Summary Finance Ministry says by 7th NFC Award, country’s fiscal deficit has swelled to alarming position.
Advisor to ministry of Finance and Revenue Assad Amin stated this during the meeting of Senate’s standing committee on Finance and Revenue that met here on Thursday with Senator Nasreen Jalil in the chair.
While briefing the committee, Rana Assad Amin informed that under 7th National Finance Commission Award 70% of the resources are being transferred to the provinces and the remaining 30 per cent resources are being utilized by the federal government.
He said that during current fiscal year 2012-13 Rs.1450 billion will be transferred to provinces as compared to Rs.1200 billion transferred last year. During financial year 2010-11 an amount of Rs.1000 billion were transferred to provinces.
During briefing, Assad Amin told the committee that currently, saving ratio was 9.5 per cent of the Gross Domestic Product (GDP) which was 12 per cent two years back.
He said saving ratio has been decreased mainly because of two reasons. Firstly, 80% to 85% income consumed without saving while the second reason was that Rs.2 trillion is out of circulation which was needed to be brought in banking channel.
He, however, said that the government was making all-out efforts to bring this amount in banking channel by introducing various National Saving schemes. He informed that the Central Directorate of National Savings (CDNS) is all set to launch student welfare bond scheme from today (Friday) which will help generate Rs.1200 billion.
Senator Ilyas Ahmed Bilour remarked that banks have no amount to provide to the private sector for businesses as government has been taking huge loans from banking sector.
“Corporate sector should not be disturbed by the government by taking huge loans to run the affairs of the government”, Sentor Hamayun Khan Mandokhail said, adding that government needed to raise its revenue instead taking loans from banking sector.
On this, Rana Assad Amin admitted that the government’s huge borrowing has left nothing for the private sector to take loans from the banks. He said the overall releases of People Works program two has been made in the first 3 months of current financial year 2012-13.
Director General (DG) Debt ministry of Finance Masroor Qureshi accepted that loans has doubled in last 5 years; however said that the repayment of loans to the International Monetary Fund (IMF) would not affect fiscal position of county as it will be repaid from foreign currency reserves of the State Bank of Pakistan(SBP).
The committee also expressed its concern over the absence of Federal Finance Minister Dr.Abdul Hafiz Sheikh and directed to ensure his availability in the next meeting of the committee.
