The loss-making Public Sector Enterprises (PSEs) borrowed Rs. 38 billion during the first eight months (July-February) of the current fiscal year 2021-22.
According to a document seen by ProPakistani, the loss-making PSEs have become a white elephant for the national exchequer and have borrowed Rs. 38 billion from local banks during the first eight months of the current fiscal year. According to the data, the PSE’s total debt stock touched Rs. 1.5 trillion.
Pakistan Steel Mills (PSM), Pakistan International Airlines (PIA), Pakistan Railways, Utility Stores Corporation, and other institutions are mounting public debt due to poor governance and lack of modernized business models.
The data also shows that loans of the private sector have increased due to the government’s policy shift for bridging the budget deficit. Under the new approach, the government has increased its reliance on external loans instead of domestic loans.
The document shows that the country’s private sector availed Rs. 786 billion during the first eight months of the current fiscal year, which is three times higher than the same period of the last fiscal year. The private sector had only received Rs. 235 billion loans from banks during eight months of the last fiscal year 2020-21.
According to some analysts, an increase in borrowing of the private sector indicates that the private sector is performing well in terms of productivity and enhancing job creation.
In this regard, the conventional banks provided Rs. 520 billion to the private sector during eight months of the current fiscal year as compared to Rs. 117 billion during the same period of the last fiscal year. The Islamic banking branches have provided Rs. 104 billion as compared to Rs. 49 billion during the same period of the last fiscal year. The Islamic banking branches of conventional banks also disbursed Rs. 162 billion as compared to Rs. 68 billion during the first eight months of the last fiscal year.
