LAHORE: The Punjab government's liabilities have bulged by Rs 77 billion in the third quarter of the calendar year 2021 mainly due to the depreciation of the Pak rupee, escalating it to Rs1.032 trillion from earlier Rs955 billion.
As per a report released by the Punjab Finance Ministry for the period between July 1 and September 30, the debt stock of September 30 has shown an increase by eight percent from the debt stock of June 30. Although domestic loans showed a decline from Rs 5.192 billion to Rs 4.787 billion, external loans swelled from Rs 949.335 billion to Rs 1.026849 trillion.
Citing the reason for the increase in loans, the report observed that this growth is mainly due to foreign exchange loss of Rs76 billion and the amount of net new debt received during the quarter under review amounts to Rs 1 billion.
The outstanding debt stock (as on September 30) is exclusive of guarantees amount awarded to various projects/entities of the Punjab government; the total amount of guarantees outstanding remains unchanged from June 30, which stood at Rs 48.75 billion.
The report also pointed out that the "wheat debt" of Punjab standing at Rs 540 billion (as on September 30) is not included in the debt stock of Rs 1.032 trillion. Moreover, wheat debt is secured by wheat stock and guarantee of the federal government; the value of wheat stock amounts to Rs 175 billion (as on September 30) against the debt stock of Rs 540 billion.
A major share of government borrowing comes from the International Development Association (IBA) that is 33 percent (Rs 340,240 million) of the total outstanding followed by Asian Development Bank (ABD) 25 percent (Rs 256,657 million), China 23 percent (Rs 239,484 million), International Bank for Reconstruction and Development (IBRD) 14 percent (Rs 145,111 million), Japan International Cooperation Agency (JICA) 3 percent (Rs 27,344 million), International Fund for Agriculture Development (IFAD) 1 percent (Rs 13,870 million), federal government Rs 4,787 million, France 0.4 percent (Rs 4,030 million) and Islamic Development Bank (IDB) 0.01 percent (Rs 113 million).
As per the report, the agriculture and livestock sector remained the major recipient of government borrowing, which amounts to Rs 288,349 million (28 percent of the total outstanding) followed by the transport and communication Rs 243,541 million (24 percent), education Rs 225,852 million (22 percent), urban and community development Rs 120,207 million (12 percent), governance Rs 63,986 million (6 percent), health Rs 48,626 million (5 percent), energy Rs 19,224 million (2 percent), industries and infrastructure Rs 17,237 million (2 percent), tourism Rs 2,763 million (0.3 percent) and environment Rs 1,850 million (0.2 percent).
Copyright Business Recorder, 2021
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