Senator Mohsin Aziz stated that BD taka was much stronger than Pakistani rupee and not only their remittances have increased but exports also reached $40 billion. While on the other hand, Pakistan exports have fallen to $20 billion from $25 billion. In such a situation the government was heavily borrowing from foreign and domestic sources with no strategy for repayment of huge loans.
The chairman of the committee stated that the economic managers continue to take more loans from local and foreign sources and wondered whether they have any strategy for loans repayment. The finance secretary stated that tax collections by the FBR and workers' remittances are main revenue sources of Pakistan, however, senators stated that there was a decline in remittances in the last fiscal year and it is being feared that it will continue in the current fiscal year.
They also blamed the government's foreign policy responsible for decline in remittances and remarked that Pakistani rulers have always favoured in one way or the other to their Arab friends but they prefer other regional countries' workers to Pakistan which was main reason for decline in remittances. However the finance secretary claimed that the remittances have declined in the entire region from Middle East because of low oil prices and from UK due to Brexit, but the senators did not agree to him and suggested to look at the figures of Bangladesh.
On the agenda item of Pakistan debt position in the country up to May 2017, it was informed that Pakistan foreign debt stands at $58 billion and domestic debt at Rs 12.956 trillion. Senior officials of Finance Ministry also claimed that Pakistan's external debt increased only $3.8 billion from $57 billion in the previous fiscal year till May. Senator Mohsin Aziz said that total debt has increased by around 20 percent in one year and he pointed out if $ 3.8 billion of last fiscal year were included that debt is $60.8 billion and not $58 billion as claimed by the Finance Ministry.
The committee was also interested in knowing about rate of interest of various loans, especially of those procured from China but the government requested for an in-camera briefing because rate of interest was a confidential matter. The Finance Division representatives stated that foreign loans volume reduced because many loans were in other currencies than US dollar and their value against dollar decreased. Senator Mohsin Leghari stated that the FBR was not only holding withholding sale tax returns and was also seeking advance tax to achieve its targets, and depending on FBR collection for repayment of loans was not a sensible thing.
Copyright Business Recorder, 2017