Rs 1.5 trillion liabilities to be parked outside budget

Finance Ministry said on Monday that the federal government's liabilities of power sector's circular debt, outstanding refunds and rebate, PSEs' debt and circular debt of LNG (around Rs1.5 trillion) will be parked outside the budget for the next fiscal year. An official of Finance Ministry on condition of anonymity said that these are not being charged on the budget owing to their impact on the fiscal deficit.
Earlier, during a meeting of National Assembly Standing Committee on Finance, chaired by Qaiser Ahmed Sheikh, Special Secretary Finance Noor Ahmed stated, "None of them (federal government's liabilities) will be charged in the budget."
The special secretary stated this while replying to a question of Asad Umar who had asked whether or not the Finance Ministry will recognize federal government's liabilities of Rs525 billion circular debt, Rs400 billion refund and rebate as well as Rs500 to Rs1,000 billion public sector enterprises' debt and LNG circular debt in the book. Noor Ahmed replied that they will not be charged in the budget. He, however, stated that some arrangements are being made for settlement of Rs525 billion circular debt and Rs10 to Rs20 billion will be earmarked in the budget for the next fiscal year as arrangement cost. The Finance Ministry also agreed that there will be a serious challenge to sustain the growth of 5.8 percent in the next fiscal year with such a high budget deficit after members of the committee stated that growth was fueled by increase in government spending, saying that 5.6 percent fiscal deficit is far higher than 4.3 percent target set in the budget.
The special secretary said that there are serious challenges on the external side with current account deficit may be over 5 percent of the GDP this year. He briefed the committee about the future challenges to the economy and broad contours of the budget for the next fiscal year 2018-19. The committee also considered the voluntary declaration of Domestic Assets Bill, 2018, the Foreign Assets (Declaration and Repatriation) Bill, 2018 and the Income Tax (Amendment) Bill 2018.