Circular debt payment: Ishaq Dar explains the numbers

Finance minister says bonds, expenditure cut and recovered dividends helped in repaying circular debt.


Ferya Ilyas January 01, 2014
Finance Minister Ishaq Dar. PHOTO: AFP

ISLAMABAD: In the face of growing criticism over how the government paid the circular debt, Finance Minister Ishaq Dar on Wednesday explained the breakdown of payments. 

Speaking during a cabinet meeting in Islamabad, Dar said the circular debt amounted to Rs480 billion when he took charge as finance minister.

According to the data provided by him, the government’s source of funding for debt payment was:

• Pakistan Investment Bonds – Rs128 billion

• Expenditure savings – Rs135 billion

• Dividends recovered from Public Sector Enterprises – Rs20 billion

• Cash paid from Federal Consolidated Fund – Rs59 billion

• Recovery of payables to federal government from Public Sector     Enterprises – Rs138 billion

The government was also accused of printing new notes in order to pay off the debt in 45 days - a practise which increases inflation.

Dar said that the details of who received money as a result of circular debt payment can be found on the ministry’s website. “Our government believes in transparency and we have all the information put up online,” he said.

COMMENTS (8)

just_someone | 8 years ago | Reply

As a trained economist (who has a good understanding of government finances and firm accounts), I can tell you some of these claims are total bogus. They obviously printed more notes to pay the circular debt. If so much money was so easily producible, dont you think Zardari would have gotten his claws on it already?

usman786 | 8 years ago | Reply

i know that this time N league will not be doing corruption and Ishaq Dar and Ahsan Iqbal are the only ones who can save them these 5 years eg Rs 100 billion fund for youth is one example. But today I was surprised to hear the explanation given by Kh Asif to Hamid Mir about increase in USD against PKR that former has also increased against Euro and Swiss franc?? An interest free system can be that these loans be given in USD and returned in USD ie a dollar for a dollar. try it. PIB bonds are providing interest to financial institutions. One day we have to return this principal. Now we have again this fund swelling to Rs 450 billion.

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