KP sees surge in borrowing, exceeding Rs530bn in 1H FY2023-24

PESHAWAR: In the first six months of the current fiscal year 2023-24, Khyber Pakhtunkhwa government has witnessed an alarming increase in borrowings, taking the total amount of loans to Rs 530.72 billion.

According to documents from the Finance Department of Khyber Pakhtunkhwa, as of December 2022, the provincial government's total outstanding debt stood at Rs 454.35 billion.

January 2023 marked a turning point as the provincial government's debt escalated, reaching Rs 530.72 billion. This increase of Rs 76.36 billion is attributed to a decline in the value of the rupee against the US dollar.

The provincial government has emphasized the need for these funds to address rising costs and implement essential projects. However, critics argued that the government is neglecting citizen concerns amid the economic challenges and insufficient alternatives to borrowing.

Over the past six years, the province has witnessed a cumulative increase of Rs 370 billion in its overall debt.

In 2017-18, the provincial debt was Rs 160.70 billion, escalating to Rs 227.89 billion in 2018-19, Rs 265.36 billion in 2019-20, and Rs 295.96 billion in 2020-21.

A sudden spike in the value of the dollar resulted in an increase to Rs 359.33 billion in 2021-22. The debt surged to Rs 530.72 billion in the fiscal year 2022-23, reflecting a Rs 171.39 billion borrowing during this period.

During the previous fiscal year, the provincial government made repayments totaling Rs 27.64 billion, including the return of Rs 20.97 billion in loans and Rs 6.66 billion in interest payments.

The government has borrowed for 110 projects, completing 79 of them, while work on the remaining 31 projects is underway.