Pakistan borrowed 84 percent of its total economy, which is around $300 billion, and put Rs 1.2 trillion in the State Bank of Pakistan as reserves to avoid commercial lending, meet the government expenditures and bridge fiscal deficit.
Federal Minister for Planning, Development and Reform Khusro Bakhtyar informed this to the National Assembly Standing Committee on Planning, Development and Reform, which met with Junaid Akbar in the chair at the Parliament House Wednesday.
While briefing the committee about the salient features of 12th Five Years Plan, the minister said that 50 percent of new debt, which is obtained by the PTI government, is being spent on paying interest (Rs 2 trillion) of previous borrowing. He said the PTI government has reduced its expenditures by Rs 45 billion by taking hostile measures.
"The PTI government will try its level best to not move any summary for supplementary grant in this fiscal year to avoid increase in fiscal deficit," the minister added.
Answering questions of the committee members, the minister said the PTI government has obtained Rs 7.8 trillion foreign debt in one year. He said that there is no condition of International Monetary Fund (IMF) to reduce development budget. He said, "We would try to decrease the public debt-to-GDP ratio in next four years and would bring it down to 67 percent."
Khusro Bakhtyar said that the PTI government is trying to move the country towards substitutable growth by reducing the fiscal deficit, increasing exports, improving balance of payment, increasing agriculture growth and improving domestic productivity of small and medium enterprises (SMEs). "We want to improve small businesses by providing loans on soft conditions," he said.
He said that negative growth of Large Scale Manufacturing Industries is continued and growth is very necessary. "We can not finance these industries by obtaining loans. We will try to improve it through public sector spending," he said.
The minister said that there is 15 percent investment of the GDP, including 9 percent private and 6 percent of government. He said, "Our economy is very slow as compared with other countries of this region. We are bringing restructure reforms to get sustainable growth."
He said, "We are bringing digital system of FBR by spending $400 million for fillers without any interference of the organization."
The minister said that the government would increase 11 percent to 15 percent tax collection to GDP ratio in the next four years.
He said that the PTI government is giving importance to industrial cooperation under China-Pakistan Economic Corridor (CPEC) and wants to increase productivity of steel. "In this regard, we will encourage and facilitate the private sector. We will try to increase the investment of private sector from 9 percent to 18 percent in next years," he added.
The minister said, "There are reserves worth billion of dollars of copper and gold in Balochistan. We can pay debt only by using two to four mines of copper and gold in Reko Diq of Balochistan."
Answering a question, the minister said, "In the past, we artificially maintained the value of rupee against dollar to control inflation. Now inflation has increased when we removed artificial control of dollar in open market."
The committee also discussed the compliance report regarding the recommendations of the previous meeting and showed dissatisfaction over the reply of Ministry for Planning, Development and Reform regarding Mansehra airport.
The committee constituted a sub-committee to examine the Mansehra Airport project, under the convener-ship of Saleh Muhammad along with two committee members. The ministry submitted comprehensive analysis on last three 5-Year Plans.
The representatives from the governments of Sindh and Khyber Pakhtunkhwa placed issues relating to devolved matters before the committee.
The committee recommended that the pending issues relating to devolved ministries may be resolved at the earliest by the Ministry of Inter-Provincial Coordination with consultation of Cabinet Division.
The director general (works) CDA briefed the committee about construction of additional family suites for the members of Parliament. The committee appreciated the KPK government for inclusion of Marble City Buner project in the Provincial Development Program 2019-20 on the recommendation of National Assembly standing committee.
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