ISLAMABAD  - Prime Minister’s new initiatives scheme of worth Rs 115 billion has been badly hit by the Federal Board of Revenue’s inability to achieve the revenue collection target, as the government decided to shelve the amount following massive revenue shortfall.

“Government will not release funds for Prime Minister’s new initiatives scheme of Rs 115 billion, as tax department has failed to achieve its targets so far. The government had already decided that new initiative schemes will be linked with revenue collection”, said a top official of finance ministry while talking to The Nation. He ruled out the possibility of the imposing new taxes after tax collection shortfall reached over Rs 80 billion.

The government had planned to utilise Rs 115 billion, the block allocation for Prime Minister’s initiatives. The scheme included distribution of laptops among the students of public sector universities securing over 60 percent marks. Similarly, the government had planned to introduce yellow cab scheme at federal level. The government also planned to announce many other schemes under Prime Minister’s new scheme, for which it allocated Rs 115 billion. However, the financial constraints of the country have hit the programme mainly the revenue collection shortfall and the government decided not to release funds for this scheme. The government is struggling to achieve annual tax collection target of Rs 2.47 trillion, as shortfall of revenue collection reached Rs 80 billion in seven months (July-January) of the current financial year. FBR has collected Rs 1201 billion during first seven months (July-January) of the current fiscal year against the target of Rs 1282 billion. 

The PML-N government has set aside Rs 540 billion for meeting the development needs of the country and out of that Rs 425 billion are at the disposal of the Ministry of Planning and Development for the ongoing financial year. An amount of Rs115 billion has been earmarked for new initiatives by the government.

The break-up of federal PSDP worth of Rs540 billion revealed that Rs115 billion have been kept for new development initiatives, Rs110 billion would come from foreign aid and Rs315 billion would be released by Planning Commission of Pakistan.

In order to offset the impact of low collection on the budget deficit, the IMF has also shown current year’s development budget at Rs430 billion as against Parliament’s approved budget of Rs540 billion.

Sources said that government would shelve Rs 115 billion earmarked for the special initiatives of the Prime Minister in order to restrict budget deficit at Rs 1500 billion (5.8 percent of the GDP) as committed with the International Monetary Fund (IMF) during current financial year. The government had successfully controlled the deficit at 2.2 percent of the GDP during first half (July-December) of the current fiscal year, which was 2.5 per cent of the GDP during corresponding period of the previous year.