The government will not get loans from the International Monetary Fund (IMF) on dictated conditions and details of the loaning agreement with the IMF will be shared with parliament and it will also be displayed on the Finance Ministry's website, Finance Minister Ishaq Dar on Sunday declared in the National Assembly. The PPP government, he said, had obtained loans worth $8.5 billions in one go, but Pakistan's honour demanded that loans should be repaid and "this year $3 billion in loans will be paid to the IMF", he said.
Winding up the budget debate, the Finance Minister said that over the past five years, Pakistan faced financial indiscipline, but the current government "is determined to fix this (situation).
On the issue of circular debt, he said that Rs 503 billion had been earmarked in the budget to eliminate the circular debt, adding that between July 1 and August 12, the balance amount would be cleared.
The volume of circular debt was Rs 508 billion by May 31 this year, he said.
Ishaq Dar said they had to come up with a permanent solution to avoid circular debt, adding that the debt did not accumulate just because of "traffic differential", but other factors, such as line losses, interest on loaning, also affected its quantum.
Challenging figures presented by Nafeesa Shah of PPP, who contended that the PPP-led coalition government had paid Rs 200 billion to clear circular debt in 2009, Dar said that the previous government had paid Rs 1,485 billion in subsidy in the energy sector over the past five years. "This led to additional burden of foreign debt liabilities," he said.
"We will settle the (matter of) circular debt - private and public both - within 60 days as per my commitment to parliament," he maintained.
The government, he said, was concentrating on the private debt of Rs 370 billion which would be paid back by June 30, adding that the remainder of outstanding dues would be cleared between July 1 and August 12.
He assured the House that the circular debt would not be paid off by printing currency notes because it was disastrous for the economy of any country.
Ishaq Dar said that the increase in GST had been proposed for revenue generation, adding that there was a long list of essential food items which would remain exempted from GST and the Federal Board of Revenue had issued necessary instructions to its field offices.
According to him, the government is committed to revive old magisterial system after the adoption of the federal budget for monitoring the GST imposition, adding that sometimes, the increase "is exploited which causes price hike".
The Minister said fiscal deficit 8.8 percent would be brought down to four percent in a few years, but right now, there was a need to take tough decisions as the government did not want to resort to printing of currency notes and indiscriminate borrowing.
Dar said that debt-to-GDP ratio would also be gradually brought down to 57.5 percent from the current 63.5 percent to ensure fiscal discipline.
He said the government would also pay off Rs 450 million loan obtained by Railways in one go.
The Minister said that the government would recover outstanding dues against Etisalat, and the Coalition Support Fund "within a month".
He said he visited the Middle East where he met with officials of Etisalat who complained that they suffered financial losses because of grey trafficking in Pakistan. The Minister quoted officials of Etisalat as saying that transfer of PTCL property was "not a major issue".
"We are not getting money from Etisalat because of grey trafficking...we will launch a crackdown on grey trafficking," he said.
The Minister said that the auction of 3G licence would be done in a transparent manner and the government intended to raise a substantial amount. "We have projected a sum of Rs 1,200 billion through this auction which was put at (just) Rs 84 billion in the previous budget," he said.
He said that there "is a throw forward of Rs 3,000 billion worth of projects" which were announced, but no financial arrangements were made to execute these schemes.
The Minister said that taxes on property were domain of the provinces. The government was just implementing the Supreme Court's decision on provisional collection of taxes, adding all previous governments had been collecting provisional taxes but this issue had been raised for the first time in Parliament.
Commenting on the apex court's decision on GST, he said there were various laws before independence of Pakistan and many of them were given a cover under the 1973 Constitution. The Minister said that tax on fees of students studying in expensive schools "will be adjustable".
The National Assembly on Sunday approved 27 demands for grants of Rs 1317.72 billion for finance, economic affairs, statistics and privatisation divisions.
Dar presented the demands of the said Divisions in the House while the opposition members tabled as many as 153 cut motions. Responding to cut motions on Ministry of Water and Power, Minister for Water Khawaja Asif said that the government had chosen a direction to resolve the energy crises.
He said that the government would announce an outline of a comprehensive policy in this regard in 10 days for overcoming power shortages.
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