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Farmers deprived of power concessions under IMF diktats

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  • Govt plans to collect Rs14bn from agriculture consumers.
  • Farmers will now pay Rs16.60 as the base rate.
  • The decision has been implemented immediately.

ISLAMABAD: As a part of the conditions laid forth by the International Monetary Fund (IMF) to unlock more than $1 billion in funding, the coalition government has discontinued the power subsidy given to agriculture consumers.

Prime Minister Shehbaz Sharif announced a Kissan Package for the farmers in October 2022 in the wake of the unprecedented flash floods which was later notified by the National Electric Power Regulatory Authority (NEPRA) in December last year.

However, after providing the subsidy for two months, the government has now discontinued the package with immediate effect owing to the conditions set by the Washington-based lender.

“Federal Cabinet […] has approved the Discontinuation of Kissan Package for base rate relief of Rs3.60/kWh to private agriculture consumers from 1st March 2023,” the notification issued by the Power Division read.

It mentioned that the decision of the federal cabinet was conveyed for immediate implementation and necessary action.

The premier announced the relief package for the growers due to cataclysmic flooding caused by historic monsoon rains that washed away roads, crops, infrastructure and bridges, killing over 1,700 people and affecting more than 33 million, over 15% of the country’s 220 million population. 

In concurrence with the announcement, the NEPRA had reduced the power tariff by Rs3.60 per unit at the then-base rate of Rs16.80 after which the farmers were consuming electricity at the base rate of Rs13.

However, after the discontinuation of the facility, agriculture consumers will now pay Rs16.60 in the base rate.

Following the decision, the federal cabinet is expected to collect Rs14 billion by June. It should be noted that the Power Division has written letters in this regard to the K-Electric and other distribution companies.

The division has also informed the Ministry of Finance and the Ministry of Food and Agriculture via letters written in this regard.

The IMF has placed four prior actions including the imposition of a permanent power surcharge of Rs3.39 per unit plus 0.43 paisa (Rs3.82 per unit), market-based exchange rate, hiking discount rate by 150 to 250 basis points and securing confirmation from bilateral partners to meet external financing gap of $7 billion. 

On the power surcharge, the Pakistani side argued that the EFF programme was going to expire in June 2023, so how the IMF could demand slapping a permanent surcharge of Rs3.82 per unit.

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In January 2025, RDA inflows reach 9.564 billion USD.

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Remittances under the Roshan Digital Account (RDA) increased from US $9.342 billion at the end of 2024 to US $9.564 billion by the end of January 2025.

The most recent data issued by the State Bank of Pakistan (SBP) revealed that remittance inflows in January totaled US$222 million, compared to US$203 million in December and US$186 million in November 2024.

Millions of Non-Resident Pakistanis (NRPs), including those who own a Non-Resident Pakistan Origin Card (POC), desire to engage in banking, payment, and investing activities in Pakistan using these accounts, which offer cutting-edge banking options.

Nearly 778,697 accounts were registered under the scheme by the end of January 2025, according to the data.

By the end of January, foreign-born Pakistanis had contributed US $59 million to Roshan Equity Investment, US $479 million to Naya Pakistan Certificates, and US $799 to Naya Pakistan Islamic Certificates.

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FBR lowers Karachi’s built-up structure property valuation rates

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A year-by-year breakdown of the depreciation value of residential and commercial built-up properties is included in the updated property valuation rates for Karachi that the FBR has announced.

The notification said that built-up structural values on residential property will be gradually reduced.

A residential home’s built-up structure, which is five to ten years old, will lose five percent of its worth.

In a similar vein, constructions between the ages of 10 and 15 will lose 7.5% of their value, while those between the ages of 15 and 25 would lose 10%. Built-up structures that are more than 25 years old will be valued similarly to an open plot.

Furthermore, age will also be used to lower the valuation of built-up properties, such as apartments and flats.

Structures that are five to ten years old will depreciate by ten percent, while those that are ten to twenty years old will depreciate by twenty percent. A 30% depreciation will be applied to properties that are 20 to 30 years old, while a 50% reduction will be applied to those that are above 30 years old.

In terms of commercial built-up properties, buildings that are 10 to 15 years old will lose 5% of their value, while those that are 15 to 25 years old will lose 8%. The value of properties that are more than 25 years old will drop by 10%.

In contrast, there would be a 15% boost in the value of commercial properties in the Defence Housing Authority (DHA) that face any Khayaban.

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Remittances Increase 25.2% in January 2025: $3.0 Billion Inflow

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Remittances from Pakistani workers totalled US$3.0 billion in January 2025, representing a 25.2% increase from the previous year.

The cumulative remittances for July through January of FY25 were 20.8 billion dollars, up 31.7 percent from 15.8 billion dollars during the same period in FY24.

In January 2025, the United States of America contributed 298.5 million dollars, the United Kingdom contributed 443.6 million dollars, the United Arab Emirates contributed 621.7 million dollars, and Saudi Arabia contributed 728.3 million dollars.

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