Added Miseries: Every Pakistani is Indebted of Rs 176,000

Already-troubled people have plunged more into debts during two years of the Pakistan Tehreek-e-Insaf (PTI) government as every Pakistani in the population of over 200 million is indebted of Rs 176,000.

As per the debt policy statement 2019-20 issued by the ministry of the finance ministry, in August 2018, Pakistan’s total debt was standing at Rs 24.731 trillion.

However, during two years of PTI in power, it has escalated to Rs 35.668 trillion until September 2020.

Further, the report said during the past 15 months, the country’s internal debts rose by Rs 2,660 billion while its current figure is Rs 23,392 billion.

Similarly, in the same span, the external debt increased by US$6 billion and its total figure currently stands at $US79.90 billion.

Pakistan has taken the most number of loans from the World Bank (WB) having a volume of $US16.18 billion followed by the Asian Development Bank (ADB) having a volume of $12.74billion.

The borrowing from the countries members of the Paris Club stands at $US10.92 billion while loans of US$13.42 billion have been taken from countries outside the club.

According to the ministry’s policy statement, the volume of loans borrowed from international commercial banks has reached $US8.95 billion.

Dollar Exchange Rate

Meanwhile, when the PTI came into power in August 2018, the exchange rate of $US against the Pakistani rupee was Rs 123 which surged to Rs 165 as recorded in September 2020.

Between June 2019 and September 2020, the depreciation of the rupee against the US dollar increased the debt volume by Rs 399 billion.

FRDL Law

In 2010, Pakistan People’s Party (PPP) government enacted the Fiscal Responsibility and Debt Limitation Act (FRDL) 2005.

Under the law, the federal government was required to limit the proportion of loans to 60% of the Gross Domestic Product (GDP). However, PPP’s government violated the Act itself during its tenure from 2008 to 2013.

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The next government of Pakistan Muslim League- Nawaz (PML-N) trod in the footsteps of its predecessor and breached the rule too.

Like the previous two governments, the PTI government has not been able to bring the ratio of loans to GDP to 60% as restricted in FRDL Act and its current figure is 81.1%, leaving every Pakistani indebted of Rs 176,000.