LAHORE - Condemning the government’s plan of allowing provinces to borrow directly from foreign sources under federal sovereign guarantee, the business community has said the proposal is not realistic and finance ministry is trying to conceal its inefficiency through this recommendation.

They suggested the Council of Common Interest (CCI) that instead of allowing provinces to get more loans, it should devise a new debt policy, under which the total loan of Rs 14 trillion be divided among provinces for payment. “The responsibility of retiring debt can be assigned to the provinces as per distribution of NFC Award. In the new NFC Award, chunk for provinces should be enhanced further.” APAT central general secretary Naeem Mir has asked the provincial governments to allocate funds in their budget for debt retiring, and for this purpose, the provinces should launch effective boards of revenue to mitigate the Islamabad’s financial responsibility.

He stated that high fiscal deficit during the last four years was one of the major factors for the increase in public debt. He said that federal government’s loan has crossed the level of 70 per cent of the GDP while all provinces always present deficit budget.   Criticizing the Finance Ministry’s plan to submit this proposal to the CCI for approval, traders’ leader said that provinces have left no fund to pay interest of the loan. Moreover, the provinces have no efficiency to improve tax collection, as the Punjab government’s plan of financial reforms has also failed to enhance revenue generation by improving tax administration and controlling evasion in levy’s collection. He said that due to lack of funds the government has released not a single penny nor for any energy plan. KPK and Balochistan, which are presently hit by violence and foreign intervention, can easily be used against federation by the donors, he warned.