ISLAMABAD: Pakistan urged the heads of 16 European diplomatic missions on Tuesday to use their influence to persuade the board of directors of the International Monetary Fund (IMF) to extend a $7.3 billion loan programme instead of $5.3bn offered by it.

At a meeting with a delegation of the heads of missions of 16 EU members, Finance Minister Ishaq Dar also sought their support for arranging finances for the Diamer-Bhasha dam which was top priority project.

The delegation — led by Ambassador and head of EU delegation to Pakistan Lars-Gunnar Wigemark — comprised heads of missions of Austria, Belgium, Bulgaria, Czech Republic, Denmark, France, Germany, Greece, Hungary, Italy, Poland, Portugal, Romania, Spain, Sweden and United Kingdom.

According to a handout, the delegation asked the minister if human rights was a low priority issue for the government. Mr Dar responded that the government had decided to reduce the number of ministries and have a cabinet of 28 members instead of 49 allowed by the constitution. “The clubbing of human rights division (with another ministry) should not be read as lack of any determination on the part of the government to uphold human rights. There shall be no compromise on human rights,” he said.

He told the delegation that Pakistan was committed to its international obligations and negotiations with the IMF were designed to achieve this objective.

During a short span of one month, he said, the budget had been presented and passed, the issue of circular debt had been addressed and a programme with the IMF had been successfully negotiated.

The government has also presented a medium-term economic framework for three years, setting benchmark and timelines for targets set by it.

Mr Dar said the future of Pakistan economy depended on resource mobilisation and revenue generation because the debt inherited by the government stood at nearly Rs14.5 trillion as the previous government had borrowed Rs2 trillion in just one year for financing non-development expenditures and tariff differential.

He said the PML-N government had reduced non-salary expenditure by 30 per cent as part of an austerity plan, abolished secret funds and set a target of 25 per cent increase in revenue for next year.

Mr Dar said the budget for 2013-14 envisaged fiscal adjustments of Rs507bn, including Rs207bn from taxation measures and Rs300bn from measures like IT connectivity, good governance, expansion of tax net, removal of SROs and plugging of leakages.

He said the Federal Board of Revenue had been provided access to bank accounts but to guard against misuse of the authority, fine for tax evasion had been increased ten times.

The minister said the government faced the challenge of settling circular debt of $5bn which should have been taken care of by the previous government or the caretaker set-up. “We have paid $3.2bn to private power producers and intend to settle the balance of $1.8bn preferably by the end of this month”.

He said Pakistan’s successful negotiation with IMF had cast a positive impact on the national and international market, adding that international financial institutions, banks and multinational institutions were now approaching the government for fresh assistance.

The previous government, he said, had deferred tariff rationalisation for political reasons and the PML-N government had to “take one of the most painful decisions of tariff rationalisation”.

Ambassador Wigemark expressed EU’s support for the government and the initiatives taken by it in positive and right direction. The EU, he said, would extend technical assistance to the government and support its efforts to revive the economy and ensure good governance, rule of law and welfare of people.

About the fiscal deficit, the minister said the government had inherited 8.8 per cent fiscal deficit which would be reduced to 6.3 per cent in next budget while medium-term framework envisaged a further reduction to four per cent.