ISLAMABAD: The government has lowered the projected public debt repayment target by almost 21 per cent to Rs19.05 trillion for 2024-25, as it reduces the target for treasury bills (T-bills) and prize bonds.

The public debt payments in the outgoing fiscal year were Rs24.08tr, which includes domestic permanent debt and floating debt.

The government plans to reduce repayment for the next fiscal year in the floating debt category comprising prize bonds, T-Bill auctions and Maujjal Ijara Sukuk.

The government has set a Rs12.51tr auction target for T-bills, compared to Rs25.34tr in 2023-24, but auctions worth Rs20.61tr were held in the outgoing fiscal year.

Like FY24, the government has no plan to launch Sukuk bonds for 2024-25.

However, the debt repayment of prize bonds will be around Rs8.99 billion for the next fiscal year, compared to Rs9.01bn in 2023-24.

Regarding permanent domestic debt, the repayment target is Rs6.53tr against the payment of Rs3.46tr made in the outgoing fiscal year.

The main increase has been set for the repayments of Rs5.18tr for Pakistan Investment Bonds (PIBs) to the banking sector, and Rs203.63bn to the same bonds for non-banking.

Ijara Sukuk (Islamic bonds) repayment for FY25 is Rs752.53bn compared to Rs274.69bn in 2023-24.

No repayment will be made for the 3-year Pakistan Banao Certificates as they already matured in 2023-24, but the payment of Rs2.88bn will continue for the 5-year Pakistan Banao Certificates.

The repayments of foreign exchange bearer certificates, foreign currency bearer Certificates, US dollar bearer certificates, and Special US dollar bonds have slightly increased.

Savings schemes

At the same time, the target for the repayment of National Saving Schemes (NSS) and provident funds has been reduced for the upcoming fiscal year.

In the outgoing fiscal year, the government paid Rs1.88tr for 14 national saving schemes and Rs82.52 bn in provident funds for government employees. However, for 2024-25, the target has been set at Rs1.60tr, against the Rs1.96tr spent in the outgoing fiscal year.

The government plans to reduce the disbursement of provident funds by Rs4.64bn for the next fiscal year to Rs77.88bn.

Whereas the repayments in terms of NSS will be Rs1.52tr, and the key reductions are in defence savings certificates, special saving certificates (registered), special saving accounts, regular income certificates, pensionary benefits and the Behbood Savings Certificates.

At the same time, the Shauhda Welfare Account and Sarwa Islamic Saving Accounts have seen a slight increase.

At the same time, the government has set the target of spending Rs135.71bn through various deposits and funds belonging to government departments and employees.

This includes around Rs2.15bn in the federal government employees’ benevolent fund and the group insurance fund of some government departments.

The spending target for benevolent fund, group insurance and other deposits for employees of the defence ministry amounts to Rs9.89bn.

The spending related to public account expenditure through Pak PWD will be Rs55.04bn in 2024-25 and the Workers Welfare Fund allocations have been targeted at Rs25bn by the federal government.

The government has set the target to spend only Rs10.96 billion out of the Universal Service Fund (USF), which is the amount the telecom companies deposit from their earnings. This fund can only be used to develop IT and telecom infrastructure in unserved areas.

Published in Dawn, June 20th, 2024

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