IMF Raises Concerns Over Rs344.64 Billion in Unapproved Supplementary Grants by Pakistan

ISLAMABAD: The International Monetary Fund (IMF) has expressed serious concerns over the federal government’s disbursement of supplementary grants totaling Rs344.64 billion during the ongoing fiscal year without obtaining prior approval from the National Assembly — a move the Fund says violates Pakistan’s loan agreement under the Extended Fund Facility (EFF).

According to official documents, these supplementary funds were directed toward a wide array of sectors including energy, defense, disaster relief, development schemes, and institutional support. The government is now seeking post-facto approval from the legislature.

The IMF has taken exception to this approach, warning that spending such a substantial amount without prior parliamentary approval undermines fiscal discipline — a core commitment under the EFF programme. The Fund has consistently emphasized the need for transparent and accountable public spending.

The single largest allocation, Rs115 billion, was made to Independent Power Producers (IPPs), a segment frequently flagged by the IMF due to its heavy toll on Pakistan’s budget and the overall energy sector’s inefficiencies.

Defense expenditure accounted for Rs59 billion of the total amount, while Rs30 billion was earmarked for flood relief efforts in Sindh. An additional Rs14 billion was released for solarisation of agricultural tube wells, an initiative intended to lower electricity costs for farmers.

Other significant allocations include Rs23 billion to strengthen the Pakistan Army’s anti-terrorism capabilities, Rs3.7 billion for the Reko Diq mining project, and Rs520 million for the Special Investment Facilitation Council (SIFC).

Development schemes associated with parliamentarians received Rs7 billion, while the Federal Board of Revenue (FBR) was granted Rs6 billion for various operations and upgrades.

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Additional expenditures covered under the supplementary grants include those incurred by the Supreme Court, Islamabad High Court, the Ministry of Interior, and other federal departments.

The IMF’s reaction adds pressure on the government to tighten its fiscal management and adhere strictly to the conditions of the loan programme, especially as Pakistan navigates ongoing economic challenges and seeks continued financial support.