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Wednesday, February 8, 2023

Finance Minister says Debt-to-GDP ratio might reach 87pc

Dr. Abdul Hafeez Sheikh responded to various questions by lawmakers on the financial situation of the country. He replied with facts of the past and hopes for the future.

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Minister for Finance, Dr. Abdul Hafeez Sheikh informed the National Assembly that the country’s Debt-to-GDP ratio might reach 87 percent by the end of the current fiscal year. He added that the government had done much work to broaden the tax base, decrease expenditures, and restructuring the public sector enterprises.

In a written reply to the inquiry, he wrote that the debt accumulation was much better in 2019-20 was much better than the preceding fiscal year.

He said, “Over the medium-term, the government’s objective is to ensure a gradual reduction in fiscal deficit which would subsequently reduce the country’s reliance on additional debt.”

He said that the public debt is expected to decrease over the course of three years, from 87 percent this fiscal year, to 84 percent in the fiscal year 2021-22, and 81 percent in 2022-23.

Talking about the state-owned enterprises (SOEs) he said that they reported financial losses of Rs. 191 billion in 2016-17, Rs. 287 billion in 2017-18, and Rs143 billion in 2018-19.

He said that among the measures taken to improve the SOEs, the government has taken measures to appoint chief executive officers (CEOs) and reconstitution of their boards particularly, the Pakistan International Airlines (PIA), the Pakistan Railways, and DISCOs.

Replying to an inquiry by a lawmaker he said, “Sectoral reforms are being undertaken especially in the power sector, whereby the losses of the DISCOs have significantly reduced. Restructuring of Pakistan Railways and the PIA is underway. Whereas PSM, another loss-making SOE is under an active privatization program.”

Read More: ‘Pakistanis are becoming poorer under PTI’: An interview with former finance minister Miftah Ismail

Questioning the efficiency and credibility of financial advisers appointed to different divisions of the government, the lawmaker asked about millions of rupees of irregularities in the departments. To this, Dr. Sheikh replied that they are doing good work and there was no failure on the part of the said officers.

Zain Qureshi, the Parliamentary Secretary for Finance Division responded to a question saying that the funds of the respective provinces were transferred on the 17th and were transferred on the last day of every month.

Talking about the NCP vehicles, he said the vehicles seized from the elite people of the country were sold to government and semi-government departments only at nominal prices.

He said that it is impossible to sell those vehicles to any individual entity.

To a question, the House was told that Rs. 179 billion were collected through petroleum development levy in 2017-18, Rs. 206 billion in 2018-19, and Rs. 294 billion in 2019-20 – as per provision of the Public Finance Management (PFM) Act, 2019. Petroleum Levy being part of non-tax revenue is not used to bridges the gap of total-tax revenue.

Furthermore, the Income Tax (Amendment) Ordinance, 2021, and the PAF Air War College Institute Ordinance 2021 were presented before the House.

The government also presented the Mid-Year Budget Review Report for FY 2020-21.

Four reports on respective standing committees were presented on various bills.

These bills include, “The Islamabad Capital Territory Senior Citizens Bill, 2020,” “The Domestic Violence (Prevention and Protection) Bill, 2019,” “The Pakistan Arms (Amendment) Bill, 2020,” and “Covid-19 (Prevention of Hoarding) Bill, 2020.”

Read More: JS Bank and PMRC sign an agreement to promote affordable housing finance

Raising a Point of Order, leader of PPP, Raja Pervez Ashraf said that any attempt to privatize the Pakistan Institute of Medical Sciences (PIMS) would be strongly resisted.

The House will meet again on Tuesday at 11 am.