By Asgher Ali Mubarak
ISLAMABAD: In a strategic move to fulfill International Monetary Fund (IMF) requirements, the Pakistani government has approved the Circular Debt Management Plan for the current fiscal year. The Economic Coordination Committee (ECC) granted preliminary approval, with final confirmation expected from the federal cabinet.
The plan aims to limit the increase in circular debt to Rs36 billion, a significant reduction from the previous fiscal year’s ballooning figure of Rs2,393 billion. The government has proposed measures such as timely electricity tariff increases and targeted subsidies to manage this debt effectively.
The document outlines those previous initiatives successfully curtailed debt growth, with projections indicating that without these measures, the circular debt could rise to Rs1,077 billion this fiscal year. The government underscores the necessity for improved efficiency to resolve ongoing circular debt challenges.
