ISLAMABAD - Pakistan’s budget deficit has narrowed to Rs438.5 billion (0.8 percent of the GDP) during the first quarter (July to September) of the current fiscal year (FY22) mainly due to handsome growth in tax collection. 
The country’s expenditures stood at Rs2.25 trillion as against the revenues of Rs1.81 trillion, leaving budget deficit at Rs438.5 billion or 0.8 percent of the GDP, according to the latest data of ministry of finance. Primary balance, which is the difference between government’s revenue and its non-interest expenditure, was recorded in surplus of Rs184.2 billion (0.3 percent of the gross domestic product). The government has restricted the budget deficit at 0.8 percent of the GDP during July-September period of FY22 as against 1.1 percent of the GDP in corresponding period of the previous year. The budget deficit has narrowed mainly due to the handsome growth in tax collection. The Federal Board of Revenue (FBR) had surpassed the tax collection target. 
The government of Pakistan had set the budget deficit target at Rs3.4 trillion (6.3 percent of the GDP) for the current fiscal year. “The government is following a careful expenditure management strategy to ensure that critical areas are not ignored and that sufficient resources are available for growth-oriented and social security-related programs. These measures will pave the way for better fiscal prospects and sustained economic recovery,” said ministry of finance in its recent monthly report.
Pakistan’s overall expenditures were recorded at Rs2.25 trillion in first quarter of the ongoing fiscal year. Interest payment has once again increased massively, as it cost Rs622.7 billion. The government has paid interest worth of Rs571.1 billion on domestic loans and Rs51.6 billion on foreign loans. In 2021-22, the government would pay Rs3.06 trillion as interest payment. Meanwhile, defence spending has remained at Rs261.7 billion, which is 19 percent of the overall annual defence budget, Rs1370 billion. The spending on development expenditures including federal as well as provincial remained at Rs262.09 billion in July to September period of the year 2021-22. In expenditures, the government has paid Rs110.7 billion as pension payment, Rs89.5 billion on running of civil government expenditures, Rs73.88 billion as subsidy and Rs169.5 billion as grants to others. Of the total revenues of Rs1.81 trillion, the government collected around Rs275.7 trillion as non-tax revenues during the first quarter of the FY2022. In non-tax revenues, the government had collected Rs19.5 billion as mark-up on public sector entities, Rs1.9 billion as dividend, Rs109 billion as surplus profit of the State Bank of Pakistan, Rs30 billion as profit of Pakistan Telecommunication Authority (PTA), Rs2.8 billion as defence, Rs6.11 billion as passport fee and Rs3.58 billion as discount remained on crude oil, Rs21.7 billion as royalties on gas and oil, Rs2.2 billion as windfall levy against crude oil and Rs18.9 billion through other sources.
Tax collection has helped the government in controlling the budget deficit. Federal Board of Revenue (FBR) had collected Rs1397 billion in first quarter of the current fiscal year, exceeding the tax collection target by more than Rs188 billion. The income tax collection during the July-September period stood at Rs484.4 billion. Meanwhile, the sales tax collection jumped to Rs624.4 billion in the three months of FY22. Federal excise duty (FED) collections recorded at Rs70.9 billion. Moreover, Customs collection stood at Rs221.3 billion during the July-September period this year.
The four provincial governments recorded budget surplus of Rs276.9 billion during July to September period of FY2022, as their expenditures remained at Rs800.85 billion as compared to the revenues of Rs1077.77 billion. The government had budgeted provinces to give budget surplus of Rs570 billion during current fiscal year.