ISLAMABAD:
Ruling party Pakistan Tehreek-e-Insaf’s (PTI) government has added around Rs 565 billion to the circular debt of the country so far. For the second consecutive time, the government has missed International Monetary Fund’s (IMF) debt-accumulation reduction target.
According to sources in the Ministry of Finance and the Ministry of Energy, after adjusting power subsidies, the average per month increase in the circular debt during the July-December period of fiscal year 2019-20 was Rs17 billion – higher than the government’s claim of Rs10 billion. “The government paid roughly Rs73 billion in power subsidies in first half of the current fiscal year,” they added.
The government has been making efforts to improve efficiency, but the power sector situation continues to be grim despite putting an additional burden of Rs405 billion on consumers in the past one year by increasing electricity prices. Out of the Rs405 billion, the government recovered Rs195 billion in the first half of the fiscal year, according to the Ministry of Energy officials.
According to the IMF report, in fiscal year 2018-19, the federal government added Rs465 billion to the circular debt. At the time of signing the $6-billion bailout package, the IMF had allowed Pakistan to add only Rs39 billion to the circular debt during the July-December period.
Power Minister Omar Ayub had earlier claimed that the flow of circular debt would be reduced to zero by December 2020. The Power Division spokesman said the circular debt build-up would first be reduced and then brought to zero. “Any residue that might be showing up will be handled through recoveries from the stock and tariff adjustments,” he added.
Ruling party Pakistan Tehreek-e-Insaf’s (PTI) government has added around Rs 565 billion to the circular debt of the country so far. For the second consecutive time, the government has missed International Monetary Fund’s (IMF) debt-accumulation reduction target.
According to sources in the Ministry of Finance and the Ministry of Energy, after adjusting power subsidies, the average per month increase in the circular debt during the July-December period of fiscal year 2019-20 was Rs17 billion – higher than the government’s claim of Rs10 billion. “The government paid roughly Rs73 billion in power subsidies in first half of the current fiscal year,” they added.
The government has been making efforts to improve efficiency, but the power sector situation continues to be grim despite putting an additional burden of Rs405 billion on consumers in the past one year by increasing electricity prices. Out of the Rs405 billion, the government recovered Rs195 billion in the first half of the fiscal year, according to the Ministry of Energy officials.
According to the IMF report, in fiscal year 2018-19, the federal government added Rs465 billion to the circular debt. At the time of signing the $6-billion bailout package, the IMF had allowed Pakistan to add only Rs39 billion to the circular debt during the July-December period.
Power Minister Omar Ayub had earlier claimed that the flow of circular debt would be reduced to zero by December 2020. The Power Division spokesman said the circular debt build-up would first be reduced and then brought to zero. “Any residue that might be showing up will be handled through recoveries from the stock and tariff adjustments,” he added.