Fiscal year 2012-2013: Rs 926 billion earmarked for interest payment on debts
The Federal government has earmarked about Rs 926 billion, up by 17 percent, for payment of interest on domestic and external debts during the next fiscal year, 2012-2013 (FY13) owing to rising burden of liabilities. Sources in Ministry of Finance told Business Recorder on Thursday that the government's borrowing from domestic sources as well as from external sources continued to post a sharp increase followed by higher fiscal deficit.
This resulted in the massive payment of interest on these loans, therefore government has increase allocation, they added. At the time of announcement of fiscal budget 2011-2012, the federal government allocated Rs 790.977 billion for interest payment on domestic and external debts for the outgoing fiscal year.
However, under the revised budget estimates of FY12, it is being expected that the spending under the head of interest payment would surge to Rs 843.839 billion at the end of June 2012. Ahead of rising debt, the federal government has enhanced allocation under the interest payment on total debt of the country obtained from domestic and external sources.
Under this head, budgeted allocation for FY13 has been increased by some 17 percent, when compared with budgeted allocation of current fiscal year. Even the allocation for interest payment is 10 percent higher if compare with revised estimates of FY12. The federal government has earmarked Rs 925.775 billion for interest payment on domestic and external debts during FY13 as against allocation of Rs 790.977 billion for FY12, depicting an increase of Rs 134.798 billion. As per revised estimates of this fiscal year, amount for interest payment stood at Rs 843.839 billion.
Out of total allocation, government has to pay Rs 845.600 billion for interest payment on domestic debts and Rs 80.175 billion for interest payment on external debts. In addition, for the next fiscal the government has also increased the allocation for repayment of foreign debt by 58 percent as compared to revised budget estimates of the outgoing fiscal year.
The federal government has estimated Rs 215.962 billion for repayment of long term foreign debt during FY13 up from Rs 136.891 billion of revised estimates of FY12, showing a raise of Rs 70 billion. The actual allocation stood at Rs 243.179 billion for Fy12.
Sources said that rising burden of foreign and local debt has compelled the government to allocate more than previous years. Higher fiscal deficit is chief reason of rising borrowing, they added. It may mentioned here that Pakistan's total debt (domestic and external) stocks are continue to rise and reached peak level of Rs 11.6 trillion mark, up by 14 percent, during the first 10 months of this fiscal year.
The central government's total debt stocks have recorded a surge of 14 percent during July-April of current fiscal year. Total debt stock have reached new peak level of Rs 11.639 trillion by the end of April 2012 compared to Rs 10.176 trillion as on June 30, 2011, depicting an increase of Rs 1.463 trillion.
According to State Bank, the total domestic debt stocks are comprising permanent debt, unfunded debt and floating debt. In addition previously Foreign Exchange Bearer Certificates, Foreign Currency Bearer Certificates, Dollar Bearer Certificates and Special US Dollar Bonds held by the residents, were part of external debt liabilities but from June-08 & onward it is the part of domestic debt.
Comments
Comments are closed.