The World Bank (WB) has cautioned the government that Pakistan can lose the funding for the “2nd Resilient Institutions for Sustainable Economy (RISE-II)” project if the country fails to complete prior conditions of the project.
Sources in the Finance Ministry told ProPakistani that the World Bank conveyed its message to Pakistan through a letter after the recent meetings between Pakistani officials and the Bank’s Vice President of South Asia Region, Hartwig Schafer.
The WB team discussed the progress on the proposed budget support operations, which include the RISE-II and the Program for Affordable Energy (PACE).
The officials of the Bank said that the country has to implement five prior actions (PAs) to secure the funding for the project for the next fiscal year.
The World Bank has prescribed the following prior actions for the RISE- II.
The Finance Division will have to issue revised Rules of Business following the amendments to the Fiscal Responsibility and Debt Limitation Act (FRDLA), 2005, to provide legal mandate to the Macro-Fiscal Policy Unit; and for the automatic safeguards in case of breach of ceilings as per the FRDLA.
The Provincial Finance Departments will need to notify regulations for the implementation of the Fiscal Responsibility Laws enacted by provincial assemblies that are consistent with the Federal FRDLA amendments.
This prior action was not completed as the prior action (PA) stipulates that the Finance Department is to issue revised rules after the passage of the FRDLA.
The Finance Division will notify the transfer of responsibility for the choice and pricing of a retail debt instrument from the budget wing through the Central Directorate of National Savings to the Debt Management Office (DMO) and issue detailed rules for the DMO. This is also not completed. The revised rules for the DMO can be issued only after the passage of the FRDLA amendments.
The Provincial Boards of Revenue will issue notifications adopting the FBR valuation tables as their District Collectorate valuation tables to keep property assessment rations at 85 percent of market value.
This PA is partially completed as Punjab has opposed the adoption of the FBR valuation tables because the Punjab Board of Revenue (BoR) maintains that its tables are accurate. Balochistan argues that higher valuation will lead to lower compliance and lower revenue collection.
To absorb Rs. 73 billion of Power Holding Pakistan Limited (PHPL) debts into public debt stock in FY 21 and refund Central Power Purchasing Agency-Guaranteed (CPPA-G)/ Discos Rs. 240 billion for overcharged GST.
This PA is also partially completed as Finance Division issued a notification confirming the absorption of Rs. 73 billion of PHPL, however, this is at risk because of the current fiscal situation, with the FBR unlikely to be able to provide any refund.
The Finance Division and Provincial Finance Departments have to issue implementing regulations following the approval of the common General Sales Tax law passed by the Federal and Provincial Assemblies to generate a harmonized GST for goods and services across the country.
World bank, don’t approve loan to our corrupt govt. First, check their bank balances, recover your loans from them. You corrupted our politicians, now take your loans from them. Public should not pay at all. Your Loans transferred directly to our corrupt politicians accounts straight away. Our politicians are billionaires, they can now buy judiciary, Generals and they can issue loans to WB and IMF. R u people blind? Don’t you know, where loan money goes.