Government to retire over $10 billion foreign loans in FY20

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VIAZulfiqar Ahmad
SOURCEBusiness Recorder
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Minister for Economic Affairs Hammad Azhar on Thursday informed the National Assembly that the government would return over $10 billion foreign loans during the current fiscal year. Replying to questions during the question-hour, Hammad Azhar said the incumbent government returned US $8.39 billion foreign debt from August 18, 2018 to June 30, 2019.

He said that Pakistan Tehreek-e-Insaf (PTI) government obtained US $ 7.1 billion foreign loan during the said period, adding previous government of Pakistan Muslim League-Nawaz (PML-N) had obtained loans on short terms during the last two years of its tenure which had to be returned. Azhar said that the foreign debt on August 18, 2018 was US $ 73.1 billion. He said that debt to GDP ratio had exceeded from the limit during the tenure of past government. However, he said that the incumbent government is making efforts to bring it down to the prescribed limit.

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He said that the government had retired record foreign loans worth of US $ 9.5 billion during the fiscal year which had never been done by any government in a single year. He said the government is focusing to enhance exports and foreign remittances for putting the country on the path of development and prosperity. He said that the government is introducing comprehensive set of economic and structural reforms to resolve the economic issues. He said the government is focusing on exports competitiveness, re-establishing fiscal stability and improving governance in key utilities and state-owned enterprises, adding inflation rate stands at 10.3 percent.

To a question, he said that foreign exchange rate remained constant. He said the government is focusing on agriculture sector and Rs 280 billion have been allocated for the purpose. He said cotton growing area reduced by 28 percent in last ten years which is a matter of grave concern. He said increase in cotton growing area was discussed in Economic Coordination Committee (ECC) meeting and a committee has also been formed in this regard.

Parliamentary Secretary for Textile Aliya Hamza Malik told the House that the government has extended the export enhancement package for another three years with the same previous conditions to encourage non-traditional exports of the country. She said that under this package, new export sectors such as transport equipment, auto parts and accessories; machinery including electrical machinery, furniture, stationary, fruits, vegetables, meat and meat preparation including poultry have been included. She said gas tariffs for LNG have been lowered for Punjab to bring it at par with other provinces whereas there has been no increase in gas prices for export industries including jute, carpet, textile, sports goods, leather and surgical goods.

Taking floor, Minister for Power Omar Ayub Khan said that on the directions of Prime Minister Imran Khan, cost of doing business is being reduced to facilitate investors. The government accrued income of Rs 57,714 million from the Asset Declaration Scheme that was launched to give people an opportunity to declare their undeclared assets by paying a certain amount of tax on them.

“The total income accrued from Asset Declaration Ordinance 2019 is Rs 57,714 million. However, tax payment of Rs 8,081 million under the present scheme will be deposited up to June 30, 2020 along with default surcharge,” the Ministry of Finance informed the National Assembly in a written reply. However, it clarified that the main purpose of the Asset Declaration Ordinance 2019 was documentation of economy.

The ministry also clarified misperceptions about the price hike of basic commodities and informed the House that the government is fully cognizant of its responsibility towards improving the everyday life of the common man. It said that the adjustments in prices of different essential commodities and services have not been made at the behest of the International Monetary Fund (IMF) or any other institution. “The prices reflect market forces and rising international prices in case of certain commodities,” it added.

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It said that the government has taken a number of concrete steps for the uplift of living standards of the under-privileged segments of society, adding Ehsaas Programme has been launched to reduce inequality, invest in people and develop backward areas of the country. Similarly, the government has substantially increased the BISP allocations to Rs 180 billion in current year”s budget as compared to last year”s allocation of Rs 100 billion, it added. Improved coordination between the federal and provincial governments is also ensuring that commitment towards social sector spending at provincial levels is strong, it added.

(This news/article originally appeared in Business Recorder on August 9th, 2019)

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