The federal government’s budget deficit has increased to Rs. 809 billion mainly due to high debt servicing and low non-tax revenue during the first quarter (July-Sept) of the current fiscal year (FY23).
The Finance Ministry issued the fiscal operation report for the period of July-Sept 2022 on Friday. According to the report, the budget deficit surged by Rs. 371 billion, from Rs. 438.5 billion to Rs. 809 billion, during the first quarter of the current fiscal year as compared to the same period of the last fiscal year.
During the period under review, the federal government borrowed Rs. 30.37 billion from external sources and Rs. 778 billion from domestic sources. Out of total debt, the government has obtained Rs. 487.87 billion from the non-banking sector and Rs. 290.5 billion from the banking sector during the first quarter of FY23.
The government successfully managed and gave a surplus primary budget balance during the period. The government registered Rs. 145 billion primary budget surplus during the first quarter of the current fiscal year.
Total Revenue
The Finance Ministry has reported total revenue of Rs. 2,017 billion, including Rs. 1782 billion in tax revenue and Rs.235 billion as non-tax revenue, during the first quarter of the current fiscal year.
The federal government earned Rs. 1,634 billion through tax revenue and Rs. 202 billion through non-tax revenue during the first quarter of the current fiscal year. The provincial governments have earned Rs. 148 billion through tax revenue and Rs. 32.76 billion through non-tax revenue during the period.
Out of total non-tax revenue, the government has earned Rs. 47.5 billion through petroleum levy, Rs. 28.84 billion through markup (PSEs and others), and Rs. 24.65 billion through dividends.
Total Govt Expenditures
The data shows that despite low spending on Public Sector Development Programme (PSDP), the government running expenditure increased drastically during the period. The total expenditure of the government surged by Rs. 579 billion to Rs. 2,826 billion from Rs. 2,247 billion mainly due to high debt servicing and defence budget expenditure during the first quarter of the current fiscal year as compared to the same period of the last fiscal year.
Current Expenditures
The report shows that the current expenditures increased by Rs. 570 billion, from Rs. 1968 billion to Rs. 2538 billion, during the first quarter of the current fiscal year as compared to the same quarter of the last fiscal year.
The data highlights that the debt servicing increased by Rs. 331 billion to Rs. 954 billion from Rs. 623 billion during the first quarter of the current fiscal year as compared to the same three-month period of the last fiscal year.
It is pertinent to mention here that the federal government has allocated Rs. 4 trillion for the current fiscal year from Rs3.2 trillion during the last fiscal year.
Defence Budget
The defence budget increased at a substantial rate during the first quarter of the current fiscal year.
The data shows that the defence budget increased by Rs. 50 billion, from Rs. 263 billion to Rs. 313 billion, during the first quarter of the current fiscal year as compared to the same period of the last fiscal year.
The government has spent Rs. 171.38 billion for payment of pensions to retired employees, Rs. 102 billion for running the civil government, Rs. 92.7 billion for payment of subsidies, and Rs. 199 billion for other government expenditures.
Surprisingly, the statistical discrepancy was recorded at Rs. 67.63 billion during the first quarter of the current fiscal year which was just Rs. 14 billion during the same period of the last fiscal year.
The federal government has transferred Rs. 880 billion to provinces under NFC Award.
Development expenditures
The total development expenditures were recorded at Rs. 219.25 billion during the first quarter of the current fiscal year. The federal government released only Rs. 67 billion for the federal development budget while provincial governments released Rs. 152 billion during the period.
The development expenditure and net lending were recorded at Rs. 220 billion during the first quarter of the last fiscal year.
