ISLAMABAD: On Wednesday, the Finance Ministry revealed the fiscal position of the country. The summary showed that Pakistan’s fiscal condition had been weakening as the federal budget deficit (the gap between income and expenses) increased by 33 per cent and had reached Rs1.85 trillion during the current fiscal year.
Despite better revenue generation than expected, high expenditures became the primary reason for the increase in the deficit. Provisionally, the deficit for the fiscal period of July-December 2021-22 reached Rs1.85 trillion.
The government took foreign loans of net Rs1.02 trillion to tackle the federal deficit, increasing the external funding by 126pc taken to minimise the deficit. The local sources gave Pakistan Tehreek-i-Insaf (PTI) government an additional Rs826 billion to lower the deficit burden.
According to the stats by the provisional fiscal operations, the government’s plan to increase the revenue generation and use it to restrain the public debt might not be helpful as a major part of taxes is shifted to provincial governments. The federal government expenditures account for 92pc of current expenses, mainly used to pay off loans’ interest.
