First quarter 2011-12: Govt to borrow Rs800 billion
KARACHI: The government will borrow Rs750 billion from the banking system in the first quarter of this fiscal year, while another Rs50 billion will be raised through auction of Pakistan Investment Bonds (PIBs).
The State Bank of Pakistan on Friday issued the detail of borrowing through auctions of treasury bills for the first quarter of 2011-12 (July-September), showing no steps to reduce the government borrowing from the banking system.
The massive government borrowings from the scheduled banks in the outgoing fiscal year had attracted severe criticism from economists, analysts and the State Bank itself.
Six auctions of treasury bills of all three maturities of three-, six- and 12-month will be held in the first quarter of this fiscal year. The government plans to raise the highest amount of Rs280 billion in September.
The government borrows from banks to finance its fiscal deficit as it did in the previous fiscal year but had failed to contain it.
It is believed that in the absence of any strategy for increasing revenue generation and bolstering economic growth, the government’s borrowing trend would not change during this fiscal year that may again breach the fiscal deficit target of 4 per cent of GDP.The government had set 5.5 per cent fiscal deficit target for 2010-11 which was revised up from 4.5 per cent, but analysts believe that even this revised target could not be achieved as the government continued to borrow heavily till last day of the previous fiscal.
Analysts predict that the revenue shortage would persist during the new fiscal year despite the fact that the Federal Board of Revenue had managed to exceed the revised target for 2010-11 by over Rs2 billion. In the new fiscal the FBR aims to collect about Rs2 trillion or 20 per cent higher over the previous year’s collection.
If the economy does not improve revenue generation, the government will not be able to contain the fiscal deficit resultantly the debt cycle continue eating up the required liquidity in the banking system for the private sector.
The government’s borrowing from banks remains unproductive and creates inflationary pressures. The FY12 will see the same tussle between the government and the private sector for borrowing from the banking system while the interest rate may remain on the higher side.
The auction calendar shows that PIBs would be sold in two auctions for Rs50 billion that will make the cumulative borrowing target of the government during the first quarter at Rs800 billion.
No mid-term polls as it's time for local govt elections : Gilani
MULTAN: Prime Minister Syed Yusuf Raza Gilani on Sunday rejected Opposition's call for mid-term polls and said it was time for local government elections in the country.
Talking to newsmen here, he said, "the government has got passed its fourth budget and will request the PML-N leadership to prepare for the next elections as the time for mid-term polls is over."
He said the Opposition was not giving a tough time to the government as the Pakistan People's Party (PPP) had the support of people.
The Prime Minister said Shaheed Benazir Bhutto had given the vision of politics of reconciliation, foreseeing that in future only coalition governments would be formed and that no single party would be in a position to take majority of seats in the Parliament.
He said from day one, he believed in the politics of reconciliation, which brought about benefits as the government succeeded in unanimous passing of 18th and 19th Constitutional Amendments and approval of 7th National Finance Commission (NFC) Award.
Prime Minister Gilani said he was pleased that the Pakistan Muslim League-Nawaz (PML-N) accepted their viewpoint regarding reconciliation politics by stating that it was ready to talk to the MQM (Muttahida Qaumi Movement).
"Without reconciliation, politics can not succeed in the country. We will continue our politics of reconciliation," he added.
To a question, the Prime Minister clarified that the government did not allow use of Pakistan's airbases to the United States for drone attacks.
The previous government had allowed use of airbases for surveillance purposes only, he added.
He said the government had taken up the issue of incursions from Afghans inside Pakistan's territory and Chief of Army Staff General Ashfaq Parvez Kayani and the Foreign Secretary visited Kabul to discuss the issue.
The Pakistan government protested over border violations and took up the matter with the Afghan government at diplomatic level, he said and added, "Our understanding with the Afghan government has improved and we are making them realize the sensitivity of the situation."
To another question, Gilani said the MQM remained an important ally of the PPP and it supported the government on all important national issues, including 18th and 19th Constitutional Amendments and NFC Award.
As member of the Implementation Commission on Constitutional Reforms, Dr Farooq Sattar worked with Senator Raza Rabbani and was present at the meeting in which the Commission gave a report to the Federal Cabinet, he added.
The Prime Minister said Multan would get all facilities being
accorded to a big city.
He said all the political parties were united on the national issues.
He said the government had to face the most difficult challenges and the the restoration of Constitution was not an easy task. "The credit goes to PPP government that it restored the Constitution of Zulfikar Ali Bhutto to its original form", he added.
He said in the past, the PPP never talked of Seraiki province but as more people were raising demand for the new province, therefore President Asif Ali Zardari formed a committee of the party to look into the issue.
He said the PPP never beleived in hollow slogans and would implement this demand of the people.
The Prime Minister said billions of rupees were spent on electrification of villages which resulted in more demand, and thus power shortage in the country.
The government is working on short, medium and long term projects of three to ten years to meet energy demand, he said and added 2000 megawatts had been added to the national grid and 2000 megawatts more would be added to the system.
He said Thar Coal Project, Diamer Bhasha Dam, TAPI and joint gas and electricity projects with Iran were in pipeline to overcome energy shortage.
PML-N invites all political parties to form grand alliance
LONDON: Punjab Chief Minister Shahbaz Sharif said on Sunday that all political parties, including Muttahida Qaumi Movement (MQM), were invited to be a part of a grand opposition alliance, a private TV channel reported. In his interaction with media men at Heathrow Airport, Shahbaz said there was no condition from N-League for MQM or other parties for coming to the negotiating table. Shahbaz said that meeting with Altaf Hussain in London was just a rumor. “I am going to have meetings with British officials about development in education, health and other sectors,” he said. daily times monitor
Brief News:
PML-N invites all political parties to form grand alliance
Pakistan’s attitude towards terror has altered: Rao
Three-day CNG closure schedule issued
Seven killed in Karachi violence
Afghan army fires mortar shells into Pakistan
US shifts Afghan supply routes to Central Asia: report
Mohammed Saleem Mansoori
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