However, to qualify for this generous international assistance, Pakistan has pledged to undertake a series of "painful but necessary economic reforms".
During its negotiations with the World Bank and other international institutions, Pakistan pledged to reduce its fiscal deficit from 7.7 per cent of the GDP last year to 4.3 per cent of the GDP this year.
Pakistan agreed to reform its tax policy and tax administration to mobilise additional revenues. The tax-to-GDP ratio is to be reduced to 15 per cent of the GDP over the next five to seven years. Pakistan also promised to tighten its monetary policy as and when needed and to reduce borrowings from the State Bank.
Image: Pakistani women receive rice from the distributing room of the Bari Imam Shrine in Islamabad.| Photograph: Farooq Naeem/AFP/Getty Images
Also read: What is subprime crisis? How it caused financial mayhem?
| Live updates on money.rediff.com |
|
Advertisement
