ISLAMABAD: The government relied heavily on obtaining loans to bridge the gap between resource generation and expenditure, with the United States of America being the biggest aid giver to Pakistan in the outgoing fiscal year.

A huge amount of Rs971.60 billion in terms of foreign loans was acquired in 2016-17, exceeding the estimate sum of Rs796.78bn set at the beginning of the fiscal year by 22 per cent.

The government has set the target of obtaining foreign loans worth Rs810.74bn for fiscal year 2017-18. This includes Rs374.52bn under the head of ‘Other Loans’. However, no further details were provided in this regard.

In the federal development budget, Rs329.63bn worth of loans have been estimated for various projects. The government will obtain Rs95.57bn worth of foreign loans for various programmes.

The biggest chunk – Rs117.10bn worth of foreign loans – will be obtained by Punjab, followed by Rs37.31bn for Sindh, Rs20.79bn for Khyber Pakhtunkhwa and Rs2.62bn for Balochistan.

The country is also set to receive Rs26.81 billion foreign grants for development projects

Among federal government’s autonomous bodies, the National Highway Authority is estimated to obtain foreign loans worth Rs86.15bn for its development projects, followed by Rs34.98bn for Pepco and Rs17.29bn for Wapda. Other federal bodies are also set to receive foreign loans worth Rs138.43bn.

Pakistan is also set to receive Rs26.81bn foreign grants for various development projects. Wapda and Pepco will receive a grant of Rs13.10bn for next fiscal year. Amongst provinces, Balochistan and Khyber Pakhtunkhwa will receive Rs11.72bn, whereas Punjab and Sindh will not get any foreign grants in 2017-18.

The key loaning agencies and countries for Pakistan include the Asian Development Bank which is set to give a loan of Rs118.83bn in 2017-18, followed by Rs166.98bn from China, Rs164.57bn from the Islamic Development Bank and Rs102.42bn from IDA (World Bank).

The government is also set to obtain foreign loans worth Rs105.50bn from commercial banks and Rs105.50 billion are likely to be raised from Sukuk bonds.

Pakistan is also set to take loans worth Rs4.68bn from Korea, Rs3.60bn from Japan, Rs16.46bn from France and Rs6.39bn from the IBRD-World Bank.

The Pakistan Poverty Alleviation Fund (PPAF) is set to receive Rs1.20bn loan and Rs270 million grants for 2017-18. During the outgoing fiscal year, PPAF got Rs2.46bn in loans and Rs452.25bn in grants.

Key foreign funded projects in Sindh include the Rs2.52bn Sindh Basic Education Project, Rs1.80bn Sindh Municipal Service Delivery funded by the USA, Rs381.32m Sindh Elementary Schools Upgradation Project funded by Japan and Rs37m Sustainable Land Management to Combat Desertification Project.

Major projects in KP include the Rs179.22m Social Health Protection Programme funded by Germany, Rs215.71m KP Immunisation Support Programme and Rs1.19bn Gomal Zam Command Area Development Project worth funded by USA, and Rs772m Rule of Law and Counter Terrorism Projects funded by the European Union.

The key loaning agencies and countries include the ADB which is set to give Rs118.83bn in 2017-18, China Rs166.98bn, Islamic Development Bank Rs164.57bn and IDA Rs102.42bn

Major projects for Balochistan include the Rs105m Sustainable Development Goals (SDGs), Rs106m Sustainable Land Management Project, Rs1.52bn Global Partnership for Education, Rs389m National Immunisation Support Programme and Enhanced Nutrition for Mother and Children Project and Rs420m Governance and Policy Reforms.

Among the projects outside the Public Sector Development Programme, an allocation of Rs15m has been made for the displaced persons of Fata and Rs9.60bn for the Benazir Income Support Programme (BISP).

Wapda will get Rs64m for the Glacier Monitoring Network – a project related to climate change.

During the outgoing fiscal year 2016-17, the government obtained Rs389.13bn from commercial banks, Rs132.60bn from China, and Rs126.32bn from the ADB while Rs105bn were raised through Sukuk bonds. While Pakistan exceeded its target in obtaining loans, the grants fell short of estimates in the outgoing fiscal year — out of Rs21.42bn, the country received Rs12.56bn only.

In 2016-17, Pakistan received the biggest grant of Rs5.53bn from USA, followed by Rs3.43bn from the donor agencies.

Oman gave a grant of Rs1.05bn, followed by the European Union with Rs562m, China with Rs200 million, the UK with Rs179m and Saudi Arabia with Rs50m.

Published in Dawn, May 27th, 2017