Just two budget heads, namely interest on debt and defence, consumed the colossal chunk of Rs2.2 trillion during first five months of this fiscal year, which was even more than the total net income of the federal government – leading to a severe curtailment of other expenses.
Sources in the Ministry of Finance told The Republic policy that during July-November period of the current fiscal year, there was an alarming increase of 83% in the interest cost on the Rs50 trillion federal government debt stock. The Ministry of Finance paid nearly Rs1.7 trillion in the interest cost, up by Rs763 billion or 83%, according to the sources. Similarly, excluding military pensions and expenses on the armed forces development programme, Rs517 billion was spent on defence in five months. It was Rs112 billion or nearly 28% more than the previous fiscal year, according to the sources.
The cumulative spending on debt servicing and defence remained at Rs2.2 trillion, equivalent to 107% of the federal government’s net income. The net income of the federal government was Rs2.04 trillion, after paying the provinces their shares under the National Finance Commission award.
At this, the Finance Ministry did not make any comment. Despite spending the entire net earnings on just two budget heads, the country is not able to find a solution to the debt trap and security situation which is once again deteriorating rapidly due to flawed policies of the state.
