KARACHI, June 10: Current revenue expenditures of the federal government would not be less than Rs784.7 billion at the end of this fiscal year on June 30 against the original budget estimate of Rs700.8 billion.

Revised estimates for current revenue expenditures during fiscal year July-June 2004-05 provide details of this Rs83.9 billion or 12 per cent rise in the current revenue expenditures over and above the budgetary allocation. These estimates are contained in the budget documents for fiscal year 2005-06 presented earlier this week.

An increase in the current revenue expenditures itself should not be a cause of concern if it means higher spending on social sector projects — but if it means higher spending on the areas that do not directly benefit people, then one needs to examine its justification.

The budget documents reveal that among all the 10 broad categories of current revenue expenses, no significant additional spending was seen in health and education sectors.

The federal government spent Rs3.28 billion on health and Rs12.34 billion on education in the current fiscal year against the budgetary allocations of Rs3.25 and Rs12.21 billion respectively.

On the other hand, the government spent Rs468.9 billion on general public services against the budgeted estimate of Rs423.8 billion. Defence affairs and services received Rs216.2bn against Rs193.9bn; public order and safety affairs Rs17.5bn against Rs15bn and economic affairs Rs62.2bn against Rs48.8bn.

How much the government cares about the public welfare is evident from the fact that its current revenue spending on housing and community amenities totalled only Rs866 million against the target of Rs832 million and spending on recreation, culture and religion totalled Rs2.24bn against the budget estimate of Rs2.2bn.

In the current fiscal year, the government’s spending for providing social protection to people totalled Rs863 million — far higher than the budget estimate of Rs539 million but peanuts in absolute terms. And, its spending on environment protection that can also be termed as spending on the welfare of future generations totalled only Rs136 million — exactly equal to the amount allocated for the purpose.

The above details of a 12 per cent increase in the current revenue expenditures without any significant additional spending on social sectors brings into question the viability of government’s policies. Independent economists say this reinforces the impression that Pakistan is a two-economy country — “there is an economy for the elite and there is an economy for the ordinary people,” to quote Dr Kaiser Bengali, a well-known independent economist and former head of Social Policy & Development Centre.

Commenting on a huge increase in current revenue expenses without social sectors getting more than planned amount of resources, he foresees no remedy even in the next year’s budget. “There is absolutely nothing for the people (in the new budget). There are good provisions to promote growth but nothing for employment or for price control. There is nothing that will reduce public transport cost or help people get houses or better education.”

With an increase of Rs83.9 billion in the current revenue expenses over and above the budgeted estimate for this fiscal year, the overall current and development expenditures have risen to Rs986.7 billion from the original estimate of Rs902.7 billion. (The government expects that development expenses during this fiscal year would total Rs202 billion — exactly the amount budgeted for this purpose).

Against the total expenditures of Rs986.7 billion, available resources are not worth more than Rs842.6 billion. As a result, the government has decided to borrow far more from banks than it had estimated at the time of preparing this year’s budget. The government borrowing from the banking system would now reach Rs80.8 billion at the end of this fiscal year on 30th of this month against the original budgetary target of Rs45.2 billion which was later on revised upwards to Rs60 billion.

Till the end of last month, the federal government had borrowed Rs33 billion from the banking system, data released by the State Bank show. This means that its net additional borrowing during the current month alone would be not less than Rs47.8 billion.