Prescribed public debt limit surpassed? government borrowing reaches 64 percent of GDP: SBP

After dismissing apprehensions that public debt had surpassed the prescribed limit, with government borrowing in excess of 60 percent of GDP, State Minister for Finance Hina Rabbani Khar agreed to re-check and inform the Senate about the actual situation.
"We have not crossed the borrowing limit set by this house," was the initial response of the Minister to a question. However, she said they were on the brink of that limit. The government needs an approval from this house in case it wants to cross the limit, she added. Dissatisfied with the answer by the Minister, Senator Haroon Akhter referred to a meeting of standing committee on finance wherein he revealed that the State Bank of Pakistan had confirmed that borrowing had reached 64 percent of the GDP.
He questioned the Minister where the money was spent. 'Is luxury the only objective of the government?' he added. Senator Ishaq Dar of the PML-N endorsed the point raised by Senator Haroon Akhter with respect to extravagant spending by the government and Professor Khurshid of Jamat-e-Islami stated that the government had not bother to seek permission from Parliament to cross the limit.
At that, Hina Rabbani Khar responded in affirmative and added "I will confirm and come back to the house." While denying extravagant spending by the government, she accused the provinces of over spending, saying that an additional Rs 300 billion, under the 7th NFC award, had been transferred to provincial governments but responsibilities had yet to be assigned.
"A serious dialogue is going on within the government and we are exploring options to cut our expenditures," she said. In response to a question on Reformed General Sales Tax (RGST) Hina Rabbani Khar said that they had to look into the matter realistically. Referring to the ongoing consultative process with political parties of the country to overcome the economic crisis she said, 'the government would welcome any alternatives, if there are any, but there is a dire need of revenue mobilisation.'
While justifying over 70 percent increase in electricity rates, Hina Rabbani Khar enumerated several factors responsible and said global fuel price was a major element. Ishaq Dar pointed out at line losses coupled with theft, saying it had reached up to 40 percent in some cities and asked for government's plan to overcome this problem. The answer lies in technology, said Hina Rabbani Khar, adding Wapda had introduced smart metering system, which had produced good results.