ISLAMABAD (Eshfak Mughal) :- The burden of debt servicing on national exchequer likely to swell to Rs4 trillion due to heavy government borrowing and high interest rate during the next fiscal year, sources revealed on Wednesday.
Finance Ministry is giving final touch to the important budget targets to present before parliament on 11 June.
Sources said that the Finance Ministry is estimating the cost of debt servicing on total government debt stock at Rs4 trillion during the next fiscal year including Rs3.5 trillion for domestic debt and Rs0.5 trillion for external debt.
The main reason behind this increase in the cost of debt servicing is heavy borrowing by government to run its affairs from domestic resources and high interest rate during the last couple of months.
It is pertinent to mention here that the govt had set the original target of debt servicing at Rs.3.1 trillion for the current fiscal year.
The government is also proposing Rs800 billion for federal development plan for next fiscal year. How much will be total size of development budget, it will mostly depend on the decision of National Economic Council which has to meet very soon.
The government is also trying to decrease in subsidy for the next fiscal year due to consideration of IMF conditions. The size of government subsidies will also depend on the outcomes of the meeting with IMF.
The sources also said that the Finance Ministry is also considering for jacking up by 5 percent to Rs.1.5 trillion for defense budget for next fiscal year as compared to the current fiscal year.