Tuesday, June 01, 2010


Budget deficit shoots up to Rs 625.960bn in July-March

* Revenue amounts to Rs 1.401 trillion, expenditure Rs 2.027 trillion
* Yearly deficit likely to surpass IMF-approved target

By Sajid Chaudhry

ISLAMABAD: Consolidated budget deficit of the federal and provincial governments during the first nine months (July-March) of the ongoing fiscal year 2009-10 has shot up to Rs 625.960 billion, 4.2 percent of the GDP.

Total revenue in the period amounted to Rs 1.401 trillion, while the expenditure was Rs 2.027 trillion, according to the Fiscal Operations Report for the July-March period released by the Ministry of Finance on Monday.

Target: Although the International Monetary Fund (IMF) allowed the country to exceed its yearly budget deficit target of 4.9 percent of the GDP to 5.1 percent, the government expects a deficit figure much higher than that agreed with the IMF.

The federal government had projected to keep the overall budget deficit at 4.9 percent of the GDP, including a budget deficit of 4.5 percent of the GDP for 2009-10, and a 0.3 percent additional deficit due to expenditures on the Internally Displaced Persons.

However, the deficit in the July-March period showed that the country face a much higher deficit figure by June 30.

Total revenue amounted to Rs 1.401 trillion or 9.3 percent of the GDP in the said period. Federal tax revenue contributed Rs 979.188 billion, while the provincial governments contributed with Rs 35. 414 billion.

The Centre generated an additional Rs 68.061 billion through the petroleum levy in the same period.

The government’s non-tax revenue amounted to Rs 378.234 billion, including Rs 348.674 billion from federal non-tax revenue and Rs 38.560 billion from the provincial non-tax revenue.

Non-tax revenues also included Rs 14.850 billion through the development surcharge on gas, Rs 6.408 billion through the discount retained on crude oil and Rs 26.284 billion from royalties on oil and gas.

Expenditure for the period remained Rs 2.023 trillion or 13.5 percent of the GDP, including Rs 1.659 trillion on non-development projects.

Details of non-development expenditure revealed that the government spent Rs 473.516 billion or 3.1 percent of the GDP on debt servicing, and Rs 269.843 billion or 1.8 percent of the GDP on defence expenditure.

Development expenditure and net lending amounted to Rs 364 billion, federal development expenditure was Rs 169.320 billion, provincial development expenditure was Rs 117.175 billion.

The federal government spent Rs 428.511 billion on servicing of domestic debt and Rs 45.005 billion on servicing of external debt.

The financing of the Rs 625.960 billion budget deficit was arranged through local and external borrowing, including Rs 92.646 billion external borrowing and Rs 533.314 billion local borrowing. Local borrowing included Rs 322 billion from non-bank sources and Rs 210.832 billion borrowing from banks.

Courtesy www.dailytimes.com.pk

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