President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Engr Daroo Khan Achakzai has urged the government to take all appropriate measures for strict implementation and compliance of Pakistan Fiscal Responsibility and Debt Limitation (FRDL) Act 2005.
He also urged for reduction in government expenditures, efficient utilisation of public debt, increase in revenue and improving the debt-carrying capacity of the country to finance growing development needs of Pakistan. Expressing serious concern over the rising public debt of Pakistan, he stated that this is alarming for Pakistan that its public debt has reached to 74.19 percent of GDP (Rs 28.60 trillion by March 2019) which was 57.5 percent of GDP (Rs 6.12 trillion) in 2008 and 63.8 percent of GDP (Rs 14.29 trillion) in 2013.
He indicated that the failure to mobilise domestic resources, increased reliance on borrowing and accumulation of domestic and external debt has created difficult situation for the current government to meet the debt obligations as suggested by FRDL.
The President FPCCI appreciated the initiative of Prime Minister Imran Khan to formulate a high-powered commission for auditing of last 10 years debt. He added that at present, every Pakistani owes Rs 1.5 lac in term of burden of debt.
He stated that the high and rising debt constitute a serious threat to national security and sovereignty of Pakistan and may create impediments in business activities, investment, economic growth, poverty alleviation and employment generation. He further added that the debt needs to be paid and at current levels the interest bill is larger than Pakistan's entire development budget.
Moreover, the continuous depreciation of Pak Rupee also enhances the burden of external debt. The higher debt servicing requires generating of higher revenue through taxes which would ultimately increase the cost of doing business.
He stated that a rising debt burden has implications on the economy as greater amount of resources allocation to be made towards debt servicing in the future which may cost in terms of foregone public investment of the economy.
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