Pakistan's total outstanding domestic debt during FY06 rose to Rs 2.296 trillion, from Rs 2.133 trillion on June 30, 2005, depicting an increase of Rs 163.79 billion (7.67 percent), the State Bank report said on Tuesday.
The increase in the domestic debt during 2005-06 was mostly from rise in the stocks of floating and unfunded debt, while permanent debt declined rapidly during the period under review, State Bank of Pakistan (SBP) provisional data showed. The floating debt increased by Rs 162.07 billion and unfunded debt by Rs 2.44 billion, while permanent debt declined by Rs 725 million.
The permanent domestic debt, comprising medium- and long-term market loans, federal government loans, special government loans, federal instruments and prize bonds, stands at 500.15 billion, which was Rs 500.87 billion at the end of 2004-05. The floating domestic debt, mainly comprising short-term debt instruments and market treasury bills, maintaining a rising trend, was recorded at Rs 778.16 billion at the end of June 2005. And, during the following one year it went up to Rs 940.23 billion.
The data further shows that the unfunded domestic debt, comprising National Saving Schemes (NSS), which stands at Rs 856.48 billion, grew by Rs 2.44 billion from Rs 854.04 billion at the end June 2005.
However, the data shows that net mobilisation under all instruments of NSS, except relatively new instruments ie Bahbood Saving Certificates, Postal Life Insurance and Pension Benefit Accounts and Mahana Amdani accounts, was once again negative during 2005-06. Net investment in NSS fell primarily because the rates of return had become too low for investors to make fresh investment, as a result of gradual profit slashing during last few years.
Of these three most popular instruments of the NSS ie 10-year Defence Saving Certificates (DSCs), five-year Regular Income Certificates (RICs) and three-year Special Saving Certificates (SSCs), net withdrawals were Rs 80.51 billion during 2005-06. The erstwhile popular instruments-the DSCs, SSCs, and RICs-had become less attractive for investors.
Besides, withdrawals from saving accounts, special saving accounts and general provident (GP) fund during the period under study were Rs 1.89 billion, Rs 814.7 million and Rs 233 million, respectively. The SBP data shows that Bahbood Saving Certificates, Pensioners Benefit Accounts and Postal Life Insurance attracted net fresh investments of Rs 59.64 billion, Rs 16.38 billion and Rs9.85 billion, respectively.
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