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LAHORE: The Punjab government’s debt stock, local and external, bulged from Rs 1079 billion to Rs 1094 billion, an increase of 1.3 percent (Rs 14.3 billion) for the three-month period ended on March 31 this year.

As per a report released by the Punjab Finance Ministry for the period between January 1 and March 31, the domestic loans showed a decline from Rs 4.787 billion to Rs 3.975 billion, a reduction of 9.3 percent, whereas the external loans swelled from Rs 1.074799 trillion to Rs 1.093473 trillion with increase of 1.4 percent.

In the report, it was noted that 99.6 percent of the total outstanding debt stock is denominated in foreign currency and thus the Punjab government’s debt is highly exposed to the fluctuation in foreign exchange. Hence, the government had to bear billions of rupees extra liability (after using the forex rates of March 31) on the account of the rupee’s depreciation. The report pointed out that the above given debt stock is exclusive of wheat debt amounting to Rs 455 billion (as on March 31) against the coverage of wheat stock amounting to Rs 73 billion.

A major share of government borrowing comes from the International Development Association (IDA) that is 33 percent (Rs 363,150 million) of the total outstanding followed by Asian Development Bank (ADB) 24 percent (Rs 264,81 million), China 24 percent (Rs 258,093 million), International Bank for Reconstruction and Development (IBRD) 14 percent (Rs 157,482 million), Japan International Cooperation Agency (JICA) 2 percent (Rs 25,982 million), International Fund for Agriculture Development (IFAD) 2 percent (Rs 16,442 million), federal government 0.4 percent (Rs 3,975 million), France 0.4 percent (Rs 3,972 million) and Islamic Development Bank (IDB) 0.01 percent (Rs 94 million).

As per the report, the agriculture and livestock sector remained the major recipient of government borrowing, which amounts to Rs 292,991 million (27 percent of the total outstanding) followed by the transport and communication Rs 266,049 million (24 percent), education Rs 239,015 million (22 percent), urban and community development Rs 132,248 million (12 percent), governance Rs 68,554 million (6 percent), health Rs 49,999 million (5 percent), energy Rs 20,948 million (2 percent), industries and infrastructure Rs 17,958 million (2 percent), tourism Rs 3,797 million (0.3 percent) and environment Rs 1,914 million (0.2 percent).

Copyright Business Recorder, 2022

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