Fiscal deficit for Jul-Mar reaches 3.7pc of GDP

Despite a provincial surplus of Rs 456 billion, the government ended the first nine months of the current fiscal year (July-March 2023) with a budget deficit of 3.7 percent of GDP, or Rs 3.078 trillion.

According to the Finance Ministry’s consolidated fiscal operation, overall income amounted at Rs 6.938 billion, with tax revenue standing at Rs 5.617 trillion. Federal taxes brought in Rs 5.155 trillion, while provincial taxes brought in Rs 461 billion. Non-tax revenue totaled Rs 1.320 trillion, with the federal government contributing Rs 1.214 trillion and the province contributing Rs 105 billion.

Total expenditure was Rs 10.016 trillion, with the current expenditure of Rs 9.244 trillion, of which mark-up payments were Rs 3.582 trillion and defence expenditure was Rs 1 trillion, while pensions were Rs 486.696 billion, civil government operations were Rs 396.080 billion, subsidies were Rs 524.432 billion, and grants to others were Rs 617.503 billion.

MoF lists factors causing fiscal deficit crisis

Development expenditure and net financing totaled Rs 1.060 trillion, with federal PSDP totaling Rs 292.937 billion (excluding development grants to provinces) and provincial PSDP totaling Rs 721.048 billion.

The overall budget deficit was Rs 3.078 trillion, with a positive primary balance of Rs 503.774 billion.

Domestic borrowing of Rs 3.761 trillion was used to finance the budget deficit, while external net borrowing was negative Rs 682.809 billion. The government has borrowed Rs 1.958 trillion from banks to finance fiscal deficit borrowing, in addition to Rs 1.802 trillion from non-bank sources.

Federal tax in tax revenue of Rs 5.155 billion included direct taxes of Rs 2.308 trillion, taxes on international trade (Customs) of Rs 701.152 billion, sales tax of Rs 1.901 trillion, and federal excise Rs 244.771 billion and provincial taxes of Rs 461.833 billion included sales tax on services Rs 287.980 billion, excise duty Rs 7.335 billion, stamp duties Rs 47.475 billion, motor vehicles tax Rs 24.873 billion and others Rs 94.170 billion.

Nontax revenue of Rs 1.214 bln included mark-up (PSEs & others) Rs 85.235 billion, dividend Rs 52.348 bln, profit PTA & others Rs 61.458 billion, surplus profit of State Bank of Pakistan Rs 371.186 billion, Defence receipts Rs 14.25 bln, passport fee Rs 25.679 billion, discount retained on crude oil Rs 16.026 billion, royalties on oil/ gas Rs 88.530 bln, windfall levy against crude oil Rs 19.159 billion, petroleum levy on LPG Rs 2.594 bln, Gas Infrastructure Development Cess Rs 7.303 bln, natural gas Development Surcharge Rs 11.728 bln, petroleum levy Rs 362.480 billion and others 96.750 billion while provincial nontax collection was Rs 105.779 billion. The provincial surplus was Rs 456 billion: Punjab Rs 262 bln, Sindh 144 billion, KP Rs 5.37 billion, and Balochistan Rs 43.406 bln.

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