Waheed Mahmood
ISLAMABAD: Government’s expenses consistently on the rise and if the trend goes on it will only lead to wider budget deficit. This was expressed by Governor State Bank, Shahid Hafeez Kardar while briefing Senate’s Standing Committee on Finance here Tuesday. Senate Standing Committee meeting was chaired by Senator Ahmed Ali.
Governor State Bank of Pakistan told the committee if government expenditures remain on the higher side, then fiscal deficit may reach to 6 per cent of the gross domestic product. Governor SBP informed that during the current fiscal revenues were increased by 7 per cent whereas government expenses rose by 9 per cent.
Kardar added that government has borrowed Rs374 billion for its expenses from the central bank, whereas for the purchase of commodities Rs366 billion more had been borrowed while Rs368 billion extra also loaned for public sector entities. Governor central bank said that government still paying monthly Rs20 billion subsidy on power while Rs29 billion annual subsidy being paid on urea. On the occasion Federal Secretary Finance told the Committee that subsidies on power sector and security-related expensed are the biggest ingredients to the rising inflation, added that circular debt in the power sector has reached to Rs145 billion so far.
Kardar added that government has borrowed Rs374 billion for its expenses from the central bank, whereas for the purchase of commodities Rs366 billion more had been borrowed while Rs368 billion extra also loaned for public sector entities. Governor central bank said that government still paying monthly Rs20 billion subsidy on power while Rs29 billion annual subsidy being paid on urea. On the occasion Federal Secretary Finance told the Committee that subsidies on power sector and security-related expensed are the biggest ingredients to the rising inflation, added that circular debt in the power sector has reached to Rs145 billion so far.
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