The addition of Rs6.5 trillion to the domestic debt that stood at Rs17 trillion before the PTI government took over is quite alarming since the rise in the cost of debt servicing is directly proportional to it. As a large part of the government revenue is consumed by domestic debt servicing, very little is left to meet the crucial expenditures at home, such as national defence and social security programmes. The situation seems to be a red flag.
It is unfortunate that the successive governments in Pakistan have pursued the comfort of living in an enormous domestic debt trap at the expense of 220 million people. Even though the fiscal responsibility law exists, it is ironic that no government has been on trial for breaching that law. However, what is needed in these testing times — as Covid-19 poses threats and challenges to our volatile economy — is that the government balances the fiscal account books by keeping three important considerations in mind.
Firstly, it cannot compromise the national defence owing to Pakistan’s volatile backyard which poses constant security threats. Secondly, the government needs to roll out high-sounding development and social security programmes. And thirdly, it cannot ignore at any cost day-to-day expenditures, which means allocating resources for state ministers, advisers, assistants and the large bureaucracy that serves as an engine for the government.
Hadia Mukhtar
Karachi
Published in The Express Tribune, July 16th, 2020.
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