Circular Debt: ‘All dues will be cleared by July’

Published: June 14, 2013
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The payment of the rest of the circular debt owed to the public sector will be cleared by the end of July.  ILLUSTRATION: JAMAL KHURSHID

The payment of the rest of the circular debt owed to the public sector will be cleared by the end of July. ILLUSTRATION: JAMAL KHURSHID

KARACHI: 

Finance Minister Ishaq Dar has said he will arrange for payments to clear the circular debt owed to the private sector involved in power production this month to reduce power cuts by 25%.

Speaking to Express News, the finance minister said on Thursday he will arrange for the payment but will ensure the private power producers start operating their electricity generation plants to full capacity. He added that more steps were being taken to correct the circular debt cycle.

The payment of the rest of the circular debt owed to the public sector will be cleared by the end of July.

Dar said Prime Minister Nawaz Sharif was working on resolving load-shedding and will announce an energy policy soon.

“We need to ensure the investor that his investment is safe and the payments will be made on time,” Dar stated.

When asked how he would arrange the Rs503 billion to tackle the circular debt he has promised, he said Rs40 billion will be saved by cuts in government expenses. He said secret funds have been frozen and abolished and this will also provide some money to help pay the circular debt and assured that even Prime Minister Nawaz Sharif will not use discretionary funds.

Moreover, he claimed Rs180 billion has been saved that will be diverted towards the payment of circular debt.

The finance minister said the tax collection target was being revised from Rs202 billion to Rs407 billion and the figure will be achieved the most by plugging holes in the tax system.

Dar said there was no tax on education, but certainly “we want Rs10,000 from the school for every child that is charged Rs200,000 per year.”

When asked why the salaries of government employees were not increased in the new budget, Dar explained the previous government had given a 20% allowance to employees just before ending its tenure in the hope of gaining support from them in the general elections. However, he chose to increase the pension of old people who were being paid meagre amounts of Rs3,000 per month to Rs5,000 per month.

But he stated a committee will identify salaries of some employees that have not been raised in a long time and increase their pay accordingly.

Published in The Express Tribune, June 14th, 2013.

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Reader Comments (11)

  • Pakistani
    Jun 14, 2013 - 3:40AM

    Govt should take austerity measures to pay debt than tax education….they can save more if they stop spending on renovation parliament lodges of which a glaring example of chaudhry nisar ali khan new interior minister was shown on tv channels where another parliamentarian was in charged with this task to renovate his office….

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  • Rana Umer
    Jun 14, 2013 - 6:15AM

    PML-N budget seems like the bearucratic stuff, dar and his team needs to be very active and concious to improve the grey areas being criticized by business community and the employees community… Should work further to work away the ambiguity…Recommend

  • Tahir Ali
    Jun 14, 2013 - 8:17AM

    Dar Sb,
    How many schools charge more than Rs 2,00,000 per year
    This is an eye wash amendment
    Reduce this to Rs 1,00,000 and rationalise the tax withholding to Rs 5,000

    Recommend

  • ArXhaD
    Jun 14, 2013 - 9:57AM

    He said secret funds have been frozen and abolished and this will also provide some money to help pay the circular debt and assured that even Prime Minister Nawaz Sharif will not use discretionary funds.
    Nothing is changed, only Usage is changed. Previously it was Verbal Discretion now it is through Cabinet Division……….. this MAKE OVER will not last for long Dar Sb.

    we are still unable to coup with the high School FEE, now TAX, is there anything left UNTAXED for middle class……….. Funeral also need to be Taxed since people gather in large numbers and Govt can earn Revenue to continue its Govt for 5 Years.
    PLZ TAKE PITY on POOR.

    Recommend

  • ezanius
    Jun 14, 2013 - 10:22AM

    I must say this budget is for the poor. They will raise money by selling hybrid cars, taxing schools and education and by increasing GST. It sounds perfect as poor would start dying after all this.

    Recommend

  • Faraz
    Jun 14, 2013 - 11:11AM

    All those criticizing should submit their own shadow budget which should be capable enough to compete the actual budget.

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  • riz
    Jun 14, 2013 - 2:35PM

    criticism is only politics and it is from losers.

    Recommend

  • jibran
    Jun 14, 2013 - 5:44PM

    Precisely what Mubashir Lucman has been saying all along. The load shedding crisis is a fabricated one. The likes of Mian Mansha orchestrated it with the blessings of their political masters. Now is the payback time.

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  • unbelievable
    Jun 14, 2013 - 7:03PM

    “We need to ensure the investor that
    his investment is safe and the
    payments will be made on time,”

    Sounds great – don’t think the Reko Diq investors will believe it.

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  • riz
    Jun 14, 2013 - 7:21PM

    @jibran:
    who is Mubashir Lucman and his back ground? everybody knows…..

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  • Ali
    Jun 14, 2013 - 8:12PM

    Say hello to MORE inflation.

    Recommend

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