Budget deficit reaches 5.2% of GDP, development spending lowest in a decade

[Naveed Yaseen]

* PSDP spending lowest in a decade

By Sajid Chaudhry

ISLAMABAD: The consolidated budget deficit has reached 5.2 percent of the GDP or Rs 680.407 billion in July-June period of last fiscal year 2008-09.

According to the official figures, budget deficit was financed through borrowing from Rs 530.756 billion from local and Rs 149.651 billion from external sources. Domestic borrowing came in the shape of Rs 305.620 billion bank, Rs 223.846 non-bank borrowing and Rs 1.290 billion as privatisation proceeds.

Size of the Gross Domestic Product (GDP) during the last fiscal year 2008-09 has witnessed a decline and it has reduced from Rs 13,384 billion to Rs 13,095 billion by June 30, 2009, showing a decrease of Rs 289 billion in GDP volume.

Revenues: According to the official figures released by Ministry of Finance, the overall revenues of federal and provinces amounted to Rs 1.850 trillion against the expenditures of 2.531 trillion in the last fiscal year resulting in a deficit of Rs 680.407 billion. Total revenues of the government amounted to 14.1 percent of the projected GDP and total expenditures were 19.3 percent of the GDP.

Taxes from Oil and Gas: The government has realised Rs 112.011 billion from petroleum development levy, Rs 14.015 billion from development surcharge on gas, Rs 25.583 billion from discount retained on crude oil and royalty on oil and gas amounted to Rs 49.187 billion in July-June period, making a total of Rs 200.796 billion.

In the area of revenues, federal and provincial tax revenues amounted to Rs 1.204 trillion that includes Rs 1.158 billion federal tax collection and provincial tax collection was recorded at Rs 46.084 billion. Non-tax revenues were Rs 646.231 billion that include Rs 562.443 billion federal and Rs 83.788 billion provincial non-tax revenues in Jul-June period.

Expenditures: Expenditures of during the said period were recorded at Rs 2.531 trillion including Rs 2.04 trillion non-development, of which Rs 637.790 billion on interest payments and Rs 329.902 billion on defence expenditures. Development expenditures and net lending were estimated at Rs 455.728 billion and un-identified expenditures were Rs 34.011 billion in the said period. Federal government has spent Rs 558.729 billion on domestic debt servicing, Rs 79.061 billion on servicing of foreign debt.

PSDP: Spending from federal and provincial Public Sector Development Programme were lowest in this decade at Rs 397 billion. Provincial development expenditures were estimated at Rs 195.704 billion and other Federal development expenditures were Rs 201.813 billion in July-June period.

Punjab: The provincial revenues of Government of Punjab amounted to Rs 364.377 billion against the expenditures of Rs 383.306 billion in July-June period leaving a deficit of Rs 18.929 billion. Punjab received Rs 256.205 billion as revenue share from federal taxes as NFC Award share. Development expenditures of the province amounted to Rs 106.732 billion and non-development expenditures were Rs 276.524 billion.

NWFP: The total revenues of Government of NWFP stood at Rs 111.933 billion and the total expenditures of the province remained at Rs 103.157 billion, mainly due to less development expenditures of Rs 31.896 billion in the said period. NWFP received Rs 65.561 billion as NFC Award share of the federal taxes from the federal government. Non-development expenditures of the provincial government stood at Rs 71.261 billion and development spending remained at Rs 31.896 billion in said period.

Sindh: The total revenues of the Sindh amounted to Rs 209.959 billion and total expenditures of the province stood at Rs 220.340 billion. The Sindh government received Rs 161.615 billion as NFC Award shares from the federal government during the said period.

Balochistan: The total revenues of the government of Balochistan stood at Rs 64.205 billion and the total expenditures of the province remained at Rs 59.175 billion. The provincial government received a sum of Rs 33.268 billion as NFC Award share from the federal government during the said period.

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