Rs500bn circular debt: No plan to print currency notes, says Dar


ISLAMABAD: Finance Minister Ishaq Dar on Sunday put up yet another spirited defence against attacks from opposition legislators who criticised the proposed budgetary allocations in their cut motions. Responding to queries about the government’s plans to clear circular debt of over Rs500 billion within 60 days, and the ongoing talks with the International Monetary Fund (IMF), Mr Dar told the National Assembly in categorical terms that there was no plan to print currency notes to clear the liability.

Before June 30, he said, the government had to pay Rs360bn to private parties to avoid late payment penalties. All means would be employed to generate the money, through national saving schemes, borrowing from local banks and external loans.

“However, I assure this house that we will not print new currency notes as feared by people sitting on the opposition benches, and the circular debt will be cleared by August 12,” he said.

The minister said whatever agreement the government would reach with the IMF would be shared with the house and put on (the government’s) website. Therefore, no question of behind-the-scenes understanding would arise.

No undue pressure would be accepted from the IMF, Mr Dar said to cheers from the treasury benches.

He described as unfair the criticism from the opposition benches on the issue of General Sales Tax (GST), which the government had proposed to increase by 1 per cent.

He also read out a list of essential items whose prices he said would not be affected by any change in the GST.

Mr Dar said the country’s poor economic indicators had forced the government to raise the GST by 1 per cent.

He asked the legislators to help him deal with the hoarders who were fleecing the people in the name of GST and said that soon after the approval of the budget the government would introduce a proper price control mechanism.

He said the development projects in the final stages of execution would receive funding on a priority basis.

About the salaried class, the minister said the government had agreed to a proposal under which the tax rate for all the people earning Rs2.5 million per year or less would remain unchanged.

Earlier, speaking on their cut motions, members from the opposition benches criticised many budget proposals.