ISLAMABAD - The government had successfully curtailed the budget deficit at 3.6 percent of the GDP (Rs 1049 billion) during three quarters (July to March) of the outgoing financial year mainly due to provincial government’s surplus budgets and tight cash release policy for development sector.
Pakistan’s expenditures remained at Rs 3731.6 billion (12.8 percent of the GDP) as against the total revenue of Rs 2682.6 billion (9.2 percent of the GDP) leaving deficit at Rs 1049 billion during July to March of the year 2014-15. The government is optimistic to achieve the yearly target of containing budget deficit at 4.9 percent of the GDP by the end of June 2015 following the fiscal discipline in three quarters.
Finance Minister Ishaq Dar on Monday claimed that government would achieve the fiscal deficit target despite facing massive revenue collection shortfall and additional expenditures of operation Zarb-e-Azb and rehabilitation of Internally Displace Persons. This would be the one of the major target of IMF, which Pakistan would meet.
According to the latest data released by the Ministry of Finance, the government spent Rs 974.5 billion on interest payment, Rs 485.9 billion on defence, Rs 580 billion on the development programme including federal and provincial, Rs 47.4 billion on education affairs and services, Rs 7.4 billion on health, Rs 66.42 billion on public orders and safety affairs and Rs 145 billion on superannuation allowances and pensions during first three quarters of the fiscal year 2014-15.
The break-up of overall revenue collection of Rs 2682.6 billion showed that government had collected Rs 2063.1 billion as tax collection and Rs 619.4 billion as non-tax collection during period under review. Under non-tax collection, the government had collected Rs 26.7 billion as foreign grants, Rs 5.1 billion as mark-up of Public Sector Entities and others, Rs 54.8 billion as dividend, Rs 222.5 billion as surplus profit from State Bank of Pakistan, Rs 154.3 billion as defence (coalition support fund), Rs 12 billion as passport fee, Rs 6.7 billion as discount retained on crude oil, Rs 61 billion as royalties on gas and oil, Rs 10.7 billion as windfall levy against crude oil and Rs 65.6 billion from other sources. The Ministry of Finance’s figures further showed that provincial governments had recorded budget surplus of Rs 116.7 billion, as their expenditures recorded at Rs 1361.1 billion as against the revenues of Rs 1244.4 billion during July-March period of FY2015. The four provincial governments had received Rs 1107.6 billion from the federal government under National Finance Commission (NFC) award and they generated only Rs 145.2 billion from taxes. The Punjab government had registered budget surplus of Rs 28.05 billion, as its expenditures remained at Rs 598.7 billion as compared to the revenues of Rs 626.7 billion.
Funds for Neelum-Jhelum
hydropower project
Finance Minister Ishaq Dar on Friday directed the Economic Affairs Division (EAD) to arrange much-needed financing for the Neelum Jhelum hydropower project (NJHP) from various sources including Chinese, local and Islamic Banks in order to complete project on time.
Finance Minister Ishaq Dar said this while chairing a high-level meeting here on Friday morning to review financing arrangements for the Neelum Jhelum hydropower project (NJHP). Khawaja Mohammad Asif, Federal Minister for Water and Power was also present on the occasion. The Finance Minister was briefed about the progress of the project and informed that to-date Rs.136 billion had already been incurred on the project. The Minister was apprised that for future works to be completed, an amount of $575 million worth of foreign funding and local financing of Rs.100 billion was required.
After detailed deliberations, the Finance Minister directed Secretary EAD that possibility of financing from ICBC and Exim Bank of China may be explored. Wapda may arrange financing of Rs. 41 billion out of the total Rs.100 billion financing to be generated locally and negotiations with Islamic Banks may be carried out to seek financing of remaining Rs.59 billion.
The Minister directed the Ministry of Water and Power and Wapda to ensure dedicated efforts for meeting the financial requirements in accordance with measures suggested during the meeting.
It may be mentioned that the Prime Minister in February this year had asked Minister for Finance to resolve financial issues of NJHP and work out requirement of funds till completion. The Minister accordingly directed WAPDA to review and develop all-encompassing PC-I including Duties & Taxes, Exchange Loss, Price Escalation, interest during construction, etc. till completion of the Project. Revised PC-1 would now be submitted to Ministry of Planning and Development for placement before the CDWP/ Ecnec after proper scrutiny.