Daily Times

Minister for Economic Affairs Hammad Azahr on Friday informed the Senate that record $10 billion foreign debt was retrieved during the last year.

Replying to various supplementary questions during the question hour, the minister said the incumbent government assumed the power at a very critical time, adding that foreign reserve was depleting by $500 million on daily basis. The government had to take difficult decisions to rescue the economy, he added.

He said now the economy has been put on right track and foreign reserve is increasing. He said the government has taken various measures to curtail the fiscal deficit at an appropriate level. He said all cases of supplementary grants/technical supplementary grants were approved by the cabinet, imposing a complete ban on purchase of all types of vehicles except operational vehicles for law enforcing agencies, and creation of new posts. The delegations for foreign visits were also restricted while revenue collection and expenditure were being monitored on a monthly basis, he added.

To another question, the minister said the government borrowed more than Rs 35 billion during the first nine months. The present government’s strategy is to lower the debt-to-GDP ratio over the next few years through a combination of higher economic growth, lower fiscal deficit, improving efficiency and productivity of the economy through privatization and greater social spending and promoting greater domestic savings and investments, he said.

He apprised the Senate that public debt stood at 77.8 per cent of gross domestic product (GDP) till Sept 2019. He said the Fiscal Responsibility and Debt Limitation Act, 2015, also outlined the debt reduction path aiming to bring down public debt to GDP to 50 percent in 15 years by 2032/33.

He said the public debt ratio to GDP exceeded its limitation during the last 10 years and it stood at 63.8 per cent in 2013 which had grown to 72.3 per cent till 2018.

To another question, the minister said that the non-performing loans (NPLs) of banks stood at Rs 679,744 million. An amount of Rs 77,361 million NPLs was recovered during 2018, he added. He said State Bank of Pakistan (SBP) published the consolidated data of non-performing loans in Statistical Bulletin on monthly basis and it did not maintain individual defaulters’ database. He said banks were independent to formulate write-off, restructuring and recovery policies duly approved by their board of directors and initiate recovery efforts through legal recourse and other laid down procedures. The SBP monitored the health of financial institutions through off-site surveillance and on-site monitoring of banks in line with defined regulations/policies/procedures /guidelines issued from time to time, he said. He said the banks and financial institutions could recover loans from defaulter under financial institution (Recovery of Finances Ordinance, 2001 (FIRO), the Corporate Restructuring Companies Act, 2016, and the Corporate Rehabilitation Act, 2018.