ISLAMABAD, Pakistan: Finance Minister Muhammad Ishaq Dar on Friday informed the Senate that total external and internal debt and liabilities of the country stood at US$ 65 billion by the end of August 2015.
He was responding to an adjournment motion moved by Senator Sherry Rehman regarding accumulation of total debt over Rs3.81 trillion which, subject to approval of the latest tranche by the IMF Board, will increase to $68 billion by the end of the current fiscal year and Pakistan will need more money this year for service of the external debt.
The Minister said some sections are creating negative picture of debt but the government has managed to make public debt more sustainable as compared to 2013 when we took the charge.
He said fiscal deficit has been cut down from 8.8 percent to 4.3 percent and it will be further reduced.
He said the government after coming into power immediately abolished secret service funds of 32 institutions and cut down Rs135 billion expenditure.
He said present growth rate of the country is three to four percent, which is acceptable for a developing country.
The Minister said the government has a roadmap for financial discipline and to reduce debt, adding that IMF condition to increase sales tax to 18 percent was not accepted in larger interest of common man.
He said Rs45 billion were spent on this operation last year, adding that Rs100 billion have been allocated for it for current year while Rs 45 billion will be allocated in next fiscal year.
The Minister said that 67,000 families of IDPs have so far returned to their homes.
About Eurobond, Dar said, 90 renowned funds have taken this bond and there is full transparency in the process.
He said the Eurobond has great significance for Pakistan, as it not only introduced the international capital market after seven years but also allowed access to cheaper foreign resources for building country’s reserves, which have paved the way for exchange rate stability and appreciation.
Earlier, mover of the adjournment motion, Sherry Rehman questioned that why LNG formula has not been finalized and the Eurobond will further multiply debt.
PPP’s Taj Haider said the government should find a permanent solution to fiscal deficit. He said tax to GDP ratio should be increased and country’s production should be raised.
PTI’s Shibli Faraz called for structural reforms to steer the country out of financial problems.
Noman Wazir was of the view that instead of putting more burden on the already tax payers the government should go for a direct taxation system and documented economy.