ISLAMABAD: The debt-ridden government of Pakistan spent Rs 796.3 billion, which is 2.2 per cent of the nation’s GDP, more than it earned during the first six months of the current financial year ending June, according to a report the ministry of finance placed on its website Tuesday.
The government of Prime Minister Shahid Khaqan Abbasi was able to collect taxes worth Rs 2.39 trillion during first six months of the current fiscal year through December compared with its Rs 3.18 trillion spending. The deficit has been financed through raising Rs 384.1 billion from external and Rs 412.2 billion from domestic sources, the ministry data said.
With economists long fearing the crowding out of private sector as the cash-strapped government borrowed much of the finances, Rs 331.8 billion, from the banks. Only Rs 80.4 billion has been raised from non-banking lenders of the government.
What is worrisome is the fact that expenditures worth almost Rs 2.55 trillion were eaten up by non-productive current expenditures such as running of the government. Debt servicing was the second biggest drain on the government’s revenues as Islamabad paid back Rs 751.4 billion to its lenders during the period under review.
With geopolitical tensions rising in the region and beyond, defence expenditures are also moving northward and accumulated to Rs 393.4 billion during six months through December.
With general elections fast approaching, the democratically elected government is trying to complete as many development projects as they can before July when the judicially-embattled rulers of Pakistan Muslim League-Nawaz would be seeking a fresh mandate from the voters. The federal government, according to ministry data, did spend Rs 615.9 billion under the head of Public Sector Development Programme and net lending during the said period.
About Rs 19.9 billion have been shown by the ministry as a statistical discrepancy in its report.