ISLAMABAD - The government has successfully controlled Pakistan’s budget deficit which was recorded at Rs994.7 billion during first half (July to December) of the current fiscal year despite massive shortfall in tax collection.
The country’s expenditures were recorded at Rs4226.6 billion as compared to the revenues of Rs3231.9 billion in July-December period of the ongoing financial year. The budget deficit was recorded at Rs994.7 billion (2.3 percent of the GDP), according to the latest data of ministry of finance. The government had controlled the budget deficit due to non-tax collection, which offset the shortfall in tax collection. The government had recently jacked up the budget deficit target to 7.5 percent of the GDP (Rs3282.5 billion). Earlier, in budget for 2019-2020, the government had projected the budget deficit at 7.2 percent of the GDP (Rs3151.2 billion). The government has apparently upward revise the budget deficit target after downward revising the tax collection target to Rs5238 billion from budgetary target of Rs5550 billion.
According to the latest data, the country’s expenditures were recorded at Rs4226.6 trillion (9.6 percent of the GDP). The government had spent Rs1281.2 billion on paying domestic and foreign debt servicing. The break-up of interest payment showed that Rs1120.7 billion was spent on domestic debt and Rs160.5 billion of the foreign debt. The government had allocated Rs2.9 trillion for interest payment for the entire current fiscal year. Meanwhile, an amount Rs529.5 billion was spent on defence budget. The government had allocated Rs1.152 trillion for the defence for the current fiscal year. Meanwhile, the government had spent only Rs237.5 billion on federal developments projects in the first half of the present financial year. Meanwhile, the provincial governments had spent Rs219.4 billion on the development projects.
The documents showed that the government spent Rs218.9 billion on pension payments, Rs72.01 billion on public order and safety affairs, Rs31.8 billion on education, Rs5.1 billion on health and Rs4.3 billion on recreation, culture and religion.
Of the total revenues of Rs3231.9 trillion, the government collected around Rs766.7 billion as non-tax revenues during the first half of the FY2020. In non-tax revenues, the government had collected Rs27.44 billion as mark-up on public sector entities, Rs26.02 billion as dividend, Rs426.5 billion as profit of State Bank of Pakistan, Rs112.1 billion as profit of Pakistan Telecommunication Authority (PTA), Rs6.5 billion as defence, Rs11.4 billion as passport fee and Rs7.2 billion as discount remained on crude oil, Rs43.8 billion as royalties on gas and oil, Rs3.3 billion as windfall levy against crude oil and Rs100.6 billion through other sources.
The Federal Board of Revenue (FBR) had faced a massive tax collection shortfall of Rs274 billion in first six months (July to December) of the current financial year. The FBR had targeted a total collection of Rs2367 billion for the first six of this year. However, the FBR collected Rs2093 billion during the period under review. The shortfall in tax collection is increasing with the passage of every month. Official said that tax collection shortfall would be met through additional revenue from non-tax sources. The non-tax collection would increase by Rs400 billion to Rs1.6 trillion in the current fiscal year from budgeted Rs1.2 trillion.
The four provincial governments recorded budget surplus of Rs323.7 billion during July to December period of FY2020, as their expenditures remained at Rs1359.7 billion as compared to the revenues of Rs1683.4 billion. The government had budgeted provinces to give budget surplus of Rs423 billion during current fiscal year.