Prime Minister Shehbaz Sharif has established a high-powered political committee to oversee the implementation of the National Fiscal Pact, address rising debt concerns, and fast-track critical infrastructure development. The move comes amid pressure from the International Monetary Fund (IMF) and rising tensions between federal and provincial governments over fiscal responsibilities.
The eight-member committee will be co-chaired by Deputy Prime Minister Ishaq Dar and PPP Chairman Bilawal Bhutto Zardari. It includes key federal ministers and the Attorney General for Pakistan. The committee has been instructed to present budget proposals within ten days to both federal and provincial governments to accelerate progress.
Signed in September 2024, the National Fiscal Pact was part of IMF’s $7 billion Extended Fund Facility. However, implementation has been slow, largely due to resistance from provinces like Sindh, which oppose taking on more expenditure burdens. The pact aims to balance responsibilities and harmonise taxation between the center and provinces.
Notably, the committee does not include representation from the opposition-led PTI, which governs Khyber Pakhtunkhwa. This raises concerns about the potential for nationwide consensus, which is essential to meeting IMF benchmarks and ensuring lasting fiscal reforms.
In addition to debt-sharing, the committee will focus on expanding tax reforms, like bringing agricultural income under the Federal Board of Revenue’s system and unifying property tax frameworks. It will also push the rollout of e-procurement through the Pakistan Acquisition and Disposal System (e-PADS) across all provinces.
Furthermore, the committee will handle national water security issues, particularly in light of India’s actions on the Indus Waters Treaty. It will coordinate infrastructure projects to ensure steady water access and support regional stability. The Finance Division will act as the committee’s secretariat, tasked with removing roadblocks and improving coordination between all levels of government.