The International Monetary Fund (IMF) has introduced a series of stringent conditions for Pakistan as part of its ongoing loan program, according to sources within the Ministry of Finance. These conditions are aimed at ensuring fiscal discipline and economic reforms in the country.

One of the key demands from the IMF is for Pakistan to revise the National Finance Commission (NFC) Award formula, which dictates the distribution of financial resources between the federal and provincial governments. Additionally, the IMF will closely monitor the expenditures of provincial governments to ensure compliance with the agreed financial targets.

Discussions are currently underway between the federal and provincial governments to finalize the National Finance Pact, which is expected to address these new requirements. As part of the agreement, Pakistan has committed to limiting subsidies to the energy sector to no more than 1% of its GDP.

In a move to broaden the tax base, Pakistan plans to bring the agricultural, property, and retail sectors into the tax net. This is seen as a crucial step towards increasing government revenue and reducing fiscal deficits.

The government is also set to implement reforms aimed at reducing electricity prices, with a comprehensive package expected to be announced soon. However, future relief on electricity prices, similar to that previously provided by the Punjab government, will not be offered.

Furthermore, the federal government will undergo structural reductions, and support prices for food commodities will not be determined, as part of the broader economic reform agenda.