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Business News
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Pak Govt consumes 91% of annual budget in just nine months
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Posted online: Friday, May 04, 2012 at 3:01:34 PM
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Islamabad, May 4 : In an alarming development, the Pakistan federal government has been found to have consumed 91 per cent of the total annual budget in just nine months, while its revenues could not match the reckless spending, resulting in a budget deficit of Rs 1.38 trillion - the highest ever in the country's history.
A finance ministry official said that bearing in mind the current trend, the annual budget deficit might soar to 8.4 per cent of GDP or Rs 1.8 trillion. When the PPP-led government came into power, the budget deficit was Rs 777 billion or 7.4 per cent of GDP, reports the Express Tribune.
According to the paper, the massive borrowings for budget financing not only fuelled inflation, but also took away money that could otherwise be borrowed by the private sector for business expansion leading to creation of jobs.
According to the budgetary plans, the government spends 70 per cent of its total budget during the first nine months of any fiscal year.
Contrary to uncontrolled spending, against projected gross annual revenues of Rs 2.73 trillion, the government could bag only Rs 1.66 trillion or 60.7 per cent of the annual revenues. Out of that an amount of Rs 762 billion was transferred to provinces as their share in federal taxes, leaving the authorities with only Rs 896 billion.
To bridge the gap between expenses and revenues, the Finance Ministry borrowed Rs 1.3 trillion from the domestic market, Rs 36 billion from foreign lenders and obtained Rs 63 billion from provinces, according to the summary of fiscal operations. It borrowed Rs 681 billion from banks and printed Rs 195 billion worth of new banknotes, the paper stated.
Source-ANI
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