Government Struggles with Mounting National Debt Crisis

The government of our country has been facing a significant challenge in managing its finances, with a fiscal deficit averaging 7.3% of the economic output over the past five years. This has resulted in a sharp increase in the national debt, which now amounts to a staggering Rs78.9 trillion. Within this total debt, Rs43.4 trillion is attributed to domestic borrowing, while Rs32.9 trillion is owed to external lenders.

Due to the mounting debt burden, the costs associated with servicing this debt are projected to reach Rs7.3 trillion. This figure represents a substantial 58% of the total budgeted expenditure for the current fiscal year.

The escalating national debt poses several challenges for the economy. High debt levels can lead to increased borrowing costs, which in turn can crowd out essential government spending on areas such as healthcare, education, and infrastructure development. Moreover, a large portion of the budget being allocated to debt servicing means less funding is available for critical public services and investment in future growth.

It is crucial for the government to address the growing national debt to ensure long-term economic stability. Implementing measures to reduce the fiscal deficit, enhance revenue generation, and manage debt effectively are essential steps to mitigate the adverse effects of high debt levels. By taking proactive measures, the government can safeguard the economy and create a more sustainable financial future for the country.