Overall debt stands at 59.1pc of GDP; Senate told

ISLAMABAD: The Senate was informed Wednesday that overall debt to GDP ratio in the country presently stands at 59.1% and the government will approach the parliament if it will be going to exceed the benchmark of 60%.

Minister of State for Interior, Baleeghur Rehman told the House during Question Hour on behalf of the Finance Minister that internal and external debt had decreased over the period and the figure given in the House was of February and correct.

Answering supplementary questions, he said, the internal debt stands at Rs 10.906 trillion and external debt stands at US$ 47.7 billion that shows downward trend as compared to figures of previous year.

He explained that in June 2013, the external debt was US$ 48.7 billion but as per the figures of February this year the external debt is US$ 47.7 billion.

About the previous debt to GDP ratio, Baleeghur Rehman said, under the law the borrowing cannot exceed 60% of GDP.

However, this figure stood at 63% of GDP in 2012, and 62.7% in 2013 while at present it is 59.1%.

“If the government will feel that the figure is going up, it will approach the Parliament for approval.”

Answering another question, he said, the debt had increased by Rs 474.28 billion due to declining exchange rate of rupee against dollar.

But, with the appreciation of the value of rupee, the extra debt burden has come down.

About rupee to dollar exchange rate, the minister said, it depends on the volume of reserves.

Since, the government has improved fiscal management the exchange rate has also improved.

“The position of inflows and investment has also improved and the IMF tranche were also released in time. We expect the same trend in coming days,” he said and assured that the government will try to attain maximum possible price in 3G and 4G licenses award through an open auction.

Answering a question, Minister for Planning and Development, Chaudhry Ahsan Iqbal told the House that CWDP at its meeting on October 28, 2013 had approved five projects and recommended two projects for approval to ECNEC due to higher cost falling in the jurisprudence of the ECNEC.

He said one project was approved in principle subject to cost rationalization by a committee while concepts of two projects were cleared for arranging assistance from donors.

He said the CDWP has been empowered to approve development projects costing up to Rs 1000 million and the project costing above this limit are recommended by the CDWP for approval of the ECNEC.

The House was also informed that total amount or value of T Bill auctioned since November, 2013 to January 08, 2014 was Rs 1607 billion. Out of which an amount of Rs 1424 billion was used to pay previous borrowing from the banks and a net amount of Rs. 183 billion was used for budgetary support.

About amount of domestic debt raised by the government, he said, the present government has so far raised Rs 312 billion from State Bank and Rs 429 billion from Commercial Banks taking the tally to Rs 741 billion.

The minister said, to address difficult situation of depreciation of PKR, the government is trying to realize official inflows from different sources like CSF, 3G license, fee receipts of euro bonds and inflows from multilateral and bilateral institutions.

He said the government has also chalked out a reform agenda to address structural weaknesses and tight monetary policy stance by State Bank of Pakistan is expected to keep a check on the domestic aggregate demand and external current account deficit.