The International Monetary Fund (IMF) wants Pakistan to modify the Constitution to prevent the federal government from giving additional grants without parliamentary approval. The IMF discovered arbitrary and disproportionate use of authority in providing additional grants, with the aggregate of such grants amounting to roughly 15 percent of the yearly budget sanctioned by the National Assembly, reported Express Tribune. A technical IMF mission recommended ways to strengthen Pakistan’s fiscal condition and address its public debt. While some of the IMF’s recommendations can be implemented by the caretaker government, others, such as constitutional changes, have been proposed for the next and fully-elected federal government. The IMF expressly requested that Article 84 of the Constitution be amended for distributing supplemental grants. The lender has further asked to establish an emergency fund and a special assessment by the Auditor General of Pakistan to assess its viability. The lender has also called out Islamabad for its disproportionate use of authority in providing additional grants that roughly amount to 15 percent of the national budget. The IMF noticed major departures from projected budgets in Pakistan due to foreign and domestic challenges, as well as an unpredictable political situation. It suggested amending the Fiscal Responsibility and Debt Limitation Act of 2005 to keep public debt below 60 percent of GDP. The IMF also advised various ways to improve budget execution, such as imposing combined caps for current and development budgets. The fund objected to an inefficient dual budgeting system, which was contributing to an inflated development spending program with insufficient funding. The IMF suggested enhancing the Finance Division’s involvement in evaluating budget proposals and boosting coordination between the budget and expenditure wings of the Finance Division. It also urged for the Finance Ministry’s Macro and Fiscal Policy Unit (MFPU) to become operational.

Source: Pro Pakistani