Sir: Every government postulates that the economy will get rid of loans but seems unable to do so but in the meantime, a few days ago the nation was congratulated by Finance Minister Muhammad Ishaq Dar that foreign reserves have increased more than US$ 23 billion. While the situation seems to be totally different from the reality, like Pakistani exports are becoming less that almost half of imports and due to the deteriorating economic situation in the Gulf States of remittances from overseas Pakistani which have become the big cause of the increase in foreign exchange, the situation is deteriorating. Foreign investment was almost US$ 1 billion last year. The curiosity is that how did the foreign exchange reserves increase? It was then revealed that more than US$ 23 billion of foreign exchange inflows, the foreign currency accounts of civilians are also included too. While the remaining parts consist of contributions received from loans. In 2012, the domestic debt of the federal government was recorded at Rs. 7,674 billion which was increased to Rs. 9,494 billion in 2013 and also included the amount of Rs. 400 billion which is for the payment of circular debt. By the end of fiscal year 2016, the domestic loan has reached to Rs. 12,970 billion with the increase of 69 percent. Similarly the external debt was recorded at US $ 1.55 billion in 2016 as compared to the US$ 4.46 in 2012. (According To Pakistan Economic Survey 2015-16) but according to the website of State Bank of Pakistan external debt was recorded at US$ 35.61 billion (A 32 percent increase compared to 2012). This increase includes the amount of US$ 64 billion of the government’s Euro bonds and Sukook bonds. Remember these were purchased almost two times higher from the bonds market rate. The public debt for the government of PML-N has crossed more than US$ 5,476 billion which is 68 percent of GDP in 2015-16.The government of Pakistan has made its own law that loans of more than 60 percent of GDP are not allowed. In this way, the government is violating its own law. Pakistan is having a strong defense force in terms of its nuclear capability and a strong army, but unfortunately the economic conditions are very weak. The budget deficit is not reducing and to meet the budget deficit, more loans are taken. Due to the continued decline in exports, the trade deficit is continuously increasing. In order to meet this deficit, more loans are taken. In the near future the installment of debt of IMF and Paris club have to be paid which are more than US$ 5 billion that is why the government has launched a series of Sukook bonds to sell it in the international market. The budget deficit was 6.4 percent of GDP last year (while the target was of 3.4 percent). The target of budget deficit in the current fiscal year is 5.3 percent. According to exports, it will be up to five percent of GDP. The government has embarked on the policy of loans to borrow more loans for previous debt. The government is reluctant to fundamental tax reform on the basis of political considerations. By stopping refund in the export manufacturers, the increase in the tax revenue is displayed reduced business costs and reduced energy costs. The economy is sinking and needs better policies on part of the authorities concerned. UMM-E-KULSOOM NASIR Karachi