Budget makes no mention of how circular, public sector debt will be paid: Asad Umar

Shortly after the outgoing PML-N government presented a sixth full-term budget in the National Assembly on Friday, Pakistan Tehreek-e-Insaf (PTI) lawmaker Asad Umar took to Twitter to point out what he deemed were the shortcomings.

"No mention in the budget about how and when the more than 500 billion [rupees] of circular debt and more than 1 trillion [rupees] of public sector debt will be paid," said Umar. "Totally false and understated fiscal deficit hiding large unpaid amounts [which are] not recognised in the budget."

Newly appointed Finance Minister Miftah Ismail, who announced the budget amid protests, said that the government intends to restrict the overall fiscal deficit to Rs1890.2bn or 4.9pc of the GDP, down from the revised estimates for the year 2017-18 which stood at 5.5pc.

"The budget also does not deal with the reality of dangerously falling foreign exchange reserves and the headlong rush of the economy towards a bailout," Umar alleged.

PPP's Sherry Rehman, the leader of opposition in the upper house of Parliament, rejected the government's "22 trillion debt-laden budget", adding that the provinces were doing the right thing by presenting a short budget.

Earlier in the day, opposition members in the Parliament protested against PML-N presenting a full-year budget, saying it wanted the government to present a budget only for one quarter.

Umar's fellow PTI member, Shah Mehmood Qureshi, also took issue with Ismail "an un-elected minister" presenting the budget.

"The leader of the opposition has said there is no moral justification for the government to present the full-year budget," he added, backing Syed Khursheed Shah's reservations.

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Budget 2019

Business

Opposition ‘plans’ protest during NA, Senate budget sessions today

Budget 2018-19: Govt slashes PSDP, raises defence spending to Rs1.1 trillion

Economic survey 2017-18: External sector deficits cloud survey outlook

Nomi Goraya

Apr 27, 2018 08:33pm

DEBT is not the measure of health of economy at least a learned person like Asad must now. Do you know internal debt of USA? I am not saying that economy is all sound but at least be rational when you quote the facts

Recommend 0

SHAHID SATTAR

Apr 27, 2018 08:37pm

May be they want that to be worked out by the new government which will be coming after the elections.

Recommend 0

Malik USA

Apr 27, 2018 08:38pm

I am not an Economist but I can easily say this is a false budget. This is only the eye wash and making fool to poor Pakistani with figures only.

Recommend 0

Abram

Apr 27, 2018 08:42pm

another 2 months of euphoria left for pakistan.....enjoy it while it lasts...........

Recommend 0

Miraaj

Apr 27, 2018 08:52pm

Look who is talking. Worst ever financial performance of KPK with historix increase in debt for KPK he is out there trying to tell picture. The most devastated tax structure the KPK has, the target PTI itself was not met by even 10% and if you happen to deal with KPK tax people you should consider your self doomed. They have adopted Punjab tax as a basis and no improvement at any stage for KPK. Now after disaster performance in KPK the Asad Umer trying to hide it. So what is your plan in KPK budget about income, taxes, targets and huge external debt that KPK province took?

Recommend 0

SMI

Apr 27, 2018 08:52pm

What should b the action against lier

Recommend 0

Saeed

Apr 27, 2018 09:19pm

It is shameful

Recommend 0

Saleem

Apr 27, 2018 09:24pm

@Nomi Goraya Einstein, US debt is 99% in dollars which they can print and hand it to the creditors. We can't print dollars...

Recommend 0

Paracha

Apr 27, 2018 09:34pm

Asad umer is so called law maker elected for Islamabad region. Yet you will never see him on ground and is always inaccible. He is onlh master is talks. If you see the KPK financial conditio than thing not twuce but thrice in handing him any finance related job if for remote circumstances PTI comes to power in coalition with PPP. This ma is a dissapointment. He looked very promising but turned out only promising on TV and faceboom

Recommend 0

Rahmah

Apr 27, 2018 09:43pm

That is something for coming gov (PTI?) to think. Out going gov is least bothered about it.

Recommend 0

Apr 27, 2018 10:07pm

Asad Umar, Techniques are out of understanding, he just create panics among the people by presenting graphs and colourful histograms.

Recommend 0

Apr 27, 2018 10:19pm

@Rahmah do you believe PTI will win the coming election, I don't think so.

Recommend 0

Political connoisseur

Apr 27, 2018 10:22pm

Good pointation by Asad Umer. Besides no comments about devaluation. The Financial Health is measured and gauged by the value of currency, the trade deficit, and debts both foreign & domestic. All these 4 indicators are unfortunately not in good shape .As an overseas Pakistani I must suggest to keep precious foreign exchange reserves,ban all luxury imports,ban import of cars we are already producing cars,stop corruption, re-invent barter trades, don't miss chances of earnings through transit trades, keep transit fees viable. Build Dams & Articial Lakes, promote Solar Energy. And last but not least curtail government expenditures, and introduce austerity measures. I must appreciate PM Shahid Khaqan Abassi for his simple dressings, very simple get up.

Recommend 0

Safdar

Apr 27, 2018 10:45pm

@Nomi Goraya you need to show the debt in the books. This is not a factual budget, rather window dressing to show a rosy picture. Additionally debt is healthy up to a limit but when the govt. Start relying solely on debt instead of increasing revenues then economies are doomed. We have falling export and forex reserves. You don't need to be an economist to know where we are headed.

Recommend 0

Ajay

Apr 27, 2018 10:57pm

@Malik USA : give some specific facts please? Dont just generalize comments. If you are not an economist, better to understand it from learned men.

Recommend 0

Tariq, Lahore

Apr 27, 2018 11:16pm

Why does an administration which has only 2 or 3 months remaining in office would want to present a whole fiscal years budget??

Recommend 0

Khattak

Apr 27, 2018 11:41pm

@Miraaj could you back up your argument with numbers please??? Or you are just trolling around?

Recommend 0

Mahmood

Apr 27, 2018 11:45pm

@Nomi Goraya Debt is a part of fiscal budgets. Besides comparing US debt with Pakistan debt is ignorant, both economies operate on a completely different structure and scale. Debt does impact economic health, when your economy can not sustain it. Pakistan is right at the edge at the moment, we can recover with sound governance. Low FDI and exports, devalued currency, very few ROI project, and no long term debt planning, are alarms towards our economic health. Everything can be managed with good governance, which this current administration lacks

Recommend 0

efkar

Apr 27, 2018 11:46pm

@ Nomi Goraya, Debt Increase, is just one of the indicators, just like Weight Increase which can be bad or good depending on whether you are skinny or obese. If money borrowed is used to increase industrial production / stimulate economy then can be good. But if used mostly to service existing debt, like Pakistan's case, then it is good measure of how bad the health of the economy is.

Recommend 0

Khaja

Apr 27, 2018 11:49pm

Just tell us the PTI would reduce the debt. Educate the Hon'ble Finance Minister and us.

Recommend 0

Shahgee

Apr 28, 2018 12:06am

@Nomi Goraya us economy is not in a very good state either. Pakistan could pay heavily due huge debts

Recommend 0

Khan

Apr 28, 2018 01:03am

Opposition would never appreciate a budget proposal by the government, however balanced and forward looking it might be. It’s the same case around the world in USA,UK,Canada and Australia too.

Recommend 0

SAFFI

Apr 28, 2018 01:21am

@Miraaj where did you get all these figures from? your dreams? make some references at least

Recommend 0

Akram Zahid Niazi

Apr 28, 2018 02:23am

@Nomi Goraya This makes me laugh Sir that debt is not the measure of financial health of the country.

Recommend 0

Umair

Apr 28, 2018 02:48am

@Nomi Goraya well apparently asad umer has led an organization to higher grounds with his capabilities and if u ever saw the talk show where miftah and asad umer both were present you would get the idea of how asad presented logic and miftah kept ducking the questions. The same person now has given a budget which clearly isnt theirs since they will be out and going in about a month. We are in debt and for any country it isnt good. Budgeting means keeping a provision for all the expenses and debt is an expense which has to be paid so yea its a measure which has to be understood. You cant just close ur eyes. Dollar touched all time high as well btw so do us all a favor and stop defending noonis when u clearly know they r wrong.

Recommend 0

Amjad Durrani Engineer USA

Apr 28, 2018 03:12am

@Nomi Goraya Your comment hardly make any sense whatsoever.You must be aware that beggars are not choosers.In basic financial terms a lender always put the loanee under microscopic scrutiny and it is a normal deal that all the collateral against the debt given are demanded upfront.Similarly international donors/lenders ensures that after making out a loan to a country,they thoroughly scrutinize its fiscal policy dealing with its currency's real worth compared to shadow exchange rate,taxation, prices of goods,earnings through exports,import duties and subsidies,inflation so on so forth.It is imperative for these lending agencies to ensure a country's financial through its capability to service internal and external debt servicing.There is no jugglery involved as our financial health is on radar and any sign of deviation from their set rules which we have accepted is bound to bring a dictated harsh regime of do and do not and there are no if and but.Pakistan is already on lenders notice.

Recommend 0

Fahad Sheikh

Apr 28, 2018 05:22am

@Nomi Goraya Foreign debt is owed in dollars. Can you print dollars? no. USA can. US doesn’t have to care about the debt as much, we do. World is willing to accept US debt at bonds as low as 2% interest. Who gives Pakistan loans at that rate? IMF loans are at 7% for Pakistan while our GDP only grew maybe 5%. Comparing US Debt to Pakistan is shallow analysis.

Recommend 0

Zafar Ahmed

Apr 28, 2018 07:02am

@Nomi Goraya It depends on the capability to pay back without putting additional tax burden on the people !

Recommend 0

rino

Apr 28, 2018 09:00am

@Nomi Goraya Look at the holistic picture my friend, while debt can be argued as good or bad, the issues of falling reserves, adverse balance of payments, weakening currency, low comparative exports, maturing repayments alongwith circular debt cannot be ignored.

Recommend 0

Bilal

Apr 28, 2018 09:02am

Very important points raised by Asad Umer, ignoring 2 (circular debt & public sector debt) govt can't claim any economic achievement. Exports are decline, debt to GDP has increased and PKR devalued , it's called borrowed economy

Recommend 0

AXH

Apr 28, 2018 09:09am

The smart person has spoken.

Recommend 0

Shoaib Cheema

Apr 28, 2018 09:12am

Good thing is PML N has accepted that non elected members can manage most important functions of elected government. Like Budget and Finance. Technocrats are also an option when nothing seems working.

Recommend 0

rino

Apr 28, 2018 09:54am

@Saleem rightly said, and also with petrol dollars they have a consistent demand for their currency

Recommend 0

Abbasshah

Apr 28, 2018 01:11pm

Done nothing for its constituency where he got selected ,except making hurdles no positive contributions nor workable alternatives,only offspring of influential s.

Recommend 0