ISLAMABAD – The Economic Coordination Committee (ECC) of the Cabinet, chaired by the Finance Minister, is set to approve Technical Supplementary Grants (TSGs) totaling Rs3.62 trillion on Friday (today). The grants, surrendered by the Finance Division and Economic Affairs Division (EAD), are intended to address the government’s domestic debt repayment obligations for the fiscal year 2024–25, Newzshewz has learnt reliably.
The Finance Division mobilizes resources from both domestic and external sources to meet the Government of Pakistan’s current and development expenditure requirements. Domestic debt is raised through banking and non-banking channels, in the form of Treasury Bills (T-Bills), Pakistan Investment Bonds (PIBS), Government Ijara Sukuk (GIS), and instruments under the National Savings Schemes (NSS) administered by the Central Directorate of National Savings (CDNS). External financing is secured through concessional long-term loans from multilateral and bilateral lenders such as the IMF, World
Bank, Asian Development Bank, China, Kingdom of Saudi Arabia, and Paris Club member countries. Additional external borrowings are also made through foreign commercial banks and international capital markets via issuance of Eurobonds and international Sukuk.
Finance Division has submitted that an amount of Rs. 8,736,398,247,000/- and Rs. 19,050,034,320,000/- was allocated as Budget Estimates for the demands i.e. “Servicing of Domestic Debt” & “Repayment of Domestic Debt” respectively for the financial year 2024- 25.
Now, the revised estimates are projected at Rs. 7,906,732,671,000/- & Rs. 21,653,899,066,000/- for “Servicing of Domestic Debt” & “Repayment of Domestic Debt” respectively. The lower revised estimate for domestic debt servicing is due to decrease in the policy rate. The increase in revised estimate for ‘domestic debt repayment’ is attributable to higher-than-anticipated principal repayments on account of T-Bills maturities, not leading to greater rollover requirements.
Thus, there is an increase of Rs. 2,603,864,746,000/- in respect of demand “Repayment of Domestic Debt” which is to be provided through Technical Supplementary Grant to meet the shortfall.
According to Finance Division, estimated for payment of domestic debts was Rs 19,050,034,320,000 for FY 2024-25 whereas revised estimate was Rs 21,653,899,066,000 but additional requirement of Rs 2,603,864,746,000.
Finance Division is of the view that demands are finalized only at the close of the financial year, given the volatility in the underlying variables impacting debt servicing and repayments. Moreover, actual expenditure figures are finalized and communicated by the relevant agencies such as State Bank of Pakistan (SBP), Accountant General Pakistan Revenues (AGPR), Economic Affairs Division (EAD), and CDNS after 30th June of each financial year.
Being Charged Expenditure under Article 84(a) of the Constitution of the Islamic Republic of Pakistan, approval of the Economic Coordination Committee has been solicited to the following proposals: (i) approval of Technical Supplementary Grant amounting to Rs. 829,665,576,000/- from the surrendered amount from Ministry of Finance demand “Servicing of Domestic Debt (FC24R02)” Domestic Debt” to “repayment and ;(ii) approval of Technical Supplementary Grant amounting to Rs. 1,774,199,170,000/- out of surrendered amount of Rs. 1,842,147,710,310/- from Economic Affair Division’s demand “Foreign Loan Repayments (FLR) (C24R10)” to the Ministry of Finance demand “Repayment of Domestic Debt (FC24R02)”. Ends
