Islamabad Chamber of Commerce & Industry (ICCI) has shown great concerns over the rising public debt, which has swelled over Rs 15 trillion by the close of July 2014 and consumes the largest chunk of country’s budget, and called upon the government to take urgent measures to reduce the debt burden as it would affect the economic development, give rise to more unemployment and poverty in the country.
ICCI President Muzzamil Hussain Sabri said that the present government has added more than $12 billion as new debt in just over one year, reflecting a rise of 11.63 percent in one year, which is not a good approach as it would bring more problems for the common man and slow down the growth of economy. He said Pakistan has witnessed about 81 percent increase in debt during the last five to six years, which reflects the bad economic policies of the governments.
He said the rising debt would become a major source of fiscal and current account deficits thus aggravating the financial crisis. He said higher debt-to-GDP ratios would also suppress output, private consumption and government spending on public welfare projects due to which life of common man would become more difficult while business activities would also suffer.
Sabri said debt could be a useful instrument to promote economic growth and development if utilized properly to enhance the productive capacity of the country by building infrastructure, meeting other development expenditures and providing better credit facility to the private sector.
However, debt in Pakistan was not used rightly due to which instead of benefiting the country, the rising debt has brought more difficulties. Therefore, it is the need of the hour that government should revisit its approach, he added.
The ICCI president said government should reduce its reliance of public debt and take measures to develop better mechanism for encouraging savings, promoting investment, broadening tax net and attracting more remittances, which would help the country to generate required revenue and get rid of rising debt burden.
