Govt seeks Rs34.6trn for debt servicing, constitutional institutions’ expenses M Haris

The government has requested the National Assembly’s (NA) approval for Rs34.6 trillion in borrowing for the next fiscal year to meet debt servicing and budget needs for Pakistan’s constitutional institutions.

According to a news report, Finance Minister Muhammad Aurangzeb presented a compulsory expenditure bill of Rs34.6 trillion to cover debt servicing and the requirements of the President of Pakistan, Supreme Court, NA, Senate, and other state organs.

Despite challenging economic conditions, these state organs have received budget increases ranging from 22% to 63% compared to the previous fiscal year. 

Under the constitution, these expenses are considered charged expenditures, which the NA cannot vote on. 

Approximately Rs710 billion has been requested for the obligatory expenditures of the NA, Senate, Election Commission, Supreme Court, president, Islamabad High Court, Federal Tax Ombudsman, Pakistan Post Office, Federal Ombudsman Secretariat for Protection against Harassment of Women, and the Foreign Office.

A summary of the spending bill presented to the NA indicates that Rs33.8 trillion is sought for debt repayment and interest costs. The financing needs have increased due to currency stress and high-interest rates at 20.5%.

The government typically repays principal loans by securing more debt, resulting in high debt-related expenditures compared to the Rs18.9 trillion budget for the next fiscal year. 

The Rs33.8 trillion sought for debt repayment and servicing is 17% lower than the original budget approved last year, due to borrowing in longer-tenor instruments, despite increased interest costs.