NA informed: Rs15.975trn domestic, $13.42bn foreign debt repaid in 3 years
ISLAMABAD: The government repaid Rs 15975.53 billion domestic debt and $ 13.42 billion (interest $3.36 billion and principal amount $10.06 billion) foreign loans to banks and non-bank organisations in three years.
The government has repaid Rs 13586.92 billion domestic loans to banks and Rs 2388.61 billion to non-bank organisations during last three years.
The government repaid Rs 5086.24 billion from July 2008 to June 2009, Rs 3919.16 billion in 2009-10 and Rs 6970.13 in 2010-11.
About repayment to banks, the government paid Rs 4051.08 billion in July 2008 to June 2009, Rs 3406.2 billion in 2009-10 and Rs 6129.64 billion in 2010-11.
Finance Minister Dr Abdul Hafeez Sheikh informed the National Assembly in a written reply to a question.
The Finance Minister further said the debt servicing of foreign loans/credits and budget estimates during last three years till 2011-12 stood at US $ 13.4187 billion - principal amount US $ 10.062 billion whereas interest US $ 3.356 billion.
Dr Abdul Hafeez Sheikh said that total debt including foreign was Rs 5799.90 billion till March 15, 2008 but it reached Rs 10890.04 billion till September 20, 2011 during last three years.
During last three years, he said the domestic debt reached Rs 6103.62 billion, permanent debt Rs 1155.07 billion, floating debt, Rs 3262.18 billion, un-funded debt Rs 1686.37 billion and foreign debt Rs 4786.42 billion during till September 20, 2011.
He said the repayments of loans are agreed at the time of negotiations and signing of loan agreements with borrowers and hence these loans are being paid as per agreed schedules. He said the appropriate budget provisions are made accordingly.
He said the government has adopted a policy of curtailing its avoidable expenditures. In addition, he said it has recently introduced austerity measures, which, inter alia, include complete ban on new recruitment, purchases of assets, etc, and 20 percent budgetary cut on operative expenses.
He said the government borrowed domestic and foreign debt to fill the gap between income and expenditures. He said external loans were obtained to finance various development projects in different sectors of economy. Foreign loans were also obtained for post disaster reconstruction and budget support, he said.
The minister said the government revenues are less than its expenditures, therefore borrowing of money from both sources would be a continuous phenomenon until revenue surpasses expenditures. He said the present government started its term with inherited backlog of problems - deficits, energy shortages, power sector circular debt, security expenditure, resettlement of IDPs, low growth and entrenched inflation. In addition, he said the country faced multiple adverse shocks of commodity and oil prices and fallout of global financial crises. The situation further worsened after the unprecedented floods, he added.
In reply to another question, the minister said international financial assistance committed as of 14-11-2011 amounted to $ 198.28 million for flood-2011 affected areas.
Of this committed assistance, US $ 86.24 million funds were disbursed in flood-affected areas and $ 103.9 million are in pipeline.
He said US $ 18.32 million through government of Pakistan, $ 75.51 million through NGOs and $ 104.44 million through UN were provided to the flood affected areas.