Yearly analysis: expenses associated with debt servicing reach new heights in FY 2023
Business
Comparison in terms of years shows debt servicing increasing consecutively
LAHORE (Dunya Investigation Cell) – In the first nine months (July to March) of the ongoing financial year, the total expenses of the federal government were Rs6,978 billion.
Meanwhile, out of these expenses, Rs3,582 billion were spent on loans and interests, or simply 51 per cent of the total amount.
In addition, according to the finance ministry’s documents, total tax of Rs5,155 billion was collected during the nine months (July-March).
Talking specifically about the government’s performance, in the last fiscal year of the PTI, the total expenses of the federal government were Rs9,350 billion and the amount spent on payment of loans and interests was Rs3,182 billion – almost 34 per cent of the total expense.
During the same period, the FBR collected tax of Rs6,142 billion with the total revenue collection of Rs7,328 billion – amount paid on loans and interests represented 52 and 34 per cent of tax collection and revenue generation in fiscal year 2022.
During the fiscal year 2018, the PML-N’s last fiscal year, the total expenses were Rs4,704 billion with total payment on loans and interests to be Rs1,499 billion, making it 34 per cent of the total expenses.
During the same period, the FBR collected a tax of Rs4,065 billion and revenue generation was Rs4,696 billion.
Talking about the PPP’s last fiscal year in 2013, the total expenses were Rs3,441 billion while the payment on loans was Rs990 billion – making 29 per cent of total expenses.
The FBR collected a tax of Rs2,048 billion with the revenue generation to be Rs2775 billion.
With every passing year, the debt servicing to FBR is increasing. In 2008, its percentage was 28 percent, 48 percent in 2013, 37 percent in 2018, 52 percent in 2022 and in the first nine months of the ongoing fiscal year, its percentage has climbed to 69.
Economic experts paint a gloomy outlook of the state of affairs. They say the country would be paying loans of Rs8400 billion in the fiscal year 2024 which would be Rs4450 billion more than the fiscal year 2023.
They also say if the government does not take steps to control the ever increasing ratio of loans, it would become difficult to provide much needed funds for the defence expenditure, development schemes and subsidies.
