K-P govt shifts attention to removing debt

Allocates Rs8.6b for debt servicing in order to prematurely retire loans

PESHAWAR: The Khyber-Pakhtunkhwa (K-P) government has allocated Rs8.637 billion for debt servicing in 2015-16 in an effort to prematurely retire federal and foreign exchange loans, according to an official paper.

With heavy debt servicing taking its toll on the provincial budget, the K-P government has decided as part of its debt management strategy to retire expensive loans of the federal government.

The K-P administration has already started repaying the expensive federal loans from financial year 2002-03 and Rs22.374 billion has been repaid prematurely up to financial year 2013-14.

As a result, the provincial government has made savings of Rs5.125 billion per annum from 2002-03 to 2013-14.

The outstanding liability in terms of foreign loans against the K-P government is Rs87.401 billion on the first of July 2015. The outstanding balances of a number of foreign loans are being assessed by the federal and provincial governments as the disbursement of these loans is being made to various project execution agencies.

The outstanding debt liability of the provincial government on account of federal loans is Rs5.103 billion as on July 1, 2015.

Published in The Express Tribune, June 23^rd, 2015.

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