ISLAMABAD:The announcement of Pakistan’s Federal Budget 2025-26 has been delayed from June 2 to June 10 due to key disagreements with the International Monetary Fund (IMF) over budgetary targets, particularly subsidy allocations, the Finance Ministry confirmed on Monday.
Speaking during a meeting of the Sub-Committee of the National Assembly Standing Committee on Commerce, chaired by Khurshid Ahmed Junejo, Joint Secretary (Corporate Finance) Sajjad Azhar outlined ongoing challenges in finalizing the budget, citing IMF restrictions under the Extended Fund Facility (EFF).
“The IMF has placed a cap on subsidies, and the Fund has declined to allow any further changes to the revised budget figures already submitted,” Azhar told the committee. He added that the Finance Ministry is still reconciling key figures, prompting the week-long delay in the budget’s presentation.
The sub-committee also deliberated on the Trading Corporation of Pakistan (TCP)’s receivables, totaling Rs 317.5 billion, including Rs 93.7 billion in principal and Rs 223.8 billion in accrued markup. Tensions arose between Azhar and TCP Chairman Syed Rafeo Bashir Shah over whether the markup costs were covered under Economic Coordination Committee (ECC) approvals.
Chairman Shah argued that TCP imported and distributed wheat and urea under ECC directives but has faced pending payments since 2010. Azhar countered that the ECC never endorsed federal coverage of markup costs and that the State Bank of Pakistan (SBP) declined to offer relief, citing the commercial nature of the loans.
The Finance Ministry confirmed it recently secured commercial financing for PIA without discount and is considering similar arrangements to tackle circular debt, with loans pegged at KIBOR minus 0.2%. A proposal is being submitted to the federal cabinet.
Further financial developments include:
- Punjab government committing Rs 26 billion, to be matched by the federal government next fiscal year.
- Rs 15 billion to be disbursed to TCP on behalf of Utility Stores Corporation (USC) and National Fertilizer Marketing Limited (NFML) in the current fiscal year.
- An additional Rs 30 billion to be earmarked in the upcoming budget.
NFML reported all dues, including markup, were cleared in 2023-24.
The sub-committee approved the initial release of Rs 90 billion to TCP, with a second phase to address markup issues. A special audit of TCP’s commercial loans will also be conducted to identify any irregularities.
Committee members Shaista Pervaiz Malik and Rana Atif voiced concern over delayed payments and called for expedited resolution of all outstanding financial obligations.
Story by Mushtaq Ghumman
