Current expenditures cross annual budgeted estimation within nine months

ISLAMABAD: Despite revising the revenue targets, conducting austerity drives and not providing funds for provincial elections, the federal government’s current expenditures have crossed the annual budgeted estimation of Rs 8.709 trillion in nine months.

The Fiscal Operations Report (July-March) issued by the Ministry of finance states that the total expenditures of the government has reached close to Rs 10 trillion in nine months.

As per the report, the government has spent Rs 9.244 trillion for the current year against the total estimate of Rs 8.709 trillion.

Out of total government spending, the government has consumed Rs 3,582 billion for only mark-up payments. These payments include Rs 3,108 billion on domestic debt and Rs 474 billion on external debt.

The government has also spent approximately Rs 1000 billion for defense expenditures, Rs 486.696 billion for payments of pension, Rs 396 billion for running of civil government, Rs 432 billion for subsidies and Rs 617 billion for Grants to Others during the first nine months of the current fiscal year.

According to the Fiscal Operations Report, the government has collected Rs 6,938 billion including Rs 5,617 billion tax revenue and Rs 1,320 billion for non-tax revenue of the federal and provincial governments.

The Federal Govt has received Rs 5,155 billion from the collections of the Federal Board of Revenue and provincial governments earned Rs 461 billion  from the tax revenues during the first nine months of the current fiscal year.

The government has received Rs 85 billion through Mark-up (PSEs & Others), Rs52 billion from dividends,  Rs 61 billion from Profit PTA & others, Rs 371 billion from Surplus Profit of State Bank of Pakistan, Rs 14 billion from defense receipts, Rs 25.7 billion from Passport Fee, Rs16 billion from discount retained on Crude Oil, Rs 88 billion from Royalties on Oil/Gas, Rs 19 billion Windfall Levy against Crude Oil,  Rs 11.7 billion from Natural Gas Development Surcharge and Rs 362 billion from Petroleum Levy and Rs 97 billion from other resources during the three quarters.

As per the report, the budget deficit was increased to Rs 3078 billion due to high expenditures and low revenues of the government during the first half of the current fiscal year.

The first nine months’ shortfall in revenue collection reached Rs 278 billion as total collection stood at Rs 5.156 trillion in the first nine months of 2022-23 against the target of Rs 5.433 trillion.

The data shows that the federal government has transferred Rs2.953 trillion to provinces including Rs 1,455 billion to Punjab, Rs727 billion to Sindh, Rs 484 billion to KPK and Rs 286 billion to Baluchistan under the NFC Award  during the first nine months of the current fiscal year.

Meanwhile the current revenue position suggests an even tougher last 3 months before the FY23 closes. The federal government, if it is to stay in the IMF program, might be asked to revise its quarterly revenue targets. Even with the current target, the government is expected to collect almost half of the revenue collected in the first 9 months, in the last 3 months of the year.