ISLAMABAD - The federal government is heavily depending on non-tax revenue and provinces to generate Rs347 billion surplus budget to keep country's budget deficit at below 5.5 percent of the GDP (around Rs2 trillion) during current fiscal year.

The government has recently revised the budget deficit target up to 5.5 percent of the GDP due to expected increase in expenditures ahead of general elections.

However, the officials in ministry of finance informed The Nation that generation of surplus budget from provinces and non-tax collection is unlikely to achieve, which is major concern for the government.

Adviser to PM on Economic Affairs Dr Miftah Ismail last week vowed to restrict budget deficit at 5.2 percent of the GDP.

However, the official said that budget deficit would go to 5.5 percent of the GDP by the end of ongoing financial year.

The government had budgeted provinces to give budget surplus of Rs347 billion during current fiscal year. The government had also estimated non-tax collection target at Rs980 billion. However, the federal government is struggling to achieve these two targets, which would result in higher budget deficit by the end of June this year.

The four provincial governments recorded budget surplus of Rs150.8 billion during July-December of the current fiscal year as their expenditures remained at Rs1213.1 billion as compared to the revenues of Rs1363.8.5 billion, according to the documents of the ministry of finance.

The official said that provinces is unlikely to record surplus budget of Rs200 billion in next six months due to expected increase in their expenditures ahead of elections.

The documents showed that the government has collected around Rs357.8 billion as non-tax revenues during the first half (July to December) of the present fiscal year. The non-tax collection in six months is only 36.5 percent of the annual estimates of Rs980 billion.

The non-tax collection would increase if United States releases pending amount under Coalition Support Fund.

The government had restricted the budget deficit at Rs796.3 billion (2.2 percent of the GDP) during first half (July-December) of the current fiscal year. The country's expenditures were recorded at Rs3181 billion as compared to revenues of Rs2384.7 billion, leaving the deficit to Rs796.3 billion.

The overall budget deficit - gap between expenditures and incomes - has widened to 2.2 percent of Gross Domestic Product (GDP).

However, the budget is feared to go beyond 5 percent of the GDP. The government has once again revised the budget deficit at 5.2 percent of the GDP (Rs1882.2 billion) for the ongoing financial year.

Earlier, the government had revised the target to 5 percent of the GDP from 4.1 percent of the GDP (Rs1.48 trillion), approved by parliament in June last year.

The government has revised the budget deficit due to expected increase in expenditure ahead of general elections.

The International Monetary Fund (IMF) in its recent report said that the deficit may even go higher due to upcoming general elections.  The IMF has projected Pakistan's fiscal deficit at 5.5 percent of GDP this year.