After being burdened by the debt of domestic banks, the Punjab government has now turned to foreign banks for loans.
According to the 24News HD TV channel, the Punjab government will take a loan of more than 22 trillion rupees from Asian Development Bank (ADB) and the Asian Infrastructure Development Bank (AIDB) to cover the road projects under the Sustainable Development Program (SDP).
With the foreign loans, the Punjab government has made plans to construct some new roads and repair the existing road throughout the province including the New Lahore project.
In order to provide the better road infrastructure to the citizens in Punjab, the provincial government has taken this decision and formed a committee for the agreement and negotiations with the said banks.
As per the details of the loans, the ADB will give a loan of $503 million to the Punjab government on soft terms while Punjab will also receive $394 million from the AIDB.
The Punjab government’s committee will comprise of Secretary Planning and Development (P&D), Secretary Communication and Works (C&W), and Secretary Finance and other officials.
The officials of the Department of Communication informed that with this loan, the Punjab government will provide the best roads to the citizens in the province.
According to the authorities, an agreement will be signed with both banks soon to obtain the loan, in which the repayment of the loan under easy terms will also be reviewed.
It is worth mentioning here that the ADB was the top lending bank in Punjab.
Punjab govt’s external debts soar by Rs109 billion
The 24News HD TV Channel has already reported that the external debts of the Punjab government have snowballed to Rs13.16 trillion after the addition of another Rs109 billion during the current fiscal year.
In June of the last fiscal year 2021-22, the Punjab government’s overall debts were standing at Rs12.07 trillion.
However, the figures have been swollen in the Debt Bulletin Report released by the Punjab Finance Department.
The volume of the circulating debts has been recorded at Rs3.3 billion.
According to the documents, Rs22 billion in interest was paid on loan payments during the current financial year by the Punjab government.
The surging interest rate has multiplied the volume of the Punjab government’s loan repayments in the current fiscal to the tune of Rs92 billion.
According to the Debt Bulletin Report issued by the Finance Department of Punjab, the debt of Punjab has increased by Rs109 billion in just five months.
Since 2018, the debt of Punjab has increased by Rs1,000 billion. In 2018, Punjab owed more than Rs540 billion.
The Punjab government has obtained most of the loans from the World Bank, Asian Development Bank, and Exim Bank of China.
For six development projects, the Punjab government is yet to receive a loan from the World Bank.