Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Monday said the government should reduce its expenses and close unnecessary departments and ministries to save the country from bankruptcy.
The government should also close down loss-making entities resulting in losses to the tune of trillions of rupees, he said.
Mian Zahid Hussain said that 5.6% of the current expenditure is being spent on running the government alone, while for every one hundred rupees spent, fifty-two rupees are being spent on debt repayments, which is enough to bankrupt the country.
Talking to the business community, the veteran business leader said that the energy import bill has become a big problem for the government, the solution of which is foreign and private investment in this sector because the government companies have failed to maintain or increase production.
He said that from July to September 2022, the current expenditure of the central government was 1.832 trillion rupees, out of which 954 trillion rupees was spent on the repayment of local and foreign loans.
This situation is weakening the economy and the rupee while the government has no option but to borrow to improve matters and there is no hope of improvement in production, exports, remittances, and investments.
Mian Zahid Hussain said that as resources dwindle, the government will have to take loans at high interest, an example of which is the recent loan of five hundred million dollars from the Asian Infrastructure Investment Bank on five percent interest.
From July to September 2022, fifty-two percent of the amount was spent on debt servicing, seventeen percent was spent on defense expenditure, 9.3 percent was spent on pensions of government employees, 5.6 percent on running the government, five percent on subsidies, and 10 .9% was spent on grants, while during this time not a single rupee was obtained from the sale of failed government institutions.
The government spends Rs 900 billion rupees per year, i.e. four billion dollars to keep failed entities alive artificially.
Similarly, losses of 600 billion rupees per year, i.e. three billion dollars, continue in the electricity sector.
In these circumstances, the resources for development purposes are constantly decreasing, which is causing economic, political, and social problems in the country and if the government does not make fundamental changes in policies, the country will again soon come close to bankruptcy and once again the country will have to be temporarily saved by taking loans.