IMF Blocks Dam Cess in FY26 Finance Bill

Islamabad, June 26, 2025 — The government has failed to include the proposed dam cess in the FY26 finance bill, blocked by International Monetary Fund (IMF) disapproval, The News reports, despite ongoing discussions with Pakistani authorities. Initiated by the Federal Board of Revenue (FBR), the cess—absent from the current FY25 bill under National Assembly review—aimed to fund hydropower projects like Diamer-Bhasha, Mohmand, and Dasu to counter India’s water manipulation under the Indus Waters Treaty, disrupting Punjab’s crop sowing.

The IMF questions the cess’s urgency, but officials argue India’s water storage in Jhelum and Chenab rivers—exacerbated in winter low flows—threatens winter crops and food security, with the Sindh Irrigation Department reporting 90% irrigation cuts, crippling cultivable land. The government presses for swift dam completion to boost water storage, eyeing legislation or a presidential ordinance if IMF approval comes. The Ministry of Water Resources proposes a fund from provincial NFC shares for consistent financing, though collection methods remain undecided.

Web context highlights Pakistan’s water crisis (e.g., 30% deficit, web ID: 0), while posts found on X show anger—some demand action, others blame IMF reliance. Critically, the narrative of “strategic necessity” may mask fiscal constraints—web data points to debt limits, and X sentiment suggests distrust in IMF influence, hinting at policy paralysis.