ISLAMABAD, June 1: Defence expenditure at Rs175.8 billion in the first nine months (July-March) of the current year is set to surpass its annual target while development expenditure at Rs204 billion is likely to fall short.
According to the official summary of the nine-month budgetary operations, the overall revenue and tax collection have declined in terms of percentage of the GDP while expenditures have increased. It also suggests that the government has already surpassed the annual target for collection of surcharges on oil and gas during the nine months.
The budget deficit during the first nine months of the current fiscal year has amounted to Rs201.4 billion. To meet the deficit, the government borrowed Rs100.417 billion from foreign sources and another Rs101 billion from domestic market. There are no further details of the sources of local and foreign financing.
These figures, although classified as provisional, are verified by the Accountant General of Pakistan Revenue (AGPR), provincial audit departments and the State Bank of Pakistan in consultation with the ministry of finance.
The current year’s target for defence expenditure was set at Rs223.5 billion and development expenditure at Rs272 billion. On the basis of the first three quarters of the year, the defence expenditure at the end of the fiscal year on June 30 is expected to close at around Rs240 billion, by over Rs16 billion higher than the budgeted allocation.
The fiscal deficit, according to government estimates, would be around 4.2 per cent of the GDP against a budgeted target of 3.8 per cent. The budget deficit in the first nine months has stood at 2.13 per cent of the GDP.
Interest payments in the first three quarters of the year have amounted to about Rs169 billion against Rs150 billion of the corresponding period of the last year. As percentage of the GDP, it has, however, declined to 2.26 against last year’s 2.44 per cent.
The figures suggest that the government collected about Rs31.6 billion on account of surcharges on petroleum and gas owing to higher international rates. The government had set a full-year target of about Rs32 billion for these surcharges. This Rs31.6 billion includes Rs15.7 billion collection as gas surcharge and Rs15.9 billion as petroleum development levy, almost exactly the same as targeted in the budget despite government’s claims that it was providing subsidy on oil prices. This collection is in addition to 15 per cent general sales tax that the CBR gets on petroleum products.
The government used to provide details of privatisation proceeds and borrowing from banking and non-banking sources under its commitments with the International Monetary Fund but the three aspects have now been removed from mandatory disclosure of consolidated budgetary operations.
Of the Rs204 billion development expenditure, federal releases amounted to Rs128 billion and provincial releases Rs76 billion (nine months). As such, the development expenditure in nine months was 2.73 per cent of the GDP, which is higher than last year’s 2.2 per cent.
The official figures suggest that the total revenue in nine months has amounted to Rs734.3 billion, 9.84 per cent of the GDP, much lower than last year’s 10.30 per cent of the GDP in the same period.
The collection of tax revenue reached Rs518 billion or 6.94 per cent of the GDP, which too is much lower than last year’s 7.4 per cent of the GDP, although the quantum of tax revenue was Rs455.3 billion last year.
Similarly, the CBR collected Rs485 billion taxes in nine months or 6.50 per cent of the GDP, against last year’s 6.54 per cent. In absolute numbers, the current year’s revenue collection is Rs80 billion higher than last year’s Rs403 billion.
Total expenditure during the period amounted to Rs935.7 billion or 12.53 per cent of the GDP, compared to last year’s Rs766.2 billion or 12.43 per cent of the GDP, showing an increase both in terms of overall size and as share of the GDP.
Similarly, the government booked Rs991.4 billion in the July-March period which is Rs202 billion higher than that of last year’s Rs789.2 billion. Of this, the current expenditure amounted to Rs787.3 billion or 10.55 per cent of the GDP. In the same period last year, current expenditure had stood at Rs647.9 billion or 10.5 per cent of the GDP. So, the current expenditure as well as expenditure book increased both in absolute terms and as share
On the expenditure side, an amount of Rs314.3 billion was spent on general public service, including Rs139.6 billion for domestic debt servicing and Rs29.2 billion for foreign debt servicing.
Superannuation allowances and pension expenditure during the first three quarters amounted to Rs27 billion, while health-related expenditure stood at Rs3.3 billion.
