Check burgeoning debt

UNIQUE geo-economic position and vast natural resources should have made Pakistan self-reliant and stand on its feet long ago but it is unfortunate that failing to exploit the true potential, the country’s foreign and domestic debt is touching new heights. According to a report, overall debt has crossed twenty five thousand billion rupees with eleven thousand billion rupees worth of loans taken during the four-year tenure of PML-N.
There is no doubt that the present government took some important initiatives to revive the economy and also achieved the growth rate of over five percent during the last fiscal year but the fact remains that serious economic issues are still to be resolved. Low tax to GDP ratio, ballooning imports and stagnant exports with no worthwhile increase in foreign remittances and the rising circular debt pose serious challenge to the economy. The situation had been far worse if the oil prices had not seen a downward trend during the last four years which once again appear to be on the rise. Financial experts are already painting a doomsday scenario for the coming months when the country will have to pay the debt instalments which are sure to bring down our foreign exchange reserves. The situation is really very serious and the government will have to take some bold decisions to put the economy on the right track. Recently, we saw the government enhancing regulatory duty on the imports of luxury items but more practical steps are required vis-à-vis enhancing our exports and tax to GDP ratio. Unless we bring all the affluent people and potential sectors into the tax net, we will never be able to break the begging bowl. We need to tax more people rather than burdening those already paying the taxes. Then, we have repeatedly been saying in these columns that the country needs to bring value addition in our products instead of relying on exports of only commodities. Besides pursuing austerity measures, there is also need to bring efficiency and ensure good governance in important sectors such as the power to address the issue of circular debt once for all.

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