ISLAMABAD – Pakistan’s budget deficit is projected to touch an all-timehigh of Rs. 2.39 trillion during the ongoing fiscal year 2018-19.
It is expected to increase despite the government introducing mini-budgetsand massively slashing the development budget.
According to a report in an English daily, the budget deficit is expectedto widen to Rs. 2.39 trillion in the current financial year, which would beequal to 6.3 percent of the gross domestic product (GDP). This would be thehighest ever deficit recorded thus far, exceeding the previous level of Rs.2.24 trillion.
According to the data, the gross revenue receipts are estimated at Rs. 5.57trillion in the year 2018-19. The breakup of Rs. 5.57 trillion revenueshowed that the Federal Board of Revenue (FBR) would collect Rs. 4.4trillion while other revenues are projected at Rs. 1.15 trillion during theongoing fiscal year. Under the 7th NFC award, the federal government wouldhave to transfer Rs. 2.58 trillion to the four provinces.
The report stated that the net revenue receipts left with the federalgovernment would be Rs. 2.99 trillion after transferring funds toprovinces. The government has planned to further cut the Public SectorDevelopment Programme (PSDP) by Rs. 100 billion during the currentfinancial year.
Moreover, the country’s expenditures are projected at Rs. 5.38 trillion forthe ongoing fiscal year. In expenditures, the current expenditures areestimated at Rs. 4.8 trillion and development budget is at Rs. 575 billionsaid the report.
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The government has also estimated that interest payments would cost Rs.1.95 trillion. Similarly, the defense expenditures are projected at Rs.1.68 trillion including expenditures of defense services, pensions, SPD andspecial packages during the period under review
According to the sources, the Rupee devaluation and a massive gap in taxcollection are resulting in a higher budget deficit. The ministry offinance had revised the interest payment on foreign loans to Rs. 1.95trillion for the year 2018-19.
As for the budget for the current fiscal year, the government had earmarkedRs. 1.62 trillion for interest payments for the current fiscal year.However, the government would have to pay an additional Rs. 330 billion oninterest payment all thanks to Rupee’s depreciation.
