ISLAMABAD, Dec 1: Pakistan’s budget deficit has widened to 0.5 per cent of GDP, up by 0.1 per cent, in the first three months (July-September) of the current fiscal year, forcing the government to increase its domestic borrowing by more than 500 per cent to bridge the deficit. The quarterly data released by the finance ministry suggest that the budget deficit reached nearly Rs37.77 billion as compared to Rs24.88 billion in the same period last year.
Total financing to bridge this deficit thus increased to Rs37.69 billion as compared to Rs24.88 billion in the same period last year. Similarly, domestic financing for the purpose reached Rs32.67 billion as compared to Rs5.33 billion last year. External financing, however, declined to Rs5.02 billion against Rs19.55 billion last year.
The most worrying aspect of the quarterly budgetary operation is the significant fall in revenue collection as the share of overall GDP, notwithstanding higher revenue collection in real terms.
Total revenue in the period under review amounted to Rs236.6 billion against Rs202.3 billion last year, but as the share of GDP it dropped to 3.17 per cent as compared to 3.28 per cent of GDP in the same quarter last year.
Similarly, tax revenue as share of GDP declined to 2.21 per cent this year against 2.31 per cent of GDP last year, although tax revenue increased to Rs164.9 billion compared with Rs142.5 billion last year.
Tax collected by the Central Board of Revenue declined to 1.98 per cent of GDP compared with 2.02 per cent in the first quarter last year, although CBR revenue collection increased to Rs147.9 billion against Rs124.7 billion.
The collection of surcharges also declined to 0.09 per cent of GDP compared to 0.13 per cent. The surcharge collection also declined in real terms to Rs6.4 billion compared with Rs8.3 billion last year.
Defence spending increased by 21.4 per cent to Rs55.9 billion compared with Rs46.051 billion in the same period last year. Defence expenditure was, however, more or less on target when seen in the context of annual allocations.
Interest payments amounted to Rs48 billion, about Rs3.4 billion less than the last year’s Rs51.45 billion.
However, Public Sector Development Programme (PSDP) expenditure increased to Rs50.7 billion against Rs32 billion in the same period last year. The PSDP utilization also improved to 0.68 per cent of GDP compared with 0.5 per cent of the same period last year.
Total expenditure in the first three months of the current year increased by 20 per cent to Rs274.3 billion compared with Rs227.2 billion in the same period last year. Total expenditure as percentage of GDP, however, slightly declined to 3.67 per cent against 3.68 per cent last year.
