By Staff Reporter
ISLAMABAD: The government direly needs Rs165.2 billion for servicing foreign loans during the outgoing fiscal year as the rupee has slumped to record low against the dollar.
The Economic Affairs Division (EAD) has moved Economic Coordination Committee (ECC) of the Cabinet to approve a supplementary grant for the aforementioned amount.
However, so far ministry of finance and the EAD have failed to reconcile exact figures for the actual requirements of both supplementary grant (SG) and technical supplementary grant (TSG) for placing the summary before the ECC for approval on increased debt servicing requirements mainly because of the depreciated exchange rate.
The government had made an allocation of Rs3.059 trillion for debt servicing in the outgoing fiscal year 2021-22 including Rs2.057 trillion mark-up on domestic debt and Rs302.506 billion on foreign loans.
The official sources said the EAD had worked out debt servicing requirements at an average exchange rate of Rs160/dollar but the exchange rate fell sharply around Rs200 mark.
However, the EAD worked out an average exchange rate hovering around Rs175 against the dollar and demanded Rs165.2 billion for fulfilling its foreign loans related obligation.
When the official summary was received by the ministry of finance, the top finance wizard on the fiscal front made some interesting observations.
It was written on official files that the EAD sought Rs162.3 billion as SG and Rs2.9 billion as TSG on account of repayment of loans and interest payments on foreign loans.
It is indicated in the summary that the original budget allocation on account of repayments and interest on foreign loans amounted to Rs1,804.5 billion. The revised estimates have been figured at Rs1,969.7 billion, indicating a shortfall of Rs165.2 billion.
The provisional actual amount for the first ten months (July-April) for 2021-22 on this account amounted to Rs1,674 billion. Based on this calculation, the total amount has been worked out at Rs2,008 billion. Further, the amount has been calculated based on the revised exchange rate of Rs175 against the dollar while the recent exchange rate is on the much higher side.
Ministry of Finance assessed that the revised estimates made by EAD would be on the lower side and it might be more than Rs165.2 billion for the requirement of SG and TSG.
In spite of additional allocation, if actual expenditure increases it will result in raising audit objections. The ministry of finance recommended that the summary should be moved in the second half of June 2022 after having actual repayments data for the first 11 months and the exact behaviour of the exchange rate.
Official documents confirmed that Pakistan’s total external debt and liabilities stood at $132.8 billion till February 2022 under the PTI-led regime, while it stood at $96 billion in June 2018 when the PMLN- led government had completed its five-year tenure.
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