Economy still struggling

Within three months and ten days of this fiscal year (between July 1 and November 10), the federal government borrowed more than Rs3.244 trillion from commercial banks. In the comparable period of the last fiscal year, the then federal government’s borrowings from banks totalled just Rs827 billion or one-fourth of where these borrowings stand today. What is more disturbing is the fact that this quadrupling of the government’s borrowings from banks has occurred even though tax revenue generation in July-October exceeded the target of Rs2.68tr. Our fiscal sector is obviously under immense pressure. In the last fiscal year ending in June, the federal government’s borrowings from banks stood at Rs3.72tr, up from Rs3.45tr a year earlier. Government borrowings from banks continue to soar despite enough tax collection primarily because of the ever-increasing cost of domestic and external debt servicing and large spending on pay and pensions of the government employees amidst no major savings on account of the day-to-day expenses of running the government.