Pakistan’s budget deficit has soared to Rs994.7 billion or 2.3 per cent of the Gross Domestic Product (GDP) during the first half of the financial year 2019-2020, revealed the fiscal operation report issued by the Ministry of Finance .
According to the report, the country’s expenditures were recorded at Rs4,226.6 billion or 9 per cent of the GDP, as compared to the revenue of Rs3,231.9 billion during the same period.
In addition to this, the report stated that out of the Rs4,226.6 billion, the government spent Rs1,281.2 billion on domestic and foreign debt servicing (Rs1,120.7 billion on domestic debt and Rs160.5 billion on foreign debt).
The government spent Rs529.5 billion on defence expenses out of the Rs1.152 trillion allocated for the sector in the current fiscal year. Meanwhile, the government spent only Rs237.5 billion on federal development projects whereas the provincial governments spent Rs219.4 billion on the same.
The report revealed that 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 revenue of Rs3,231.9 billion, the government collected Rs766.7 billion as non-tax revenue. Out of the Rs766.7 billion, Rs27.44 billion were collected as mark-up on public sector entities, Rs26.02 billion as dividend, Rs426.5 billion as profit of the State Bank of Pakistan (SBP), Rs112.1 billion as profit of the Pakistan Telecommunication Authority (PTA), Rs6.5 billion from defence sources, Rs11.4 billion from passport fee, Rs7.2 billion as discounts 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) faced a major tax collection shortfall of Rs274 billion in the first six months of the current financial year. The bureau collected Rs2,093 against the target of Rs2,367 billion for the first half of FY20. The shortfall continues to increase with passing time whereas non-tax collection is expected to increase by Rs400 billion to Rs1.6 trillion in the current fiscal year.
