Punjab govt clears Rs675b debt linked to wheat procurement

Provincial government hails it as ‘historic step’ to free up resources for public welfare

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ISLAMABAD:

The Punjab government said on Saturday it had cleared its long-standing bank debt of Rs675 billion after more than three decades, calling it a “historic step” that will free up resources for public welfare.

According to officials, the debt was largely linked to wheat procurement and subsidy programmes. Its repayment ends daily interest payments of Rs250 million and marks the closure of the province’s chapter on domestic bank borrowing.

Chief Minister Maryam Nawaz, Chief Secretary Zahid Zaman and Finance Secretary Mujahid Sherdil were credited with leading the repayment effort, which the government said will strengthen the provincial economy and save billions annually in interest costs.

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The final instalment of Rs13.8 billion was paid to the National Bank of Pakistan, while the government rejected all bank requests to roll over the loans. Officials said that without timely repayment, the province would have faced monthly interest costs of Rs500 million.

“With the repayment of Rs675 billion, a new example of financial self-reliance has been set,” the provincial government said in a statement. It added that the move had brought “historic improvement” to Punjab’s finances, with the annual savings on interest now available for development spending.

“The debt repayment will enhance Punjab’s financial stability. The chapter on bank loans is closed — now resources will be spent on public welfare,” the statement said.