ISLAMABAD    -   Pakistan’s budget deficit touched all-time high of Rs3.44 trillion in last fiscal year as the PTI-led government failed to enhance tax collection and reduce expenditures despite announcing two mini budgets and so-called austerity measures.

The country’s expenditures have enhanced to Rs8.345 trillion as compared to the revenues of Rs4.9 trillion during the last fiscal year.

The country’s budget deficit was recorded at 8.9 percent of the gross domestic product (GDP) in the fiscal year 2018-19—the first year of the PTI government in office.

The deficit was only 6.6 percent of the GDP in the preceding year, according to the latest data of ministry of finance. The deficit had widened due to massive shortfall of Rs570 billion in tax collection and whopping increasing in expenditures.

The incumbent PTI government had failed to control soaring budget deficit despite the fact that it introduced two mini budgets and austerity measures.

Initial target of budget deficit was 5.1 percent of the GDP for the year 2018-19. Later, the ministry of finance projected the deficit at around 7.2 percent of the GDP after failing to achieve the tax collection target and increase in expenditures.

However, the budget deficit had swelled by 1.7 percent of the GDP or Rs650 billion higher than earlier projected figure of the Ministry of Finance.

The government had agreed with the International Monetary Fund (IMF) to reduce the budget deficit to 7.2 percent of the GDP (Rs3.15 trillion) in the current fiscal year. Pakistan had agreed with the IMF to bring down the primary deficit to only 0.6% of the GDP or Rs255 billion.

According to the data, the country’s expenditures were recorded at Rs8.345 trillion (21.6 percent of the GDP). The government had spent Rs2.09 trillion on paying domestic and foreign debt servicing.

The break-up of interest payment showed that Rs1.82 trillion were spent on domestic debt and Rs270.3 billion of the foreign debt. The government had allocated Rs1.6 trillion for interest payment for the entire current fiscal year. However, the amount could surge due to the sharp rupee depreciation. Dollar value had touched historic level of above Rs160.

Meanwhile, an amount Rs1.15 billion was spent on defence budget. The government had allocated Rs1.1 trillion for the defence for the current fiscal year. Meanwhile, the government had spent only Rs502.07 billion on federal developments projects in the last financial year.

Meanwhile, the provincial governments had spent Rs506.2 billion on the development projects.

The documents showed that the government spent Rs392.9 billion on pension payments, Rs171.6 billion on public order and safety affairs, Rs97.08 billion on education, Rs16.08 billion on health and Rs12.7 billion on recreation, culture and religion.

Of the total revenues of Rs4.9 trillion, the government collected around Rs363.94 billion as non-tax revenues during the financial year 2018-19. In non-tax revenues, the government had collected Rs35.7 billion as mark-up on public sector entities, Rs60.2 billion as dividend, Rs12.52 billion as profit of State Bank of Pakistan, Rs15.65 billion as defence, Rs23 billion as passport fee and Rs14 billion as discount remained on crude oil, Rs87.9 billion as royalties on gas and oil, Rs7.72 billion as windfall levy against crude oil and Rs62.4 billion through other sources.

The four provincial governments recorded budget surplus of Rs138.9 billion during the last fiscal year, as their expenditures remained at Rs2.86 trillion as compared to the revenues of Rs2.99 trillion. The government had budgeted provinces to give budget surplus of Rs285.6 billion during the previous fiscal year.