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Farmers deprived of power concessions under IMF diktats

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2 years ago

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  • Govt plans to collect Rs14bn from agriculture consumers.
  • Farmers will now pay Rs16.60 as the base rate.
  • The decision has been implemented immediately.

ISLAMABAD: As a part of the conditions laid forth by the International Monetary Fund (IMF) to unlock more than $1 billion in funding, the coalition government has discontinued the power subsidy given to agriculture consumers.

Prime Minister Shehbaz Sharif announced a Kissan Package for the farmers in October 2022 in the wake of the unprecedented flash floods which was later notified by the National Electric Power Regulatory Authority (NEPRA) in December last year.

However, after providing the subsidy for two months, the government has now discontinued the package with immediate effect owing to the conditions set by the Washington-based lender.

“Federal Cabinet […] has approved the Discontinuation of Kissan Package for base rate relief of Rs3.60/kWh to private agriculture consumers from 1st March 2023,” the notification issued by the Power Division read.

It mentioned that the decision of the federal cabinet was conveyed for immediate implementation and necessary action.

The premier announced the relief package for the growers due to cataclysmic flooding caused by historic monsoon rains that washed away roads, crops, infrastructure and bridges, killing over 1,700 people and affecting more than 33 million, over 15% of the country’s 220 million population. 

In concurrence with the announcement, the NEPRA had reduced the power tariff by Rs3.60 per unit at the then-base rate of Rs16.80 after which the farmers were consuming electricity at the base rate of Rs13.

However, after the discontinuation of the facility, agriculture consumers will now pay Rs16.60 in the base rate.

Following the decision, the federal cabinet is expected to collect Rs14 billion by June. It should be noted that the Power Division has written letters in this regard to the K-Electric and other distribution companies.

The division has also informed the Ministry of Finance and the Ministry of Food and Agriculture via letters written in this regard.

The IMF has placed four prior actions including the imposition of a permanent power surcharge of Rs3.39 per unit plus 0.43 paisa (Rs3.82 per unit), market-based exchange rate, hiking discount rate by 150 to 250 basis points and securing confirmation from bilateral partners to meet external financing gap of $7 billion. 

On the power surcharge, the Pakistani side argued that the EFF programme was going to expire in June 2023, so how the IMF could demand slapping a permanent surcharge of Rs3.82 per unit.

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In interbank trade, the Pakistani rupee beats the US dollar.

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7 days ago

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In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

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Phase II of CPEC: China-Pakistan Partnership Enters a New Era

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1 week ago

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The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.

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The inflation rate in Pakistan dropped to its lowest level.

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1 week ago

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On December 2, core inflation as determined by the Consumer Price Index (CPI) significantly slowed, falling to 4.9% in November 2024 from 7.2 percent in October 2024.

The CPI-based inflation rate for the same month last year (November 2023) was 29.2%, according to PBS data.

Compared to a 1.2% gain in the prior month, it increased by 0.5% month over month in November 2024.

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