The power sector circular debt would stay above Rs1.1 trillion by end of fiscal year 2023 against about Rs2.55tr estimated at present. Wikimedia Commons/File
ISLAMABAD: Despite repeated tariff increases, buying out several old independent power plants (IPPs), fuel conversions, tax rationalisations and timely subsidy payments over the next two years, the power sector circular debt would stay above Rs1.1 trillion by end of fiscal year 2023 against about Rs2.55tr estimated at present.
But not doing these ‘surgical actions’ is not an option. Without these measures, the circular debt is projected to reach Rs4.7tr by end of FY2023. With some efficiency improvements in terms of five per cent increase in recovery and less than one per cent in technical losses, the circular debt is projected at Rs4.4tr by 2023, but it would be the “tariff rebasings and quarterly adjustments” that will move the needle down to about Rs3.5tr almost Rs1.1tr in two years.
Two years ago the federal government decided to offer long-term Pakistan Investment Bonds (PIB) on floating rates. It took the decision because banks had started redeeming in bulk fixed-rate PIBs as rising interest rates in the country had made them less attractive.
The offering of PIBs on floating rates turned the tables. Banks and non-bank institutions both started purchasing the bonds in large volumes. Greater sales of these long-term, floating-rate bonds helped the government keep the stock of its short-term domestic debt low and enabled banks to park surplus funds with peace of mind. Interest rates on these bonds were tied to short-term treasury bills rates and banks could decide with greater accuracy whether they should invest in the bonds during a particular time of the year.
CDNS achieves Rs 43 bn from new schemes by April 20
Published On 25 April,2021 08:55 am
Senior official of CDNS said National Savings has paid Rs 126 billion to their customers in 4 months
ISLAMABAD (APP) - Central Directorate of National Savings (CDNS) has received an increased investment of Rs 43 billion by April 20 of this Fiscal Years 2020-21 from the registered Premium Prize Bond of Rs 40,000 and Rs 25000 newly introduced by the institution.
In the last one and a half years, investors have withdrawn Rs 380 billion after the suspension of the said bond, the senior official of CDNS told APP here on Sunday.
He said that new registered Premium Prize Bonds of Rs 40,000 and Rs 25000 were registered by State Bank of Pakistan (SBP) and en-cashed only by the registered financial institution under the SBP.
Daily Times
April 25, 2021
Central Directorate of National Savings (CDNS) has received an increased investment of Rs 43 billion by April 20 of this Fiscal Years 2020-21 from the registered Premium Prize Bond of Rs 40,000 and Rs 25000 newly introduced by the institution.
In the last one and a half years, investors have withdrawn Rs 380 billion after the suspension of the said bond, the senior official of CDNS told APP here on Sunday.
He said that new registered Premium Prize Bonds of Rs 40,000 and Rs 25000 were registered by State Bank of Pakistan (SBP) and en-cashed only by the registered financial institution under the SBP. While replying to another question, he informed, “We paid the encashment of Rs 126 billion by April 20 of this month to the investors against the suspension of prize bonds of Rs 25,000. He said the federal government recently suspended the prize bonds of Rs 25,000 and had given a six-month deadline to investors to en-cash their total savings of Rs 160 billi
Business
April 23, 2021
KARACHI: The government borrowing from the banking sector rose 1.78 percent in more than nine months of this fiscal year mainly due to the financing of the budget deficit.
The government borrowed Rs1.821 trillion from commercial banks during July to April 9 of FY2021, compared with Rs1.789 trillion in the corresponding period of last fiscal year, according to latest figures on monetary aggregates from the State Bank of Pakistan.
The government borrowing from banks remained higher since last fiscal year owing to the huge spending to fight the coronavirus pandemic.
The closure of the central bankâs window for the government borrowing under the International Monetary Fund loan program also led to the rise in borrowing from the banking sector.