KARACHI – President Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Friday said the government has borrowed record 11.3 trillion rupees over the last two years which have increased debt to GDP ratio by 87.2 percent.
The debt to GDP ratio was 86.1 percent during 2019 which has been increasing rapidly since then, he said.
Mian Zahid Hussain said that foreign loans have increased by 52 percent from June 2018 to June 2020 which is a matter of concern.
Talking to the business community, the veteran business leader said the increase in the debt can be attributed to IMF directions which resulted in a massive devaluation of rupee from Rs110 a dollar to Rs167.
The devaluation failed to boost exports while it contributed to inflation and poverty as the devaluation of one rupee against dollar increases debt by Rs100 billion.
He noted that currency is always devalued on the directions of IMF but the reforms agreed with the IMF have never been implemented.
These reforms include proper economic and administrative policies, improving tax administration, reducing reliance on indirect taxation, just distribution of wealth, transparency etc.
Mian Zahid Hussain said that indirect taxation erodes buying power of masses resulting in unrest, poverty and reduced demand which also hit the productive sector.
The government earned an additional 43 percent petroleum levy in 2020 as compared to 2019 despite a fall of almost 20 percent in local production and 25 percent reduction in oil imports.
He said that cost of doing business should be reduced and the industrial sector should get uninterrupted electricity and gas for rapid economic development.
