THIS refers to the news report ‘Govt raises Rs97.6bn through PIBs’ (Oct 8). Fearing large fiscal deficit, the government raised nearly twice the target to Rs50bn set for October.

It is also reported that the government’s borrowing from scheduled banks during the first two-and-a-half months of this fiscal year has rocketed to Rs383bn against Rs57bn borrowed in the same period last year.

The above borrowing trend means that there is a large shortfall in the tax collection target of the Federal Board of Revenue, while the current expenditure continues to show increase.

The fiscal position appears to be precarious, while the government has given no roadmap for controlling the disturbing pattern.

The country has fallen into a debt trap, and new loans are being taken to pay old debts as well as meet the government’s running expenditure including defence.

The domestic and external debt has reached an unprecedented level, which is an indication of poor debt management on the part of the government. The government’s obsession with borrowing is bleeding the economy.

Notwithstanding the rosy picture being painted by the government’s finance team, led by Ishaq Dar, the country’s economy is drifting towards a crisis, compounded by dwindling exports.

A.M.
Karachi

Published in Dawn, October 13th, 2015

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