In Pakistan's power sector, the term circular debt mainly refers to:
Correct answer: A. Accumulated payment arrears across the energy chain
- A. Accumulated payment arrears across the energy chain
- B. Total foreign loans used for power projects
- C. Annual losses of the central bank
- D. Unpaid taxes collected from textile firms
Explanation
Circular debt develops when payment shortfalls move through generators, distributors, fuel suppliers and other participants in the energy chain. It is linked to issues such as tariff differences, delayed subsidies, line losses and weak recovery, not simply foreign borrowing.
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About Economy of Pakistan
Pakistan's economy is examined through agriculture, industry, services, trade, remittances, employment, population, poverty and regional development. The topic also covers GDP and national income, inflation, fiscal and monetary policy, taxation, public debt, the balance of payments, energy constraints and structural challenges, including the role of the State Bank and development planning.
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