ISLAMABAD - Country’s budget deficit touched highest level of over Rs 2 trillion (8.7 percent of the GDP) during the previous financial year 2012-2013 mainly due to lower revenue collection and higher expenditures particularly in power sector.

Sources said that country’s fiscal deficit was recorded at 8.7 percent of the GDP (approximately Rs 2040 billion) during the last fiscal year 2012-2013 against the government’s target of 4.7 percent of the GDP (Rs 1110 billion). The budget deficit had enhanced by Rs 930 billion in just one year. The prime reasons behind higher budget deficit were huge revenue shortfall of Rs 440 billion and higher power subsidy.

The Federal Board of Revenue had miserably failed to achieve the revenue collection target of Rs 2381 billion during the fiscal year ended on June 30 2013, as it achieved Rs 1942 billion leaving shortfall at Rs 440 billion. Similarly, the government had paid Rs 670 billion power subsidy during the previous financial year against the budgetary target of Rs 185 billion. The government had paid Rs 985 billion on interest payment during the previous financial year.

Similarly, other reasons behind higher budget deficit wee non-realisation of fee from the auction of 3G licences amount to Rs 79 billion, due amount of Rs 80 billion from Etisalat for privatisation of PTCL, Rs 50 billion from floating of Eurobond, increase in domestic interest liability due to higher fiscal deficit by around Rs 100 billion, increase in defence expenditure by Rs 30 billion due to increase in pays as a result of announcement by the Cabinet at the time of budget 2012-13 and reduction of anticipated surplus from provinces by Rs 30 billion, Rs 15 billion for providing for the supply of power to agricultural tubewells at a flat rate and increase in subsidy on electricity due to non-increase in electricity tariff.

However, the Pakistan Muslim League Nawaz (PML-N) government has decided to bring budget deficit to 6.3 percent during the ongoing financial year 2013-2014 from 8.7 percent of the previous fiscal year. Later, the budget deficit would be brought to 4 percent till fiscal year 2015-2016.