Finance Minister Shaukat Tarin on Wednesday said the International Monetary Fund “should not” worry about the prime minister’s relief package provided to the public on fuel and electricity prices, adding that the government was providing Rs104 billion worth of subsidy on petroleum prices.

“Yes, we have consulted the IMF on the relief package. They should not worry about this as we are not increasing the fiscal deficit because of this and we are not taking any loans. We have some capacity because our revenues have improved,” he said while addressing a press conference in Islamabad.

The finance minister added there were some revenues, which the government had “not captured” earlier like it had dividends of SOEs for the last 3-4 years that were not declared. Moreover, the government did not add it in the budget, he said, adding: “We have 1.2 trillion [of dividends] of oil companies and we still have Rs950 billion if we cut leakages. So, we were of the view to capture this and we will invest much of the amount on the circular debt.”

He added the government had decided to take some of the amounts from the PSDP and some of the amounts has been taken from Covid and Ehsaas fund. “So I think the IMF should not have any objections to this [fuel and electricity relief].”

Tarin shrugged off the IMF’s concern on the political stability, saying that the people would not be able to bear the burden if the global lender continues to impose more restrictions. He urged the IMF to ease restrictions and expressed hope for the next meeting.

Elaborating on the government’s decision to provide such a relief, he said the government was providing Rs104 billion worth of subsidy to the public on oil prices and the Rs5 per unit relief on the electricity would be applicable to the people using 700 units of electricity.

“We are bringing the people out of this burden and people are not aware of this,” he said, adding that over the last three years, the global oil prices and inflation was affected by three things – including the Covid-19 pandemic, fuel supply distribution after easing of the pandemic, and the Russia-Ukraine conflict.

“We will give Rs136 billion worth of subsidy to the public on fuel for the next 4 months,” Tarin said.

The finance minister dispelled an impression that the government’s decision to provide such relief was a response to the growing opposition pressure. “Realistically we are trying to help the people and this package is not about political consideration,” he said, adding that the relief was for the urban lower middle class, middle class, and salaried class.

He "could not fathom" the media report about Pakistan seeking financial support of about $21 billion from China. During the visit to China, he said the premier had a meeting with big companies and met the Chinese leadership. Tarin said assistance was sought in populating industries made under the China-Pakistan Economic Corridor, boosting the agriculture sector, strengthening the IT sector, and calling for balanced trade with the neighbouring country.

“We did not talk about transactions,” he said.

To a query, he said the ministry was bearing Rs800-900 billion on the oil subsidy and it could have "hit Rs7 trillion".

To another query, he said: “97% is the satisfaction rate of the health card scheme, which is phenomenal. In the six-nine months, we will have moderate inflation with growth. These [opposition] guys have no chance in the next elections so they want to build pressure because this is their only chance. They will not be able to catch up with PTI if they lost this chance.”

Moreover, he said the government did not report a “significant development” that happened in the last month. “Our trade deficit was recorded at $3.1 billion during February 2022, which is a pre-Covid statistic. The deficit went down by 28 per cent compared to the previous month (January) and 35 per cent when compared to December 2021.”

The finance minister was of the view that if remittances of around $2.5 billion were deducted from the above-mentioned statistics, the deficit in actual terms has come down to “just $600 million,” lamenting that such an “achievement was not highlighted.”

In addition to this, he said that Inflation in January 2022 was recorded at 12.95 per cent which came down to 12.2 per cent in February. “If the price hike in tomatoes is excluded from this figure, the inflation was recorded around 10.8 per cent, means the decline of 2.2 per cent in one month.”

The minister said the inflation from November to February “remained flat.”

He was of the view that the information technology sector, which was a new avenue of export, could generate $50 billion worth of exports. He added that such an avenue, which is different from the conventional avenues of food and textile, could fill the country’s import and export gap.

Tarin said the government was bringing incentives for the IT sector in order to tap its complete potential.

To another query on the apparent impact of the PM’s reaction to the foreign envoys' letter during the speech in Melsi, he said the European Union and the US were the two biggest export destinations of the country which account for 62-64%.

“The PM expressed his sentiments. Where are you [EU] when such a thing occurs in Kashmir,” he said, “so don’t put such restrictions on us that what we won't say or not.” He dispelled an impression over the EU’s apparent actions, saying that sovereignty could not be compromised.

“So, I think it’s my prime minister’s right as if he thinks there are double standards. He [PM Imran] only reacted to that [foreign envoys letter to Pakistan to condemn Ukraine],” he said, adding that the premier did that public and maybe it should not have been done publicly.

“I cannot comment on that and I just told the spirit and we should have an independent foreign policy.”