KARACHI: The government is set to table a finance bill in the next National Assembly session to curb the fiscal slide and gain a better grip on the economy next week, and hopes to make proposed measures effective by the start of October following clearance from the Senate. The crucial decision on the IMF will be taken after that.

Talking to Dawn over phone from Islamabad, Finance Minister Asad Umar said that the government is cognizant of the full extent of the country’s economic vulnerabilities as it has completed the initial assessment exercise.

“We are finalizing and fine tuning the set of corrective proposals that will be tabled in form of a fiscal bill in the next National Assembly Session, hopefully on Friday Sep 14th.”

“After NA clearance the said bill will be forwarded to the Senate. The law grants 14 days time to Senate to deliberate after which it has to be returned. We intend to get it enacted as soon as the NA receives it back for the new steps to become operational from Oct 1.”

The PTI government is understood to be contemplating tighter fiscal and monetary policies to deal with issues of resource gap, inflation and trade imbalance. The drawdown of the foreign exchange reserves that poses an immediate challenge to the viability of the country’s economy has, for some unexplained reason, failed to draw the attention it deserved.

The foreign exchange reserves of the central bank dropped by $341 million to $9.8 billion by Aug 31 from $10.2bn at the end of the week before on account of external payments. Reserves at present are barely enough to cover two months imports.

The insiders in the finance ministry have suggested that the government is actively considering a proposal to reverse tax cuts passed in the last budget that cost the exchequer over Rs100bn.

Asad dismissed the impression that the PTI government has shut off the IMF window permanently. “The government is in the process of exploring all possible options to handle the external sector vulnerabilities that include opting for the IMF programme. There is an ongoing routine engagement with the donor and a staff delegation of IMF for post programme review is scheduled to visit Islamabad in the first week of October.”

He categorically said that the decision on the IMF programme will be taken later. “We have been working on parallel lines. Besides IMF we have also been exploring bilateral options of securing foreign exchange inflows. We have shortlisted some countries for exploring possibilities.” He did not name names.

“We would also like to draw on the input of the members of Economic Advisory Council in this regard,” he added.

Contesting the impression of a stalemate in Islamabad he said: “We had a series of meetings in the finance ministry to take stock of the situation over the past three weeks. The reports on the key economic fundamentals were shared and discussed with the State Bank team. PM Imran Khan has also been briefed.”

Asad Umar said the government is on track to deal with challenges it inherited on all fronts including the economy.

Published in Dawn, September 8th, 2018