ISLAMABAD - The former PPP led coalition government had borrowed huge amount of Rs 8,136 billion from internal and external resources during its five years constitutional tenure to finance its budget deficit.
The government had borrowed Rs 6234.3 billion from domestic loans, Rs. 1256.5 billion from public and publicly guaranteed and Rs 645.3 billion from International Monetary Fund (IMF) in five years making total at Rs 8136 billion. The previous government had failed to achieve the annual revenue collection in a single year, which compelled it to depend on borrowing that broke all previous records.
State Minister for Privatisation Khurram Dastgir Khan on Friday informed the National Assembly that public debt has reached to Rs 14000 billion, which was Rs. 6044 billion in June 30 2008. Since 1st July 2008, the PPP led coalition government had borrowed Rs.8136 billion till June 30 2013 to run its expenditures, he added. He maintained the government is investigating that where the PPPP government had spent this huge amount, whereas worst economical condition of the country is evident that the huge sum was not utilised in improving economy
The break-up of Rs. 8136 billion showed that government borrowed Rs. 1233 billion in financial year 2008-09, Rs. 1363.8 billion in 2009-10, Rs. 1566.5 billion in 2010-11, Rs 1860.5 billion in 2011-12 and Rs 2112.3 billion in fiscal year 2012-13.
The house was informed in a written reply, that the government financed its fiscal deficit through domestic and foreign loans. Fiscal deficit has been on average around 7 percent of GDP in the past five years, which resulted in high level of debt. However, no loans were written off during the said period. Particularly, domestic financing requirements of the government combined with the risk averseness on part of banks have crowded out private sector credit availability. Moreover, increases spending on current expenditures primarily on account of debt servicing and energy related subsidies left less resource allocation towards development expenditures, which resulted in economic slowdown.
The State Minister informed the lower house of the parliament that present government is committed to reduce the financing gap which ultimately would help reduce the dependence on debt in future. The major steps include reduction of fiscal deficit and improving the balance of payments position through revenue expansion and focusing on broadening income tax base, austerity measures through reducing other than obligatory expenditures, reducing un-targeted subsidies, reforming public sector corporations, resolving energy crisis and attracting non-debt creating flows like remittances.
The house was told that cumulative country-wise amount of loan taken by the government during the last two years was $2.570 billion, which was spent on development projects, budgetary support, earthquake, floods rehabilitation and import of urea etc.
Incharge of the Prime Minister’s office has informed the house in written reply that PM office (public) and internal had utilised Rs 3.315 billion in last five years. The PM office utilised Rs. 401.149 million in financial year 2008-09, Rs. 438.785 million in 2009-10, Rs. 502.587 million in 2010-11, Rs. 824.343 million in 2011-12 and Rs. 1.145 billion in fiscal year 2012-13.
The National Assembly was informed that Pakistan had received $55.01 billion remittances in last five years. The break-up of $55.01 billion revealed that country received $7.81 billion in financial year 2008-09, $ 8.9 billion in 2009-10, $11.2 billion in 2010-11, $13.18 billion in 2011-12 and $13.92 billion in fiscal year 2012-13.
Similarly, the Finance Minister has informed the house in written reply that government has collected Rs 1.463 billion by increasing one percent GST during the period from 13 June 2013 to 30 June 2013.
Khurram Dastgir said it was for the first time that the present government cleared the entire stock of circular debt within sixty days after coming into power. In the first phase‚ cash injection of Rs342 billion and in the second phase non-cash adjustment of Rs138 billion was completed. This has led to additional power generation of 1700 MW electricity. He said currently the circular debt stands at Rs70 billion. Talking about the circular debt, the State Minister said it was accumulated due to tariff difference. However, the government has prepared a comprehensive plan to resolve the issue permanently, he said and added that government has initiated a campaign to control the power theft. The minister said that power tariff for commercial and industrial consumers has already been enhanced and it would also be raised for domestic consumers.