The government borrowing for commodity operations is likely to touch Rs 425 billion by June 30, 2011. It was reportedly stated by the officials of State Bank of Pakistan (SBP) during a meeting of the Monetary and Fiscal Co-ordination Board.
Sources said officials of the SBP have informed the board meeting chaired by Finance Minister Dr Abdul Hafeez Sheikh with concerns that Rs 275 billion current outstanding for commodity operations is likely to go up to Rs 425 billion by June 30, 2011. The increase may be because of Rs 164 billion approved by the Economic Coordination Committee (ECC) recently for procurement of wheat in coming season.
The Governor of SBP, Shahid Kardar briefed the meeting on the recent developments on the monetary side and stated that government borrowing should be reduced to expand the shrinking credit share of the private sector. He reportedly said that private sector''s borrowing of Rs 168 billion is likely to squeeze between Rs 130 and Rs 140 billion by June 2011.
An official told Business Recorder that by April 22, 2011, outstanding on account of commodity operation stood at Rs 276.5 billion for wheat, sugar, urea and rice. Punjab and Sindh governments owed Rs 99 billion and Rs 17 billion respectively whereas Passco and TCP have to clear Rs 61.1 billion and Rs 99.3 billion, respectively. The borrowing includes Rs 175 billion for wheat, Rs 44.7 billion for sugar, Rs 41.1 billion for urea and Rs 15.2 billion for rice.
The official requesting anonymity said the SBP has expressed serious concerns over the huge amount stuck under this head and the possibility that it may go up to Rs 425 billion by the June 2011. The officials of the SBP were quoted as saying that borrowing by public sector enterprises stood at Rs 388. The meeting was also informed that exports would reach around $22.2 billion, 10 percent of the GDP, during the current fiscal year and imports are likely to be around $34 billion.