The Ministry of Energy, Power Division, acknowledged during a meeting of Senate Standing Sub-Committee on Planning, Development and Reforms that the circular debt has soared to 750 billion rupees.
The circular debt inherited by the PML-N administration in 2013 was estimated at around 480 billion rupees which the then newly appointed Federal Finance Minister Ishaq Dar claimed he was going to eliminate at one stroke on the instructions of the newly-elected Prime Minister Nawaz Sharif. The timing of the debt retirement was the second-last day of 2012-13 – 29 June – which necessitated Dar requesting the banks to stay open on a Saturday, a bank holiday. The timing of the debt retirement was attributed to political considerations as the acquired debt was procured during the remaining eight months and a week in the tenure of the PPP-led coalition government, the three months of the caretakers and only three weeks of the PML-led coalition government accounting for 8.2 percent unsustainable budget deficit for the entire year. The current circular debt of 750 billion rupees is a whopping 56 percent higher than approximately five years ago and should be a source of serious concern.
Published in Business Recorder, 14th March, 2018