New Delhi. Neighboring country Pakistan, which is struggling with poverty, hunger and debt crisis, has faced another problem. IMF, the international organization which is continuously distributing loans to Pakistan, has rejected the government’s proposal to reduce GST rates. The Government of Pakistan had pleaded that its population rate is increasing rapidly and to control this, the prices of contraceptive measures like condoms and pills will have to be reduced. But, IMF has rejected this proposal. The question arises that why did such a situation arise in Pakistan that the IMF started interfering in its internal affairs. The answer to this will come later, first let us understand why this condom crisis is increasing in Pakistan.
In fact, Pakistan is currently facing the highest population growth rate in the world. Besides, its inflation rate is also increasing. Obviously, this inflation is also affecting contraceptive measures like condoms. Now in a country where there is shortage of food, the people will first arrange for food for two days or will run after population control measures. To avoid this problem, Shehbaz Sharif’s government had recommended to the IMF to reduce GST rates on contraceptive items including condoms. But, the IMF clearly refused this and said that any such relief can be considered only in the next financial year.
How much does GST cost on condoms?
According to Pakistan based news portal ‘The News’, currently 18 percent GST has to be paid on condoms there, hence its price is higher for the common man. Now that the IMF has clearly refused any reduction in this, the neighboring country will have to depend on other options to solve this problem. IMF has said that any such relief measures can be discussed only in the upcoming budget, not before that.
Why is IMF pressure on Pakistan?
Things will not be cheap in Pakistan, the bigger question is that why is IMF so involved in the internal affairs of the neighboring country. The answer is that Pakistan is currently under surveillance under the bailout program of IMF. Because of this, IMF has imposed strict conditions on Pakistan’s taxes, expenditure and revenue. Obviously, Pakistan has to talk to the IMF before taking any decision on things related to this. This is the reason why the Pakistani government cannot reduce the prices of condoms in its country even if it wants to.
Why did IMF refuse?
According to the report, the Finance Department of Pakistan sought permission from the Washington headquarters of IMF through email to reduce GST. But, the IMF refused because this step would affect Pakistan’s revenue. IMF estimates that due to GST cut, Pakistan’s revenue may fall by Rs 40 to 60 crore. Even during the virtual meeting with Pakistan PM Shehbaz Sharif, IMF officials refused this step.
Pakistan is far from IMF’s target
IMF clearly said in its reply that Pakistan’s demand cannot be accepted because it is not possible to give tax relief in the middle of the financial year. Especially when Pakistan is already lagging behind the revised revenue target. The report also says that the IMF has refused to reduce GST not only on contraceptive items but also on sanitary pads and baby diapers.
What is the population growth rate of Pakistan?
Why this matter is so serious for Pakistan and how many dangers it may pose in the future can be estimated only by looking at the population growth rate of the neighboring country. The population growth rate of Pakistan is 2.55 percent, which is the highest in the world, because according to this rate the population of Pakistan increases by more than 60 lakhs every year. That too when Pakistan’s economic policies have been completely ruined and the country is completely dependent on IMF loans and relief packages. Recently, IMF has imposed 11 new conditions on Pakistan, under which it has started a bailout program of 7 billion dollars. Because of this, in the last 18 months, IMF has implemented 64 types of compliance policies on Pakistan.
