ISLAMABAD (Eshfak Mughal):- The Federal Government led by Prime Minister Shehbaz Sharif violated another condition of the International Monetary Fund (IMF) by direct borrowing of Rs.93 billion from central bank to meet the government financial needs during the first six months of the current fiscal year.
Source in the Finance Ministry told Voice of Public that the government has reliance on the bank borrowing to fulfill financial requirements during the first half of the current fiscal year. They added that the federal government has borrowed Rs. 704 billion from commercial and State Bank of Pakistan during the first half of the current fiscal year as compared to Rs.269 billion during the same period of the last fiscal year.
The data shows that the reliance of the government was increased on banking sector to meet the financial resource to run the government affairs.
It is pertinent to mention here that the Federal Board of Revenue has missed the target of tax collection of the first half of the current fiscal year by wide margin due to slow down in economy and devastation of flood and monsoon rains.
The FBR has collected Rs.740 billion during the last month (Dec 22) as against the assigned target of Rs965 billion. It has collected Rs3428 billion in the first half of the current fiscal year against the total tax target of Rs7.4 trillion for the current fiscal year.
The sources further told the scribe that the federal government has borrowed Rs.613 billion from the local commercial banks during the first half of the current fiscal year as compared to Rs.298 billion during the same period of the last fiscal year. The data shows that loans from commercial banks were increased by 105 percent during the first half of the current fiscal year as compare to the same period of the last fiscal year.
The Government has obtained loan from the State Bank of Pakistan to meet the financial obligations of the government. It has borrowed Rs.91 billion during the first half of the current fiscal year from the central bank. The government not only avoid from fresh borrowing from the central bank but also retired Rs29 billion during the first half of the last fiscal year.
The data shows that the government committed direct borrowing from the SBP which is violation of the commitment with the International Monetary Fund (IMF) during the first half of the current fiscal year. Through Finance bill 2019-20, the federal government had announced that it will not obtain new loan from SBP via Market Related Treasury Bills.