KARACHI – The federal government has borrowed Rs 240 billion from the scheduled banks in order to meet budgetary expenditures from July 2010 to Jan 1, 2011 and escape public criticism.
Total budgetary borrowings of the federal government aggregated to Rs 408 billion, Rs 168 billion from the State Bank of Pakistan and Rs 240 billion from the scheduled banks, Pakistan Today learnt on Tuesday.
The federal government has basically changed the mode of borrowings and switched to the scheduled banks in place of SBP, to get maximum amount of credit for its budgetary support. From July-Dec 2010, the federal government borrowed a massive amount from the State Bank of Pakistan that irked the International Monetary Fund, economic managers of the government and the general public.
The government has now obtained massive credit from the scheduled banks through selling of treasury bills and investment bonds. Borrowing from the scheduled banks is largely through the fortnightly auctioning of the market treasury bills of three, six and 12 months maturities.
The provincial governments’ borrowings for the budgetary support are negative by Rs 76 billion in the current financial year. Balochistan, Khyber-Pakhtoonkhwa, Punjab and Sindh government’s borrowings are negative by Rs 23 billion, Rs 18.50 billion, Rs 14 billion and Rs 20.22 billion respectively.
The private sector’s borrowings from July 2010 to Jan 1, 2011, amounted to Rs 163 billion as against Rs 109 billion during the corresponding period of the previous fiscal. It shows that the private sector has obtained Rs 53 billion more credit from banks in the current financial year. However, credit obtained by the public sector enterprises (PSEs) remained on the lowest side, Rs 15.70 billion in this fiscal as against Rs 93.54 billion obtained by the PSEs during the same period in previous financial year.
