ISLAMABAD: Federal Minister for Finance Asad Umar told the Senate on Friday that Pakistan obtained $70 billion loan during last five years while $49 billion loan was paid back.

He said that the federal government required $9 billion to ‘run the country’ and promised to lay before Parliament a comprehensive plan on the national economy for guidance.

He said there was a need to impose more restrictions on the government; a fiscal budgetary oversight, as the supplementary grants system had reached Rs2 trillion last year, underlining the need for review of the law.

The minister insisted the law must be given more teeth and added a total of Rs2,400 billion loans were obtained from the SBP last year and hence there was no control over domestic borrowing. There is a need to restrict the prime minister, finance minister and the cabinet in this connection,” he said.

During the question hour, the minister said, “the number that we need to borrow, according to the budget, is $9 billion. But we are trying to address the root cause that compels us to borrow these loans. Of course, we know measures, we will take time; maybe even two or three years, to bear fruit”.

The minister contended that a comprehensive plan, taking into account so many factors, including remittances, tax reforms and other steps will be presented before the Parliament in next two to three weeks.

However, he maintained the final number would be determined shortly and made it clear that a decision to go to the International Monetary Fund would be made after a debate in the Parliament. He pointed out that the bulk of loans obtained during the last five years were utilised for balance of payments, as while for the first time, exports came down from the figure, it stood at five years ago and imports continued to increase.

He regretted that while massive loans were taken from foreign donors, much-needed measures were not taken and the traders, businessmen and farmers were not supported to contribute effectively to the national economy.

“In the meantime, whatever gap there is, we are calculating. As soon as our plan gets finalised, which it should within one to two weeks, we will present it before the Parliament, and then we will also seek suggestions from the National Assembly and Senate to improve it further,” he said.

The minister reiterated that the decision to approach the International Monetary Fund (IMF) would be taken after consultations and taking the Parliament into confidence.

PkMAP Senator Usman Kakar regretted that there had been a lot of talk about active financial support from China and Saudi Arabia, being close friends, but it had been given to us in the shape of huge loans.

The minister pointed out that during the last four years, the fiscal responsibility and debt limitation (FRDL) act, 2005 had not been complied with and noted that the law did not restrict a government to obtain loans beyond 60 per cent of GDP.

As a result, he maintained that loans had hit 72.5 per cent of the GDP in June this year. However, it stood at 64.1 per cent of GDP ratio in March 2018.

Asad Umar told the House that the new FBR chairman had been appointed and next week a meeting would be held with the FBR officials to discuss implementation of the reforms strategy. He said currently one million people were filling their tax returns, adding there was room to further enhance the figure to about three million.

The Finance Minister also said that Prime Minister Imran Khan will chair a high level meeting on Monday to discuss issues relating to currency smuggling and money service providers and how to boost remittances. He emphasised, “we have to take definite actions before the next meeting of FATF”.

Asad Umar said the government had decided in principle to launch Diaspora and Sukuk bonds and added some other initiatives would also be taken to improve the flow of remittances to the country, as Prime Minister had special focus on that side.

In a written reply to a question by Senator Agha Shahzaib Durrani, the minister said that home remittances flow from USA and UK had increased by 12.03 percent and 22.45 percent on a year to year basis during the period of July-March (financial year 2018 over 2017).

To another question by Senator Mian Muhammad Ateeq Shaikh, the minister said that total amount of foreign financial assistance loans and grants (disbursed) from country and organisation for flood victims during the last five years was US dollars 446.89 million, comprising dollars 2.50 million grants and dollars 444.39 million loans.

Replying to probing questions, Minister for Planning and Development Makhdoom Khusro Bukhtiar told the House that a comprehensive security blanket had been put in place for the security of CPEC. He said that Special Security Division (SSD) comprising nine battalions (9229 personnel) of Pakistan Army and six wings (4502 personnel) of civil armed force had been raised for the security of Chinese working on CPEC projects across the country.