According to PTI, cash-strapped Pakistan has announced the axing of 15,000 government jobs and six ministries under the terms of the latest bailout package.

Pakistan received a $7 billion bailout package from the International Monetary Fund (IMF) last week. This is the 24th such bailout – the most for any country.

After the latest Pakistan-IMF deal, Prime Minister Shehbaz Sharif said it would be the last bailout in Pakistan’s history and the nation would now be on the path to development – a promise he had made since the previous bailout in 2023. What happened after but then came back after months. Later to the lender with the begging bowl.

Apart from scrapping six ministries, the Shahbaz government also announced the merger of two other ministries, according to PTI.

Pakistan’s Finance Minister Muhammad Aurangzeb said that now Pakistan will move towards formalizing the economy, which will be important for the country to join the group of 20 most developed economies of the world, G-20.

Although Shahbaz’s government has hailed the bailout as a turning point in the country’s history, the terms of the bailout deal are harsh and bound to be unpopular across Pakistan as they include tax hikes, subsidy cuts, And there is a reduction in government jobs. .

More taxes, higher interest debt, no subsidies – the terms of the IMF bailout deal

IMF has once again come to Pakistan’s aid but with many conditions.

According to The Express Tribune, even before the IMF approved the bailout, it asked Pakistan to secure $2 billion in funds to qualify for the bailout.

Pakistan raised the required $2 billion loan from Standard Chartered Bank at 11 percent interest.

After the funds were secured, the IMF approved 47 billion over the next 37 months and authorized the immediate release of the first tranche of the bailout of about $1.1 billion. There will be 5% interest on it.

The newspaper reported that the IMF bailout deal comes with several conditions, including the restructuring of external and domestic debt that consumes 81 percent of Pakistan’s tax revenues. It aims to affect macroeconomic stability by stabilizing public finances, rebuilding foreign exchange reserves, improving the business environment, and restructuring the country’s taxes and fiscal obligations.

As a result, Pakistan is increasing income tax from 12-15 percent to 45 percent, according to the newspaper.

The terms of the bailout will also end provincial subsidies on electricity and gas. It will also stop the establishment of Special Economic Zones (SEZs) till 2035 and stop tax incentives to existing SEZs.

Under the terms of the IMF Pakistan Agreement, Pakistan is required to maintain a budget with a surplus of 4.2 percent of gross domestic product (GDP) for the three-year bailout period, with the federal government having to come up with a sum. The budget will result in increased taxes on imports, contractors, professionals and fertilizers.