The federal budget deficit shot up to Rs1.4 trillion or 3.1 per cent of gross domestic product (GDP) during the first half of the current fiscal year (H1FY21) as the centre and provinces prepare to meet this week for the National Finance Commission (NFC) meeting.
According to a report by Express Tribune that quoted the Ministry of Finance, the only main head of expenditure that remained out of control during the first six months of FY21 was the debt servicing cost that jumped 15pc to nearly Rs1.5 trillion.
For the current fiscal year, the government has set the federal budget deficit target at Rs3.43 trillion or 7.5pc of GDP.
From July through December, the federal government obtained Rs1.2 trillion in loans – up by one-fifth – to finance the deficit that the federal government largely blames on the higher share of provinces under the NFC.
The maiden meeting of the NFC would be held in the Q-block on Thursday, to be chaired by Finance Minister Dr Abdul Hafeez Shaikh and is likely to be attended by all the provincial finance ministers.
It may be mentioned here that the 7th NFC Award that had been unanimously agreed in 2010 expired in 2015 and is being extended every year by the president due to a lack of consensus on the 8th Award.