Pakistan gets IMF’s nod to increase BISP budget

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have reached an agreement to enhance the budget allocation for the Benazir Income Support Programme (BISP).

The budget for the upcoming financial year will increase from the current Rs 470 billion to Rs 530 billion. This adjustment comes amid ongoing discussions aimed at bolstering social protection measures in the country.

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In addition to the budget increase, there are proposals to expand both the number of beneficiaries and the stipends provided. The IMF has noted the necessity of expanding social protection programmes to combat poverty effectively.

Utilising data from individuals registered in BISP, the government aims to implement more targeted subsidies. Furthermore, the government has assured the IMF that provincial authorities will be encouraged to share the social security burden.

A key aspect of this initiative includes protecting BISP beneficiaries through a cash transfer programme designed to alleviate the impact of electricity tariffs. This approach is part of a broader strategy to utilise BISP data for delivering targeted subsidies.

The government plans to increase the number of beneficiaries, targeting the registration of 20 million households by September. Currently, BISP supports 9.3 million individuals, and an additional 300,000 families have been included in the programme this year. The health cash transfer programme now aids 900,000 families, while the education cash transfer programme has enrolled 1.9 million children.

The IMF has called for increased transparency and improved administrative efficiency within BISP to ensure the expanded budget and resources are utilised effectively for the intended populations.

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Despite this progress, differences persist between the IMF and Pakistan regarding fundamental economic goals. The IMF projects GDP growth to be 3.5 per cent in the next fiscal year, while the Finance Ministry anticipates a slightly higher growth rate of 3.7 per cent.

Inflation estimates also differ, with the IMF forecasting it at 12.7 per cent compared to the Finance Ministry’s estimate of 11.8 per cent. Proposed sectoral growth targets include 3.5 per cent for agriculture, 3.8 per cent for services, and 4 per cent for the industrial sector.