducing the subsidy burden of the industrial sector by 91%. This initiative aims to make Pakistani exporters more regionally competitive by potentially lowering their monthly bills by up to 29%.

Pakistani and IMF authorities are scheduled to hold virtual discussions early next week. The IMF’s endorsement could lead to a reduction in electricity bills for large industrialists and small manufacturers, ranging from 16% to 29%, according to government sources.

The IMF will also assess the practicality of the government’s plan to write off the Rs268 billion commercial debt of Pakistan International Airlines, incorporating it into the public debt. Additionally, the Rs1.28 trillion energy sector circular debt reduction plan will be taken up by the IMF early next week.

The proposals, including cleansing the PIA balance sheet, lowering electricity bills for industrialists, and eliminating Rs1.27 trillion circular debt, have been vetted by the 9th session of the SIFC during its February 2nd gathering.