ISLAMABAD - The government paid Rs445.4 billion on interest payment in only three months due to the massive borrowing made by the country in last few years.

Interest payment exceeded the expenditures on country’s defence and development. The federal government paid Rs417.6 billion as servicing on domestic debt and Rs27.8 billion on foreign loans during first quarter (July-September) of the current fiscal year 2017-18, according to the official documents of the Ministry of Finance. Debt payment is rapidly increasing every year, as the successive governments took massive loans from the international financial institutions as well as from local banks. Pakistan’s total debt and liabilities stood at Rs25.1 trillion by the end of June 2017, which were equal to 78.1 percent of the GDP. The gross public debt, which is the responsibility of the government directly or indirectly, was Rs21.4 trillion or 68.1 percent of the GDP, according to the State Bank of Pakistan. Debt payment always remained on top in consuming budget among three Ds (debt servicing, defence and development). Interest payment had once again gone beyond than the spending on defence and development during first quarter of the current fiscal year.

The government had spent Rs181.9 billion on defence of the country, which is 19.8 percent of the annual defence budget of Rs920.2 billion. The lowest spending among three Ds was on federal development, which remained at Rs220.5 billion during July-September period of the ongoing financial year.

Pakistan’s budget deficit had reached Rs440.8 billion (1.2 percent of the GDP) during first quarter of the year 2017-18 due to massive expenditures and lower tax collection. The country’s expenditures were recorded at Rs1465.9 billion as compared to revenues of Rs1025.1 billion, taking the deficit to Rs440.8 billion.

The documents showed that the government spent Rs62.6 billion on pension payments, Rs27.9 billion on public order and safety affairs, Rs18.9 billion on education, Rs3.2 billion on health and Rs1.8 billion on recreation, culture and religion.

Of the total revenues of Rs1025.1 billion, the government has collected around Rs113.7 billion as non-tax revenues during the first quarter of the present fiscal year. In non-tax revenues, the government collected Rs643 million as mark-up on public sector entities, Rs383 million as dividend, Rs45 billion as profit of State Bank of Pakistan, Rs2.7 billion as defence, Rs4.2 billion as passport fee and Rs2.1 billion as discount remained on crude oil, Rs13 billion as royalties on gas and oil, Rs378 million as windfall levy against crude oil and Rs40 billion through other sources.

The four provincial governments recorded budget surplus of Rs51.6 billion during July-September of the current fiscal year as their expenditures remained at Rs493 billion as compared to the revenues of Rs544.5 billion.