Debt servicing, defence consume Rs2,700 bn in nine months

ISLAMABAD: The debt servicing and defence of the country have consumed Rs2.7 trillion in just nine months of current fiscal 2019-20, as the government has spent an amount of Rs1.879 trillion (4.3pc of GDP) in the head of debt servicing of internal and external loans and Rs802.436 billion (1.8pc of GDP) on defence expenditure during July-March period of fiscal year 2019-20.

However, the total expenditure during the first 9 months of current fiscal stood at Rs6.393 trillion out of which current expenditure remained at Rs5.6 trillion with development expenditure at Rs781.4 billion, reveals the latest summary of Consolidated Federal and Provincial Budgetary Operations, 2019-20 uploaded on the official website of Finance Ministry.

The summary also shows that the government has so far miserably failed to fetch any penny through privatisation proceeds against target of Rs150 mentioned in the budget for 2019-20.

Of the amount of Rs1.879 trillion that is consumed on debt servicing, the main spending of Rs1.646 trillion stood for servicing of domestic debt whereas Rs234.078 billion consumed on servicing of foreign debt.

However, the total revenue of the country remained at 4.7 trillion with tax revenue at Rs3.594 trillion showing the budget deficit at 1.686 trillion during the period July-March 201-2020. The government has arranged the financial resources to bridge the deficit by borrowing of 1.686 trillion that include Rs682.362 billion financing from external resources and Rs1.004 trillion from domestic borrowing.

The sizeable amount of Rs1.932 trillion has been diverted to the four provinces from federal revenue. Out of the said amount, Punjab has been so far provided Rs922.198 billion, Sindh Rs476.022 billion, KPK 312.968 billion and Balochistan Rs220.426 billion.

The summary also unfolds that out of tax revenue of Rs3.594 trillion, the federal tax revenue stood at Rs3.273 trillion during July-March period with provincial tax revenue of Rs321.219 billion. And the government has managed to mop up revenue of Rs1.096 trillion through non-tax measures out of which it collected Rs1.016 trillion through federal non-tax revenue measures and Rs79.616 billion through provincial non-tax revenue steps. The government has collected Rs1.146 trillion through direct taxes and through property tax Rs9.425 billion.

However, the government has mopped up Rs1.431 trillion through taxes in goods and services. The excise tax fetched Rs188.590 billion in first 9 months of current financial year whereas sales tax helped collect Rs1.242 trillion. And the revenue of Rs474.100 billion has been managed through taxes on international trade. The amount of Rs170.448 billion has been arranged through sales tax on services, Rs51.701 billion through stamp duty, Rs16.734 billion through motor vehicle tax, Rs6.233 billion through gas infrastructure development cess, Rs7.920 billion through gas development surcharge, Rs198.340 billion through petroleum levy and Rs82.414 billion through other taxes.

It may be mentioned here that the Centre has been facing shortage of funds to meet its expenditure since passage of 18th Constitutional Amendment. A heated debate is going on in the power corridors as to how the Centre can meet its growing liabilities under the present circumstances. With the merger of erstwhile Fata into the settled areas, the responsibilities of the federal government have increased.

Earlier, there was a proposal that provinces’ share in the National Finance Commission be curtailed in favour of Centre so that it can fulfil its liabilities.