'Reckless' Govt Spending Pushes Pakistan Closer To Default
(MENAFN- IANS) Islamabad, June 8 (IANS) The Pakistan government approved a staggering 66 per cent increase in the discretionary budget for parliamentarians, reaching a record Pak Rs 116 billion for the outgoing fiscal year.
This decision continues the 'reckless' fiscal policy that is pushing Pakistan closer to default, The Express Tribune reported.
It seems the government is neglecting the revival of the International Monetary Fund (IMF) programme. It is spending money in complete breach of the understanding reached with the IMF in February this year, which aimed to restrict the primary deficit to just 0.5 per cent of the GDP.
For the outgoing fiscal year, the federal budget deficit is now projected to be around Rs 6.4 trillion or 8.1 per cent of the Gross Domestic Product (GDP), surpassing the target of Rs 4.5 trillion.
The government had initially allocated Rs 70 billion for parliamentarians' schemes in the current fiscal year, a sum that has proven insufficient due to competing demands for additional funds by the 13 coalition parties, The Express Tribune reported.
This decision comes at a critical time when Pakistan is facing the threat of default and urgently needs to negotiate debt restructuring with domestic banks and international creditors to create some fiscal space.
However, instead of taking a prudent approach, the government is allocating funds to schemes where the chances of misuse are high due to the lack of proper scrutiny, The Express Tribune reported.
The coalition government had previously decided to allocate Rs 500 million to each Member of the National Assembly (MNA), which has now been substantially increased in an attempt to appease the coalition partners.
--IANS
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