The debt probe
The mentioned figures show that debt servicing accounts for more than 50 per cent of the tax revenue
The head of the commission has been appointed, all members notified, the terms of reference are ready, a timeframe is agreed upon – and the probe is all set for the launch. So in six months from now, we will come to know how and why our public debt ballooned from Rs6,690 billion to Rs30,846 billion in a span of 10 years between 2008 and 2018. In the dock are the PML-N and the PPP – the two parties that ruled the country during the decade in question.
What drives the idea to constitute this debt inquiry commission is an apparently firm belief of the ruling party that the many mega infrastructure and development projects carried out by the two parties during their tenures were meant to fill the personal coffers of their leaders through huge commissions, kickbacks and bribes. And what’s cited as justification of the ruling party’s belief is the affluence that the leaders under question flaunt even while the country continues to struggle with the economy.
The ever-soaring cost of debt servicing – which, in the Budget 2019-20, stands at Rs2.89 trillion as against a revenue target of Rs5.555 trillion in the overall annual expenses of Rs7.04 trillion – is indeed a cause for concern. The mentioned figures show that debt servicing accounts for more than 50 per cent of the tax revenue targeted in case of the budget for the coming fiscal year, besides constituting approximately 40 per cent of the total outlay. This well illustrates the difficulties in piecing together the annual budget.
While all that does justify the need to investigate the causes behind the soaring public debt, the government must make sure that the whole process is carried out in an independent and impartial manner. To mention as a postscript note, the incumbent government had itself added something like Rs3,000 billion to the public debt till March this year i.e. during its first seven months in office at a rate twice as much as in the tenures of their two predecessors.
Published in The Express Tribune, June 24th, 2019.
What drives the idea to constitute this debt inquiry commission is an apparently firm belief of the ruling party that the many mega infrastructure and development projects carried out by the two parties during their tenures were meant to fill the personal coffers of their leaders through huge commissions, kickbacks and bribes. And what’s cited as justification of the ruling party’s belief is the affluence that the leaders under question flaunt even while the country continues to struggle with the economy.
The ever-soaring cost of debt servicing – which, in the Budget 2019-20, stands at Rs2.89 trillion as against a revenue target of Rs5.555 trillion in the overall annual expenses of Rs7.04 trillion – is indeed a cause for concern. The mentioned figures show that debt servicing accounts for more than 50 per cent of the tax revenue targeted in case of the budget for the coming fiscal year, besides constituting approximately 40 per cent of the total outlay. This well illustrates the difficulties in piecing together the annual budget.
While all that does justify the need to investigate the causes behind the soaring public debt, the government must make sure that the whole process is carried out in an independent and impartial manner. To mention as a postscript note, the incumbent government had itself added something like Rs3,000 billion to the public debt till March this year i.e. during its first seven months in office at a rate twice as much as in the tenures of their two predecessors.
Published in The Express Tribune, June 24th, 2019.