The Sindh Government has paid off Rs 5.815 billion cash development loans taken from the federal government during 1986-1995, it was learnt on Wednesday.
This retirement was done on the initiative of Adviser on Finance M A Jalil, who carried out an arduous exercise in respect of overdue loans to free the province of financial burdens and to save money for development projects being planned for the next financial year. Cash Development Loans (CDL) to be retired in 1986-87 stood at Rs 839.396 million as on April 1, 2007, and carried the interest rate 14.66 percent (per annum).
Similarly, CDLs to be retired in 1987-88 stood at Rs 701.178 billion on April 1, 2007 and carried interest rate 15.28 percent; CDLs to be retired in 1988-89 stood at Rs 340.017 million and carried interest rate 14.84 percent; CDLs to be retired in 1989-90 stood at Rs 1949.843 million on April 1, 2007 and carried interest rate 15.93 percent; CDLs to be retied in 1990-91 stood at Rs 1265.687 million on April 1, 2007 and carried interest rate 15.93 percent; and CDLs to be retired in 1994-95 stood at Rs 719.597 million on April 1, 2007 and carried interest rate 15.59 percent. The cumulative burden of the loans on April 1, 2007 stood at Rs 5815.718 million.
The Finance Department worked out that with the paying off of six billion rupees the province would save one billion rupees per year. The expenditure involved in the retirement of debt is sanctioned outside the budget grant and will be met by way of reappropriation from the existing allocation or by obtaining a supplementary grant under the head of Demand No SC-1400E-Debt Servicing (Loan from Central Government Discharged)-KA-4374-Repaym-ent of Principal Domestic Debt (Charged) Payable to Federal Government -A-10170-to Others during the current financial year 2006-07. The credit impact of this amount may be taken under the head of account of the Federal Government Domestic Loan.
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