ISLAMABAD, Sept 7: Pakis-tan’s total outstanding domestic debt crossed a staggering Rs1.850 trillion mark on June 30, 2003, up by about Rs133 billion from Rs1.718 trillion in June 2002.

The total domestic debt in June 2003, alone has increased by Rs63 billion. It was recorded at Rs1.787 trillion in May 2003, but went up to Rs1.850 trillion a month later on June 30, 2003.

According to the latest data of the State Bank of Pakistan, total domestic debt by the end of June 2001, was Rs1.730 trillion which declined to Rs1.718 trillion by the end of June 2002. However it went up to Rs1.850 trillion by the end of June 2003.

A comparison of the three-year debt data indicates that permanent debt is increasing at a steady pace. It was slightly over Rs281 billion at the end of June 2001, but jumped to Rs368 billion in June 2002, up by Rs87 billion. It further rose to Rs428 billion on June 30, 2003, by Rs61 billion, lower than previous year.

The permanent domestic debt comprised medium and long-term market loan, federal government loans, special government loans, federal instruments and prize bonds.

The floating domestic debt, mainly comprising ad hoc and market treasury bills, is maintaining a declining trend. It was recorded at Rs738 billion at the end of June 2001, but came down to Rs558 billion by the end of June 2002, and dropped to Rs516 billion by June 30, 2003.

The central bank figures suggest that unfunded domestic debt, comprising almost all deposits of the national savings schemes, continued to rise during the last three years.

The unfunded domestic debt stood at slightly over Rs712 billion on June 30, 2001. It increased to over Rs792 billion a year later and went up to Rs906 billion by June 30, 2003.

The figures also suggest that while defence savings have been on the rise from Rs265 billion in 2001, to Rs287 billion in 2002, and further to Rs309 billion in June 2003, the borrowing from the National Defence Savings Schemes has been declining from Rs41 million in 2001, to Rs35 million in 2002, and to Rs29 million in 2003.

The domestic debt increased through the Special Savings Scheme has witnessed a significant raise during the last three years. It amounted to Rs173 billion in June 2001, and increased to Rs209 billion in June 2002, and touched Rs294 billion in June 2003.

The debt raised through regular income scheme and GP fund has remained almost static during the period. The regular income scheme stood at Rs179 billion in 2001, and increased to Rs190 billion in 2002, but dropped again to Rs175 billion in June 2003.

Similarly, GP fund collection amounted to Rs18.5 billion, Rs18.7 billion and Rs18.4 billion in 2001, 2002 and 2003 respectively.

The government has been saying all along that rising domestic debt stock has serious implications for debt service obligations. The domestic debt servicing in Pakistan consumed over 66 per cent of the total revenue, leaving very little fiscal space for development spending, social sector and physical infrastructure spending.