Interest payments -- biggest liability of govt

ISLAMABAD: Interest payments have emerged as the biggest liability of the government which is much higher than the defence and development budget as the government has allocated Rs1,363 billion to pay interest on foreign and domestic loans.

The federal budget 2017-18 is a blatant violation of the Constitution that pledges that Riba (interest) shall be eliminated but the regime protects and promotes this un-Islamic practice. Although Article 38(f) makes this commitment in an unequivocal and unambiguous manner, the PML-N government, like its successive predecessors, not only ignored the constitutional demand, but blatantly violated it by furthering the interest based economic system of the state. This un-Islamic practice of the government also violates the Constitution’s fundamental pledge that no law would be made against Quran and Sunnah and that Islamic laws would remain supreme.

If we have a look at the budget documents, the biggest head in the federal budget 2017-18 is neither defence nor the development budget -- it is the interest payments which is denting the country’s economy as the government has allocated Rs1,363 billion to pay foreign and domestic loans’ interest.

The non-abolition of Riba is causing a big blow on Pakistan’s economy as every year a major chunk of the federal budget is spent on paying the interest of loans which the government has taken from foreign as well as domestic banks. The federal government has allocated Rs1,001 billion for development budget and Rs920 billion for defence purposes. However, the allocation for interest payments is much higher than defence as well as development budget.

The 2017-18 budget, presented by Finance Minister Ishaq Dar, violates the all-important “Principles of Policy” as envisaged in the Constitution by not only offering interest-based billions of rupees loan to country’s youth but also allocating Rs1,363 billion for interest re-payment during the fiscal year.

Contrary to what the governments in Pakistan have been doing without any fear of being questioned by anyone for this blatant violation of the Constitution and Islamic teachings, Article 38(f) clearly pledged: “(38) Promotion of social and economic well-being of the people. The state shall (f) eliminate Riba as early as possible.”

The Riba/interest related parts of the PML-N budget also violate the Preamble of the Constitution, which is also the substantive part of this unanimously authored basic legal framework. The preamble commits that the authority to be exercised by the people of Pakistan through their chosen representatives would remain within the limits prescribed by Almighty Allah. It also promises that the Muslims shall be enabled to order their lives in the individual and collective spheres in accordance with the teachings and requirements of Islam as set out in the Holy Quran and Sunnah.

A similar pledge is made in Article 31 of the Constitution but despite all this the PML-N government like the previous regimes had chosen to violate the Constitution and continue with Riba/interest despite its complete rejection by Quran and Sunnah.  

It is also relevant to mention here that during Nawaz Sharif’s first tenure as prime minister, the Federal Shariat Court had declared Riba/interest as un-Islamic and had sought its elimination from the internal economic systems including local banking. But instead of implementing the FSC’s judgment and fulfilling the constitutional pledge, Nawaz Sharif’s government had challenged the FSC ruling in the Supreme Court.

After a lapse of several years, the SC upheld the FSC’s ruling but General Musharraf made the tamed SC under his rule to review its ruling following which the SC remanded the case back to the FSC, which is sitting on the case for the last almost 13 years.