ISLAMABAD: The country’s budget deficit could go to Rs2.5 trillion (above 7.1 percent of the GDP) during fiscal year mainly due to the massive shortfall in tax collection and provinces’ failure at giving surplus budget, it has learnt.
The Federal Board of Revenue (FBR) has failed to achieve the revised tax collection target of Rs3.935 trillion during FY2018, as tax collection recorded at Rs3840 billion. The federal government had already revised the tax collection target to Rs3.935 trillion for the outgoing fiscal year from the Rs4.013 trillion.
The government has missed the original tax collection target by Rs173 billion. Similarly, the provinces are unable to give surplus budget of Rs347 billion. The officials believed that provinces budget would be in deficit.
The government had already axed the development budget heavily to control its budget. The government had released Rs752.15 billion for the development budget as against the total budgeted allocation of Rs1001 billion. About Rs250 billion has been diverted for deficit financing to the extent of 0.7 percent of the GDP. Despite slashing the development budget, the government has failed to control the budget. Earlier, the Ministry of Finance was optimistic to restrict the budget deficit at 6.5 percent of the GDP during FY2018. Initially, the government had set budget deficit target at Rs1.48 trillion (4.1 percent of the GDP) for the ongoing financial year 2017-18. However, it is projected that budget deficit could go beyond 7 percent of the GDP (above Rs2.45 trillion) during FY2018.
Pakistan’s budget deficit swelled to Rs1.48 trillion during nine months (July to March) of the ongoing fiscal year. The country’s expenditures were recorded at Rs5.13 trillion (14.9 percent of the GDP) as compared to revenues of Rs3.65 trillion (10.6 percent of the GDP), taking the deficit to Rs1.48 trillion (4.3 percent of the GDP), according to the data of Ministry of Finance.
It is worth mentioning here that government has set budget deficit target at Rs1.89 trillion (4.9 percent of the GDP) for the next fiscal year.