THE Federal Cabinet, which met in Islamabad on Tuesday with Prime Minister Imran Khan in the chair, did well by
devoting considerable time to discussion on the issue of rising debt burden, which has become a source of serious concern for every patriotic Pakistani. The Ministry of Finance conceded in a briefing to the meeting that the debt burden remains a major challenge as the total debt and liabilities had surged by Rs14.4 trillion in the last two years, up from Rs 29.9 trillion in June 2018 to a whopping Rs44.3 trillion by the end of financial year (FY) 2020.
Effective debt management was one of the major commitments of the present Government before coming into power but regrettably the goal remains a far off cry even after two years. Therefore, as emphasized by Advisor on Finance Dr. Abdul Hafeez Sheikh, careful management across the government and the lenders is need of the hour, as the way the debt is going up it would create serious challenges to the country. We have been pointing out in these columns repeatedly that devaluation of rupee is serving no objective other than increasing the debt burden and this point of view has been substantiated by the Ministry when it told the Cabinet that out of the debt burden of Rs7.7 trillion during the fiscal year 2018-19, Rs 3.1 trillion were contributed by the exchange rate depreciation. The debt increased significantly but exports, which are cited as the sole reason for devaluation, did not go up as expected, mainly because we have no surplus to export due to slow economic activities. The objective of devaluation was to make our products competitive but the goal was compromised due to several upward revisions in electricity and gas tariff as well as prices of the POL products. The dream of getting rid of loans would remain elusive until and unless we increase our exports meaningfully but this is not possible without ensuring ease of doing business, cutting the cost of production, producing quality products and adopting robust marketing strategy. Similarly, despite slogans raised by successive governments, we have not done much to attract the required level of investment and have demonstrated a sluggish attitude even to materialize Chinese willingness to invest under the framework of China-Pakistan Economic Corridor (CPEC). Increase in revenue collection would, no doubt, help us lower our dependence on foreign loans but this again requires strong political will to make all those pay their due taxes who have been benefiting from the system but are not willing to contribute their share to national exchequer.
