Government borrowing from banks up by 59.76 percent

The government has borrowed Rs 84.178 billion from the banking system (SBP and scheduled banks) to fill in the gap between its income and expenses in less than four months from July 1 to October 21, 2006, the State Bank of Pakistan (SBP) reported.
During this period, it made a net retirement of Rs 27.33 billion--bank credit received earlier for purchase of commodities by state-run organisations.
This combined borrowing of the federal and provincial governments of Rs 84.178 billion was 59.76 percent more than what it borrowed (Rs 52.69 billion) in the corresponding period of last fiscal year.
Under the credit plan for 2006-07, the government is supposed to keep its bank borrowing for budgetary support up to Rs 130.1 billion.
It is worth mentioning that for budgetary borrowing, the government is now shifting towards non-bank sources. For this purpose it has increased the rates of ordinary national saving schemes effective from July.
According to the break-up, the central government''s net borrowing rose to Rs 54.86 billion, from Rs 28.18 billion borrowed in corresponding period of last year.
Provincial governments during this period borrowed 29.32 billion, against Rs 24.51 billion they had borrowed in same period of last year.
The central government borrowed Rs 83.23 billion from SBP as against Rs 75.82 billion in last year, retired Rs 28.36 billion of scheduled banks.
The Bank further says that provincial governments during this period borrowed Rs 1.03 billion from scheduled banks, against Rs 6.54 billion borrowed during the same period of last year. From SBP, they borrowed Rs 28.28 billion, as compared to Rs17.97 billion.