China allows $1 billion as "budgetary" support to Pakistan ISLAMABAD: China has come in a major way to rescue the ailing Pakistan economy by allowing the utilisation of $1 billion under the Chinaâ€™s Safe Deposits for meeting the budgetary support requirements of Islamabad. At a time when the Chinese tourists are becoming victims of terrorist attacks in Pakistan, Beijing has come a long way for creating substantial fiscal space of Rs99 billion for the PML-N government during the next financial year, starting July 1, 2013. â€œFor the first time, China has allowed the Pakistani government to utilise this money for budgetary support which was basically extended by Beijing for the purpose of only boosting the foreign currency reserves held by the State Bank of Pakistan (SBP),â€ official sources confirmed to The News here on Sunday. It can be termed substantial assistance to Pakistan when the country is facing severe financial crunch. When contacted and inquired whether China had allowed Islamabad to utilise its deposits of $1 billion for budgetary support, Governor State Bank of Pakistan Yaseen Anwar replied, â€œBoth deposits are on the books of Ministry of Finance, so yes they can be used for the budgetary support.â€ To another query that when China had granted permission to this effect, the SBP governor said that this money would not only be used for boosting the foreign reserves but the Ministry of Finance also had the option to take rupee equivalent to that amount. When he was told that the Ministry of Finance had included this amount in the foreign assistance estimates for fiscal year 2013-14, he said it confirmed that the rupee component was being used.According to the plan for 2013-14, the PML-N led government is hoping that it will receive more than double the foreign assistance in the next fiscal year as the total inflows will touch the mark of Rs576 billion against the revised estimates of Rs243 billion for the outgoing fiscal year. The major increase in foreign inflows has been estimated in the wake of two major factors including the revival of programme loans from the World Bank and Asian Development Bank in the aftermath of Islamabadâ€™s decision to go under the scrutiny of the IMF programme and the second factor will be the Chinese assistance to the budgetary support to the tune of Rs100 billion. Earlier, sources mentioned that the PML-N led government had inserted a substantial increase in shape of receiving capital receipts in the budget documents for 2013-14 as inflows under the heading of others went up from Rs30.418 billion in the outgoing fiscal year to Rs192 billion in the fiscal year 2013-14.Such an unprecedented increase in inflows resulted in raising eyebrows of many concerned officials as some officials also hinted at the possibility of Saudi assistance as a major factor for this whopping increase. When this scribe contacted Finance Minister Ishaq Dar and inquired about the reasons for the sharp increase in inflows, the minister said that the government did not hide anything and every detail in this connection was available in the budget documents.However, the budget documents for 2013-14 clearly illustrate under the foreign assistance that Chinaâ€™s Safe Deposits would be standing at Rs99 billion in 2013-14 compared to zero amount in the outgoing fiscal year 2012-13. The government also expects to generate Rs49 billion through the rollover of $500 million from the Islamic Development Bank (IDB) and another $500 million (Rs49 billion) through Eurobond in 2013-14.