Islamabad: As the country’s external and domestic debt keeps on increasing, a Senate Panel hearing on Wednesday voiced its shock and concerns over this.
The Senate Standing Committee on Finance sought answers from the finance ministry in regard to the reasons for seeking foreign loans. The focal point of discussion during this hearing was the country’s ballooning debt which by May 2017 was recorded at Rs12.95t for domestic and Rs58b for foreign loans.
Senate Standing Committee Chairman, Senator Saleem Mandviwalla expressed his shock at the figures shared and queried as to why the government was accumulating so much local and foreign debt. He queried whether any strategy had been formulated a strategy for the payment of this local and foreign debt that had been accumulated by the govt.
According to Secretary Finance, Shahid Mahmood the bulk of the cash inflows was coming from foreign workers remittances and tax revenue collections by the Federal Board of Revenue (FBR). He added that remittances from the UK had lessened due to Brexit and from the Middle East because of low oil prices.
The committee demanded information about the loans obtained by the government from China, the Secretary Finance said it was confidential and requested an in-camera briefing in this regard. Finance Ministry informed the committee that Pakistan had obtained external loans worth $7.43b in first eleven months of FY 2016-17, out of which $3.6b was paid off to retire previous loans. $3.8b was added to the total public debtor stock of the country.
Senator Mohsin Aziz commented the total debt had registered an increase of around 19-20pc within a span of one year and Senator Ilyas Bilour of ANP blamed the governments distorted foreign policy for the drop in remittances.
Finance ministry was instructed by the panel to furnish and prepare documents to highlight the options available for repaying this mounting debt. As a result of increased government borrowing from commercial banks, the committee observed that they weren’t inclined to provide credit to the private sector.
