Tuesday, June 28, 2022

Power minister denies circular debt rising by Rs21bn per month

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ISLAMABAD: Federal Minister for Power Omar Ayub Khan on Sunday rejected a report that the country’s circular debt is rising by Rs21 billion per month.

” The gross circular debt buildup for Q 1 [first quarter of fiscal year] was Rs 77 bn. This number was before subsidy payment (TDS) in the budget. So of this 77 bn , Rs 39 bn is paid by the budget leaving only 38 bn as net addition to Circular debt which translates to about 12 bn a month,” he clarified in a series of tweets.

He said: “The news item only quotes the month of August prior to subsidy.TDS is subsidy to ensure that same tariffs are applied across all electric DISCOs & to provide deeply discounted electricity to the poorest consumers using 300 units and below as well as Agricultural Tube Well subsidy.”

Mr Khan quoted the news report as saying that Asian Development Bank (ADB) acknowledges drastic reduction in circular debt. “We are delighted that ADB has verified governments claims,” he added.

Earlier, on Nov 23, newly appointed Minister for Planning and Development Asad Umar had termed circular debt a major challenge for the incumbent government.    

Addressing a press conference in Karachi, Asad Umar had said that the country’s external debts were hindering economic growth. He said that the economy will strengthen by paying off loans.

He said that China Pakistan Economic Corridor project was not a burden on the economy and noted that CPEC related debt out of 18 billion dollars is 4.9 billion dollars. He said CPEC loan is 7 percent of the total external debt.

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