Pakistan sought $10 billion loan for government institutions reforms

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Pakistan sought $10 billion loan for government institutions reforms

The Finance Ministry has said that government institutions have incurred a loss of Rs 1,014 billion in the last two years.

A Senate meeting was held under the chairmanship of Sadiq Sanjarani on Friday in which during Question Hour, the Ministry of Finance presented the details of deficits of government institutions in the last two years.

The Ministry of Finance said in a written reply that during the two years, the loss to government institutions was more than Rs 1,014bn, in the financial year 2017-18 the loss was 563.28bn, in 2018/19 Rs 450.84bn of loss was incurred.

Last year, however, the overall deficit of state-owned enterprises fell by 20%.

Presenting the details of the institutions included in the government's privatization list in the House, the Finance Ministry said that 19 institutions are included in the privatization list and the process of privatization of 14 government institutions is underway. These include Balloki Power Plant, Haveli Bahadur Shah Plant, SME Bank, First Women's Bank, Service International Hotel, Roosevelt Hotel, State Life Insurance Corporation, Steel Mills, Heavy Electric Complex, Jinnah Convention, and Oil & Gas organizations.

Giving details of the losses to the national economy from the coronavirus pandemic, the Finance Ministry said that due to Corona, the rate of GDP fell from 2.4pc to negative 0.4pc. The budget deficit also increased by one percent to 8.1pc instead of 7.5pc. Whereas Pakistan's export target also fell and the FBR lost Rs 809 billion in tax revenue.

Presenting the details of the loan taken from international financial institutions under the economic reforms, the Ministry of Finance said that the government borrowed more than $10 billion. From the World Bank, the government has borrowed $4.11bn for 21 government agencies.

The senate was told that $3.66bn was borrowed from the Asian Development Bank (ADB), $1.68bn were borrowed from the Islamic Development Bank and $800 million were borrowed from the Asian Infrastructure Investment Development Bank.

About the IMF loan, the House was informed that the interest rate on the loan taken from the IMF is 4.05pc, the finance ministry said. The IMF loan repayment process will begin in 2024 and continue until 2032. The current government has signed 21 agreements with the World Bank and 22 with the Asian Development Bank.

The government signed 58 agreements with international financial institutions to reform public institutions.