Is it necessary to take out an external loan?
Abdul Rehman Warraich said that it has been the policy of the governments in the country to cover their budget deficits by borrowing from internal and external sources. He said that this included loans from international institutions as well as loans from local banks. He said that this strategy has been adopted by different governments.
Abdul Rehman Warraich said that developing countries like Pakistan have to take loans and borrowing is not a bad thing but it is important to know how this loan is spent.
"If this debt is being spent on boosting the productive sector and boosting the economy, then this is a very good policy," he said. "Debt is a double-edged sword. You can use it to your advantage and disadvantage. Can It's up to you how you use it.
In this regard, Qaiser Bengali said that if the country increases its income and builds assets by taking external loans, then there is no problem in taking such loans as we saw in Pakistan in the sixties and seventies. Etc.
However, the policy under which loans have been taken since the 1990s are 'loan programs' that when I borrow from abroad to cover the budget deficit, it has a very negative impact on the economy and the country And the country is trapped in debt.
How can debt dependence be reduced?
On what can be done to get rid of the external debt imposed on the country, Abdul Rehman Warraich said that it is most important to increase the income of the country, which can only be done by getting maximum taxes. Is. "The reason for our problems is not the increase in revenue," he said.
"If the country collects more taxes, the government will not have to borrow money from abroad for the budget deficit."
Qaiser Bengali ruled out the possibility that the country's current income could be increased to reduce its dependence on foreign loans. According to him, the country's economy is shrinking and there is not enough life to pay more taxes. He said that at present the country has to adopt a policy in which non-development expenditure has to be reduced.
He said that these non-development expenditures would have to be reduced in both civil and military sectors. For example, at the federal level, 40 divisions will have to be reduced to 20, and after the 18th amendment, the practice of retaining departments at the federal level under a new name will have to be abolished.
He says similarly, non-combat spending in the defense sector needs to be reduced. He said that doing these two things alone would save the country one trillion rupees in its annual expenditure which would reduce the country's dependence on external debt.
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