LAHORE: The Lahore High Court on Tuesday directed the federal government to submit complete details of foreign debts obtained by the country.
Justice Shahid Karim was hearing a public interest petition challenging a decision of the previous government to change the meaning of “public debt” in contravention of a Supreme Court judgment.
The petitioner’s counsel, Azhar Siddique, argued that the apex court had ruled that no such changes could be made without the consent of the federal cabinet. However, he said, the then government did not seek the cabinet’s consent and changed the meaning of “public debt” by making changes to the Fiscal Responsibility and Debt Limitation (FRDL) Act 2005.
He said as per the new formula, total debt would be considered equal to the cumulative deposits other than the public debt of the federal and provincial governments within the banking system.
The counsel pointed out that the amendments had imposed a limit on the federal government budget deficit of four per cent of the gross domestic product (GDP). He said there was also a limit to restrict public debt to 60pc of the GDP on the general government debt. The most expensive commercial loan was procured by the previous Punjab government from a Chinese bank for the Orange Line Metro Train project, he claimed.
The counsel further asked the court to set aside the amendments to the FDRL Act 2005 and seek details of total external debt/loan from the federal and provincial governments.
Published in Dawn, January 19th, 2022