Pakistan

Government borrowed more than $10b for institutional reforms

Government borrowed reforms

In the questioning session of the Senate meeting, took place under the Chairmanship of Sadiq Sanjrani, the details of loans borrowed from international financial institutions for the government reforms agenda during the last two years were presented.

The Ministry of Finance submitted the written answers that during the last two years, government institutions bore the loss of more than Rs 10 trillion and 14 billion.

Read more: Bureaucratic Reforms: PM Khan approves additional 88 posts in Secretariat Group

In the financial year 2017-18, the amount of loss was Rs 5 trillion, 63 billion, and 28 Crore. In the financial year, 2018-19, the amount of loss was Rs 4 trillion, 50 billion, and 84 Crore. During the last years, there was a 20% reduction in total loss.

The Ministry of Finance presented the details of the government institutions which are being privatized. The number of institutions, going to be privatized is 19 out of which the process of privatization of 14 institutions is in progress.

These institutions include Balloki Power Plant, Haveli Bahadur Shah Plant, SME Bank, First Women Bank, Service International Hotel, Estate Life Insurance Corporation, Steel Mills, Heavy Electrical Complex, Jinnah Convention Center.

Apert from Government borrowed reforms The details of financial loss due to the pandemic were also presented before the session. It was intimated that GDP has come down from 2.4% to 0.4%, The budget deficit also increased to 1% and the deficit was 8.1% instead of 7.5%. The targets of exports were also badly affected and the total tax revenues had a loss of Rs 809 billion.

Regarding the details of loans, the government took from the international financial institutions, the ministry of finance told the Senate that $10 billion have been taken. From the World Bank, $4 billion, 11 Crores and 10 lac, from Asian Development Bank $3 Billion, 66 Crore, from Islamic Development Bank $1 Billion and 68 Crore and from Asian Infrastructure Investment Development Bank $80 Crore were taken as loan.

Ministry of Finance further told that on the loans, taken from IMF, the rate of interest is 4.05%. The process of debt servicing of the IMF will start in 2024 and will continue up to 2032. The present government signed 21 agreements with World Bank and 22 agreements with Asian Development Bank. For the reforms in the government institutions, the government signed 58 agreements.

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