May 17, 2023 (MLN): Pakistan’s circular debt has surged to an alarming level of Rs 1.7 trillion, marking a significant increase of Rs500 billion over the course of just one year, according to sources.
The circular debt was estimated to be around Rs1.2 trillion at the beginning of the year and since December 2022, the circular debt has jumped by
In order to control the Ginnie of circular debt, the government has increased the power tariff substantially but failed miserably.
Recently, the energy minister Engineer Khurram Dastgir Khan told the National Assembly that circular debt flow is linked with recoveries from power distribution companies and payments to independent power producers (IPPs) among others and therefore it fluctuates between positive and negative figures.
The surge in circular debt is also attributed to the regime of increasing interest rates as the major portion of circular debt is IPPs receivables. If the interest rate is hiked, the circular debt kept piling up.
During a National Assembly session last week, the energy minister informed that the government has started outsourcing high-loss feeders.
It is also planning to introduce specific amendments in law to make power theft a cognizable offense, he added.