Islamabad (TDI): The Finance Ministry on Sunday laid out a comprehensive strategy to handle a debt burden exceeding Rs71 trillion. Under this plan, the government wants to increase its payback rate and lessen dependency on external borrowing.
To relieve the present debt load, the government will look for concessional outside funding. Projects sponsored by foreign loans will be accelerated to guarantee they are completed on schedule and yield higher returns.
Simultaneously, the government intends to increase national savings programs to encourage home savings and lower reliance on foreign debt.
By issuing bonds like Panda bonds, Eurobonds, and Sukuk, the government will enter foreign markets to generate home revenue. The strategy also calls for actions to boost the home debt market and draw both domestic and foreign investors.
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In the coming years, the government will support the growth of a non-bank sector, including pension funds, insurance firms, and asset managers.
Structural reforms will be introduced to widen the tax base and make tax collection more efficient. The focus will be on reducing fiscal deficits, which will improve economic stability and lessen the need for more borrowing. A Shariah-compliant debt market will also be promoted.
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The government will also extend the timeline for paying both domestic and external debts to improve debt repayments.
The government also aims to develop a medium-term debt strategy to ensure sustainable debt management.
The Ministry of Finance believes this plan will bring economic stability, reduce reliance on external debt, and support long-term growth.
