Pakistan’s public debt shoots up by Rs61.4tr since 2008, Senate told

• Commercial banks lent Rs27,246bn to govt till June 2024.
• Government debt climbed to Rs12.7 trillion in 2013.
• Public debt increased by Rs 9.4 trillion in FY 2021-22.

ISLAMABAD: In about 16 years, Pakistan’s public debt has drastically increased to Rs61.4 trillion, as it was Rs6.1 trillion in 2008 and reached Rs67.5 trillion in 2024, the Ministry of Finance told the Senate on Friday.

Finance Minister Muhammad Aurangzeb shared data with the House during the question hour. The minister told the Senate various factors played the role in accumulation of the debt including a primary deficit of Rs10.2 trillion, interest expenses of Rs32.3 trillion and exchange rate/accounting adjustments.

As per the Ministry of Finance, the total loans of commercial banks till the end of June 2024 was Rs38,531 billion, which is 22.8% of the total loans. Commercial banks had lent Rs27,246 billion to the government sector till June 2024, it said. Whereas, loans to the private sector from commercial banks were Rs8,776 billion, it added.

In June 2008, internal debt was Rs3.3 trillion and external debt was Rs2.9 trillion. In June 2024, internal debt was Rs43.4 trillion and external debt was Rs24.1 trillion. Hence, internal loans soared by Rs40.2 trillion and external loans by 21.3 trillion.

The details shared with the Senate show that loans climbed by Rs10.2 trillion because of primary deficit, by Rs32.3 trillion because of interest expenses and by Rs18.9 trillion due to other things.

In 2008, the government debt was Rs6.1 trillion which in 2013 reached Rs12.7 trillion. In 2013, the debt was Rs14.3 billion, which increased to Rs25 billion in 2018. In 2019, the government debt was Rs32.7 trillion which was Rs49.2 trillion in 2022. 

In 2023, the government debt was Rs62.9 trillion. In March 2024, the national debt was Rs67.5 trillion. The debt surged by Rs7.8 trillion in 2019, Rs9.4 trillion in 2022 and Rs13.6 trillion in 2023. The interest expenditures were Rs2.8 trillion in 2021, Rs3.2 trillion in 2022, Rs5.7 trillion in 2023 and Rs5.5 trillion by March 2024.

The finance ministry told the House in writing that it was not true that the borrowing in the financial year 2023-24 was more than the combined figures of the two years. Public debt increased by Rs 9.4 trillion in FY 2021-22, Rs13.7 trillion in 2022-23, and Rs8.4 trillion in 2023-24.

It is not true that the government spent all the tax revenue on debt repayment, the ministry said. In 2021-22, the Federal Board of Revenue (FBR) tax enhanced by Rs6.1 trillion and interest expenses by Rs3.2 trillion. In 2022-23, the FBR tax increased by Rs 7.2 trillion, interest expenditure multiplied by Rs 5.7 trillion. In 2023-24, FBR tax soared by Rs9.3 trillion and interest expenditure increased by Rs8.3 trillion.

By the end of June 2024, loans of Rs2,139 billion were given to government institutions, which is 5.6% of the total loans.

The finance ministry said that more than 3.5 million taxpayers were registered in 2023. The target is to register 3.7 million taxpayers by 2024-25, 3.9 million taxpayers by 2025/26, 4.1 million taxpayers by 2026-27 and 4.3 million by 2027-28 and up to 4.5 million taxpayers by the year 2028-29.