Budget deficit rises to 2.3% of GDP in H1 FY2024 despite provincial surplus

The budget deficit for the first half of the current fiscal year has risen to 2.3% of the GDP or Rs 2,407.768 billion, according to data released by the Finance Division on Monday.

Despite a provincial surplus of over Rs 289 billion, total expenditures amounted to Rs 9,261.764 billion, while total revenues stood at Rs 6,853.996 billion, resulting in a deficit.

The deficit of Rs 2,407.768 billion was financed through external borrowing of Rs 608.381 billion and domestic borrowing of Rs 1,799.387 billion.

This domestic borrowing included non-bank borrowing of Rs 251.611 billion and bank borrowing of Rs 2,050.998 billion.

The primary balance during this period was 1.7% of the GDP, amounting to Rs 1,812.211 billion.

Current expenditures of Rs 8,564.632 billion included markup payments of Rs 4,219.979 billion (domestic Rs 3,717.821 billion and foreign Rs 502.158 billion).

Defence Affairs and Services expenditures were Rs 757.602 billion, pension Rs 404.422 billion, running of civil government Rs 302.443 billion, subsidies Rs 375.262 billion, and grants to others Rs 469.488 billion.

Development expenditure under the Public Sector Development Programme (PSDP) for July-December 2023-24 was Rs 673.216 billion, comprising federal Rs 130.408 billion and provincial Rs 542.808 billion.

Net lending to the Public Sector Enterprises (PSEs) was negative at Rs 12,002 billion, and a statistical discrepancy of Rs 35.918 billion was noted.

Total revenue mobilization was Rs 6,853.996 billion, with tax revenue at Rs 4,834.306 billion and non-tax revenue at Rs 2,019.690 billion.

Federal Board of Revenue (FBR) tax contributed Rs 4,469.241 billion, and the provincial share in tax collection was Rs 365.065 billion.

Direct taxes in tax revenue were Rs 2,148.891 billion, and indirect taxes were Rs 2,320.350 billion. Indirect taxes included Customs duties collection of Rs 540.504 billion, sales tax Rs 1,515.266 billion, and federal excise of Rs 264.580 billion.

Provincial share in tax included sales tax on services Rs 230.025 billion, excise duty Rs 5.952 billion, stamp duties Rs 30.346 billion, motor vehicles tax Rs 16.017 billion, and others Rs 82.725 billion.

Non-tax revenue of Rs 2,019.690 billion included the federal share of Rs 1,940.520 billion and provincial Rs 79.170 billion. Federal non-tax revenue included mark-up of Public Sector Enterprises (PSEs and others) Rs 202.625 billion, dividends Rs 50.465 billion, profit of PTA and others Rs 3.734 billion, surplus profit of SBP Rs 972.183 billion, defence receipts Rs 14.235 billion, passport fee Rs 25.739 billion, discount retained on crude oil Rs 13.184 billion, royalties on oil and gas Rs 87.464 billion, windfall levy against crude oil Rs 13.724 billion, petroleum levy on LPG Rs 1.736 billion, GIDC Cess Rs 1.099 billion, Natural Gas Development Surcharge Rs 4.504 billion, petroleum levy 472.772 billion, others, Rs 77.056 billion, and provincial non-tax collection was Rs 79.170 billion.

The data also revealed that out of the gross revenue receipts of Rs 6,448,362 billion, provinces received transfers of Rs 2,435,349 billion during the first six months of the ongoing fiscal year.