Government should continue its efforts to maintain financial discipline instead of hefty borrowing from the State Bank of Pakistan (SBP).

Our country could reap the benefits of economic growth, investment, exchange rate stability and foreign exchange reserves by controlling non-development expenditures and maintaining financial discipline, Yassar Sakhi Butt, President Islamabad Chamber of Commerce and Industry (ICCI) has stated this in a statement.

ICCI President said that meeting the budgetary targets of ongoing fiscal year through continuous borrowing from the SPB and other commercial banks was not the suitable option for sustaining the macroeconomic stability in the long-run. Thus, Government should regulate its public spending and pursue a sound fiscal policy that could also help in reducing the current account deficit, he maintained.

He was responding to the reports that Government has borrowed Rs.195.22 billion from the SPB for the budgetary support during the seven months of fiscal year 2011-12, adding that Government should initiate comprehensive fiscal reforms and widen the tax base to curtail borrowing from central bank.

ICCI President said that Pakistan was confronted with challenges like huge budget deficit, rising debt-servicing, uncontrollable debt burden, declining investment and rising unemployment. He was of the view that every political party in our present democratic set up should work jointly for improving the country’s economic uplift rather than making huge unnecessary expenditures that rendered heavy dents on our fragile economic system.

Yassar Sakhi Butt urged the Government to spend the borrowed money on capital projects which provide a platform for jobs creation through generation of economic activity. In order to make the public sector spending more effective, public spending policy must have priority for removing infrastructure obstruction, he maintained.