ISLAMABAD – Bearing the fruit of the unprecedented efforts of the incumbentgovernment, the circular debt in the power sector has been reduced by 32%last year to 68% since the PTI government took over.
The government is committed to eliminating the circular debt completely bythe next financial year, say the officials.
Technically, circular debt is the non-payment by the power purchaser forthe generation of electricity. This non-payment can be due to severalreasons. These include inefficiency in distribution companies, distributionlosses, and theft. Actually, the government provides subsidy to theconsumers of electricity. The subsidy that is not performance-based adds tothe circular debt crisis.ENJOYING THE BLOG? CHECK THESE TOO.link
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Low payments by the distribution companies give rise to the low payments tothe generators of the electricity. If electricity generators are underpaidthen they’ll neglect to pay their fuel suppliers and exacerbates thecircular debt.The condition of circular debt in Pakistan:[image: circular_debt]Dealingwith Circular Debt – Business Recorder (2018)
The circular debt which was rising by an amount of 38 billion rupees everymonth is reduced to 26billion rupees. This gruesome amount will furtherdecrease to 8 billion rupees by the end of June 2020 and a consistent planhas been made for timely action and monitoring of debt payments, JahangirTareen previously told.
By the end of the next fiscal year, a regular increase in the circular debtthat continued to rise in the last three decades will be brought to zero,he added.
