The funds raised by the government through Sukuk, an Islamic financing instrument, have crossed Rs. 2 trillion. During 2008-2017, the government raised funds to the tune of Rs. 936 billion through various issues of Government Ijara Sukuk (GIS).
The government has been raising funds through an Islamic instrument rather than conventional and interest-based government bonds, including T-Bills and Pakistan Investment Bonds (PIBs). The shift in policy saves billion to the national exchequer, according to industry experts.
Sukuk is an Islamic instrument of raising funds through which Islamic banks own the assets of the issuer (the government) for an agreed period. Banks provide financing to the issuer and then generate revenues from the state assets. This phenomenon also helps greatly to support the Islamic banking industry in Pakistan.
The government of Pakistan has raised two issues of Rs. 400 billion through Pakistan Stock Exchange (PSX) as Pakistan Energy Sukuk I and II. The issues were intended to meet budgetary needs and promote Islamic banking in Pakistan, according to the Ministry of Finance.
Experts say they can be used to raise funds not only by the government but also by the private sector.