According to newspaper reports, the volume of domestic and foreign loan has reached Rs 21,550 billion with foreign debts standing at Rs 7,000 billion since the present government took up the reins of the country. According to newspaper reports, the volume of debt reached Rs 14,318 billion in 2013 which has now soured to Rs 21,550 billion. The State Bank has received around $500 million from the IMF, $502 million from the World Bank and $ 307 million from the Asian Development Bank. After reception of heavy loans from the international organizations, the financial managers of the country have proudly announced that the foreign reserves have crossed $23 billion mark. The foreign reserves held by the State Bank are around $18.3 billion and commercial banks stand at $4.9 billion. The volume of the medium and long term foreign loans has reached $48.2 billion.The country owes $12.20 billion to Paris club, $25.20 billion to multilateral organizations, $5.60 billion to IMF and Euro bonds account for $4.10 billion. The government borrowings from the Asian Development Bank has reached $9.83 billion and the International Development Association to $12.95 billion.
The development of modern infrastructure is prerequisite for the development of the economy and getting loan is the easiest way to move on. But the loans are piling up bit by bit and day by day. The previous government of the Pakistan People’s Party took billions of dollars loans to run not only the country’s affairs, but also manage personal finances. The PML-N government has now adopted the same tactics and soon the loan amount will reach a breaking point. The government could have adopted austerity measures but it was not regarded as an option. The public money is being spent on the Presidency and governor houses without any utility. Without going through the details of their performance, at least the prime minister and the chief ministers are doing their jobs, but the president and governors are a burden on the national exchequer. In a situation when disbursement of loan misses its targets, the government has no plan B to handle the situation as it happened in the case of the World Bank loan. Earlier, the World Bank had approved $870 million under livelihood cash grant scheme for the earthquake affectees but it could issue only quarter of the pledged money.
According to the Fiscal Responsibility and Debt Limitation Act, 2005, the volume of loans should not exceed 60 percent of the gross domestic product but the loan has now crossed 65 percent of the GDP. The economy of the country has been made hostage to the foreign loans and the nation had to go a long way to achieve self-reliance.
