Debt-to-GDP ratio may soar to 87pc by end-FY21

ISLAMABAD: Finance Minister Dr Abdul Hafeez Shaikh Monday informed the National Assembly that the debt-to-GDP ratio was expected to be 87 percent by end-fiscal year 2020-21, saying enough had been done to rationalise expenditures, broadening of tax base, and restructuring of the public sector enterprises.

In a written reply, he said that the robust policy adopted by the government had resulted in a much lower debt accumulation during FY 2019-20 compared to 2018-19.

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

He expressed optimism that the public debt was expected to reduce to around 81 percent over next three years as it was expected that the debt-to-GDP would be 87pc in 2020-21, 84pc in 2021-22, and 81pc in 2022-23.

In a written statement, Dr Shaikh said that financial losses by the SOEs recorded in 2016-17 were Rs191 billion, Rs287 billion in 2017-18, and Rs143 billion in 2018-19.

He said that the government was taking timely steps to improve the performance of SOEs to curtail their losses in and improve their revenues.

The appointments of chief executives officers (CEOs) and reconstitution of their boards particularly, the Pakistan International Airlines (PIA), the Pakistan Railways, and DISCOs are some of the measures the government is taking to improve their performance of SOEs.

“Sectoral reforms are being undertaken especially in 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 active privatisation programme,” he said, in a written reply to a question asked by a lawmaker.

To a question about the failure of financial adviser designated to each division and chief finance and accounts officer, resulting in numerous administrative and financial irregularities of millions of rupees in each division on an annual basis, Dr Shaikh, who is wandering from “pillar to post” to become a senator, categorically said that they all are doing a remarkable job and overall there was no failure on the part of the said officers regarding disposal of their assigned tasks.

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

He said that the debt-to-GDP ratio was expected to be 87 percent by the end of current fiscal year, and the government was vigorously working to bring down that ratio to around 81 percent in the next three years.

Responding to a question about non-custom paid vehicles used by the so-called elites of the country, he said that the vehicles seized by the customs, having tempered chassis are sold to government and semi-government departments only on nominal prices.

He said those vehicles in no case could be sold to any person in individual capacity.

To a question, the House was told that Rs179 billion were collected through petroleum development levy in 2017-18, Rs206 billion in 2018-19, and Rs294 billion in 2019-20 – as per provision of the PFM Act, 2019. Petroleum Levy being part of non-tax revenue is not used to bridges the gap of total-tax revenue.

The National Assembly adopted the resolution to extend the Federal Medical Teaching Institute Ordinance, 2020, for a further period of 120 days with effect from 13th of this month.

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

The Mid-Year Budget Review Report FY 2020-21 was also present in the National Assembly.

Four reports of the concerned standing committees of the National Assembly on various bills were presented in the House.

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.”

Speaking on a point of order, Raja Pervez Ashraf of the PPP said that any attempt to privatise the Pakistan Institute of Medical Sciences (PIMS) where people from both the Khyber-Pakhtunkhwa and the Punjab are getting free medical treatment, would be strongly resisted.

The House would meet again on Tuesday at 11am.—ZULFIQAR AHMAD & SARDAR SIKANDER SHAHEEN