Pakistan allocates 40% of budget to tackle debt – Times of India

ISLAMABAD: Battling rising inflation and political unrest, Pakistan’s new government on Friday presented a budget of 9.5 trillion rupees ($47 billion), with a provision of more than 40 percent to pay off the country’s massive foreign and domestic debt. has been done.
Prime Minister Shahbaz Sharif has accused his predecessor Imran Khan of the economic woes of Pakistan, which was kicked out of a parliamentary vote of no-confidence in April, and is fueling a national campaign to press for early elections.
However, analysts say the problems stem from decades of poor economic management by governments and military rulers who have failed to avoid endemic corruption and widespread taxation.
In the budget presented by Finance Minister Miftah Ismail on Friday, a provision of Rs 3.95 trillion has been made to repay the country’s huge debt of $ 128 billion.
“Due to the (previous government’s) lack of foresight, the social structure collapsed, economic development stalled, and national integration withered,” he told the National Assembly.
The $6 billion IMF bailout package signed by former Prime Minister Khan in 2019 has never been fully implemented as his government has looked into agreements to cut or eliminate some subsidies and improve revenue and tax collections .
Islamabad has received $3 billion so far, with the program ending later this year.
Officials are seeking an extension of the program until June 2023, as well as the release of the next $1 billion tranche.
Sharif has vowed to restart the dying economy, but analysts say his fragile government has failed to take tough decisions.
The new budget allocated Rs 1.523 trillion to the country’s defense forces, which regularly swallow huge amounts as a result of enduring tensions with neighboring India.
About Rs 800 billion was earmarked for development projects with an aim to achieve five per cent growth in the fiscal year beginning July 1.
For the outgoing financial year, the economic growth rate is estimated to be around six per cent.
“Theoretically this is a contractionary budget aimed at checking rising inflation,” said Rashid Alam, an independent economist.
“But practically it reflects our national priorities which lean towards the security of the state rather than the welfare of the people,” he said.