KARACHI: The ministry of finance has revised up the fiscal deficit to 4.6 percent for the last fiscal year of 2015/16 as compared to the projected 4.3 percent.
The finance ministry data, released on Wednesday, showed that the higher deficit was due to increase in expenditures against the estimates. The government had projected the fiscal balance at negative 4.3 percent of the GDP. The budget deficit amounted to Rs1,349 billion for the last fiscal year as compared to Rs1,456 billion in 2014/15, 5.3 percent of GDP.
The budget deficit was at Rs1,349 billion for the last fiscal year as compared with the deficit of Rs1,456 billion in 2014/15. The data showed that the expenditures, including current and development, increased to Rs5,796 billion in the fiscal year of 2015/16 as against the estimated Rs4,584 billion.
The current expenditures for the fiscal year amounted to Rs4,494 billion as against the estimates of Rs3,615 billion, showing an additional spending of Rs1,210 billion. On the development side, the government spending also increased to Rs1,314 billion as against the estimated Rs969 billion.
The budget deficit would have been higher than the current level if the total revenue had not increased. The total revenue of the country increased to Rs4,447 billion as against the projected Rs4,312 billion.
The revenue collection of the Federal Board of Revenue (FBR) posted 20 percent growth to Rs3,112 billion in the fiscal 2015/16 as compared to Rs2,811 billion. The government brought down the budget deficit to the current level from eight percent in the fiscal year of 2012/13.
During the last fiscal year, the government bank borrowing decreased 11.77 percent year-on-year to Rs787 billion. The ease in bank borrowing can be attributed to increase in external financing of Rs370 billion as compared to Rs181 billion.
Governor Ashraf Mahmood Wathra at the State Bank of Pakistan, at a recent press conference, said the tax collection helped the country avoid borrowing of around four trillion rupees. The increased revenue collection by the FBR increased the tax to GDP ratio to 10.51 percent as compared to 9.45 percent in the fiscal 2014/15. Total revenue to GDP, including federal and provincial, increased to 15 percent from 14.4 percent. However, on expenditure side the ratio eased to 19.6 percent from 19.7 percent.