The Lahore High Court on Tuesday called details of foreign loans obtained by the federal and provincial governments till February 02. The court also asked the attorney general to appear before the court on next hearing.
The court passed these directions in a petition challenging a decision of the previous government changing the meaning of “public debt” in contravention of a Supreme Court’s judgment. Earlier, the petitioner’s counsel Azhar Siddique argued that the apex court had ruled that no such changes could be made without the consent of the federal cabinet.
He said, the then government without the consent of the cabinet changed the meaning of the public debt by modifications in the Fiscal Responsibility and Debt Limitation Act 2005 (FRDL).
He said as per the new formula total debt would be considered to the accumulative deposits other than the public debt of the federal and provincial governments within the banking system.
The counsel pointed out that the new amendments imposed a limit on the federal government budget deficit of four per cent of GDP and there was also a limit to restrict public debt to 60 per cent of the GDP on the general government debt, the counsel added.
He said the most expensive commercial loan was procured by the previous provincial government in Punjab from a bank of China for the orange line metro train project.
He, therefore, asked the court to set aside the amendments in the FDRL Act 2005 and sought details of total external debt from the federal and provincial governments.
This report was first published in Business Recorder on Jan 19, 2022.