ISLAMABAD: The Pakistan Muslim League-Nawaz government obtained total foreign loans of Rs1.2 trillion, exceeding its original target of Rs810bn for the outgoing fiscal year by around 48 per cent to finance its expenditure.
The foreign loans obtained by the government in the current fiscal year are around 24 per cent higher than Rs971.60bn obtained in 2016-17.
For the next fiscal year, the government plans to raise Rs1.08tr loans.
According to budget documents, the government estimated to receive Rs27.08bn as foreign grants at the start of the current fiscal year, but it expects to get Rs26bn.
The key foreign loan-obtaining entities of the federal government are the autonomous bodies with Rs163.12bn. The NHA borrowed Rs85.16bn, Wapda Rs50.69bn, Pepco Rs27.26bn and other federal government departments got Rs16.63bn from external sources.
It is estimated that the NHA will be receiving Rs84.21bn in terms of foreign loans for the fiscal year 2018-19, whereas Pepco is estimated to obtain Rs32.36bn and the autonomous bodies Rs130.05bn.
Out of the Rs133.11bn foreign loans obtained by the provinces, Punjab received Rs89.35bn, Sindh got Rs24.60bn, Khyber Pakhtunkhwa received Rs17.76bn and Balochistan got Rs1.39bn. Balochistan also received Rs4.19bn in foreign grants.
However, the foreign loans to be obtained by Punjab in the upcoming fiscal year are projected to be Rs62.99bn, Sindh Rs39.90bn, Khyber Pakhtunkhwa Rs30.45bn and Balochistan Rs4.07bn.
During the outgoing fiscal year, the government obtained Rs16.63bn loans for the federal PSDP, which include Rs10.45bn from China — Rs7.20bn for Chashma, Rs1bn for Pakistan Remote Sensing Satellite and Rs1.25bn for construction of optical fibre cable from China to Rawalpindi. Chinese loans worth Rs12.19bn were received by Wapda for the Neelum-Jhelum hydropower project and Rs56.14bn for seven road projects.
Wapda also received loan worth Rs15.03bn from the IDA for the Dasu hydropower project and extension of Tarbela.
The largest aid-granting country for Pakistan was the United States with 557.44m aid to the federal projects. The country is expected to get Rs721.36m grant from the US during the next fiscal year. The US also provided aid worth Rs2.73bn to Pakistan’s power sector. The US also provided the largest amount of grant to the provinces.
Saudi Arabia was the largest aid-giving country for federal projects in Pakistan during 2017-18 as it released Rs2.78bn for establishment of a home economics college and a hospital in Islamabad.
The Saudi government is expected to grant Rs3.02bn in aid during the next fiscal year.
However, no aid came from China for the federal projects despite the estimate of Rs1.30bn for two Gwadar-based projects during the outgoing fiscal year. The new budget estimates an inflow of Rs1.50bn in aid from China in the next fiscal year.
Among the provinces, Khyber Pakhtunkhwa was the highest aid-receiving province with inflow of Rs6.87bn, led by the US with Rs5.23bn for several projects.
The province is estimated to receive Rs9.12bn in foreign grants for the next fiscal year, mostly from the US (Rs6bn) and Germany (Rs1.70bn).
Balochistan received Rs4.19bn in foreign aid, including Rs3.03bn from multiple-donors and Rs1.15bn from Oman in the outgoing fiscal year. The province is estimated to get Rs5.15bn in foreign aid during the next fiscal year. Sindh received Rs2.31bn in foreign aid, including Rs1.66bn from the US. The province is estimated to receive Rs6.97bn in aid in the next fiscal year.
Punjab received a meagre amount of Rs25m in grant from the ADB for its rice value chain project.
Published in Dawn, April 28th, 2018