In March, the government and International Monetary Fund (IMF) are due to hold first review of the Extended Fund Facility (EFF) programme, which was negotiated in September 2024.

There are overall programme objectives which, unlike a Standby Arrangement (SBA), cover not only macroeconomic stability but also economic growth. Within this over-arching policy endeavour, the programme seeks reaching/carrying out mainly ‘policy credibility’, ‘[macroeconomic] stability’, ‘structural reforms’, ‘public services’, ‘private-led growth’, ‘fiscal consolidation’ (or in other words, practice of austerity policies), ‘institutional reforms to strengthen the fiscal framework, including the federal-provincial fiscal relations, ‘[using] monetary policy to bring down inflation and exchange rate flexibility’, ‘energy tariff adjustments’, deregulation of product markets’, ‘removal of subsidies’, relaxation of trade barriers, and ‘strengthen climate resilience’.

From the objectives, it is quite clear that neoliberal policy forms the philosophical underpinnings of the programme, given under ‘market fundamentalism’, there is call for product market deregulation, little role of government both in terms of call for deregulation, and also growth to be led by private sector; and, under liberalization objective, not only deregulation is being prescribed, but also subsidies are being asked to be removed, and trade barriers to be relaxed. More is this regard in some subsequent paragraphs.

In addition, to bring greater detail to these programme objectives, the programme carries, (i) ‘performance criteria’, and in terms of being ‘quantitative’, and ‘continuous’, and provides for certain ‘indicative targets’ in this regard, and (ii) ‘structural conditionality’, where some of it was ‘prior actions for program approval’, all three of which were met, while others are ’structural benchmarks on the ‘fiscal’, ‘governance’, ‘social’, ‘monetary and financial’, ‘energy sector’, ‘state-owned enterprises’, and ‘investment policy’.

Starting with quantitative performance criteria, for instance, one sees that end-March ceiling for general government primary budget deficit is set at Rs. -2,707 billion, which means the programme calls for government to run a primary surplus of........

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