ISLAMABAD - Businessmen in a meeting at Islamabad Chamber of Commerce and Industry (ICCI) showed serious concern over country’s sliding into a serious debt trap as country’s domestic debt and liabilities rose by Rs1.5 trillion, or 20 percent, to Rs8.7 trillion against Rs7.2 trillion last year.

Saeed Ahmed Bhatti, acting president ICCI, said that the massive rise in domestic debt would badly affect the macro and micro policies of the country and stressed that upcoming government would have to devise indigenous strategies to prevent the country from falling into an unmanageable debt trap.

He was of the view that increasing levels of domestic and external debts could not be good for the country and for the welfare of its future generations unless these costly inflows are surpassed by visible benefits.

Saeed Ahmed Bhatti said that meeting the budgetary targets of ongoing fiscal year through continuous borrowing from the SBP and other commercial banks was not a suitable option for sustaining macroeconomic stability in the long-run. Thus, government should regulate its public spending and pursue a sound fiscal policy that could also help in reducing current account deficit, he maintained.

ICCI acting president said that economic managers should devise a safe exit strategy out of this menacing debt trap by broadening the tax base. Moreover, the FBR should device a proper mechanism to use the data available with the National Database Registration Authority (Nadra) and other database to identify potential taxpayers, which would increase the revenues, he maintained. Bhatti said that high fiscal deficit and rapid increase in circular, foreign and domestic debt that have doubled in the last three years, demand strict fiscal measures and reduction in the non-developmental expenditures should be focused in upcoming budget.

He said that Finance Minister made commitment in budget speeches every year for restructuring major Public Sector Enterprises (PSEs), but still no visible plan was in sight to streamline these entities that is another reason of mounting domestic debt. He said that government should stop providing cover to these loss-making PSEs. However, a substantial amount of money should be spent on poor masses by improving education and health infrastructure, he added.

Acting President ICCI proposed that Government must find other sources of revenue for better fiscal management and curtail expenditures in the coming budget instead of cutting down development budget.