ISLAMABAD: Amid initiatives to reduce volume and expenditures of the federal government, current expenditures stood at Rs3.54 trillion in the first quarter (July-September), ie, 20.5 percent of Rs 17.203 trillion budgeted for the current fiscal year, violating the 20 percent criteria.
Official data shows that total expenditure rose by about 13 percent to Rs4.13 trillion in the first quarter (Q1) of current fiscal year against Rs3.67 trillion during the same period of last fiscal year. Of this, current expenditure rose by 11 percent to Rs3.54 trillion in Q1 compared to Rs3.17 trillion last year.
The government budgeted Rs9.775 trillion for interest payment for the entire year, a major portion of current expenditure, for the current fiscal year. It spent Rs 1.306 trillion on mark-up payments in Q1, a drop of around 5 percent when compared to Rs1.38 trillion during the same period of last fiscal year, attributable almost entirely to lower policy rate.
1.4pc of GDP: Q1 ends with Rs1.696trn budget balance
Governor State Bank of Pakistan (SBP) informed the Senate Standing Committee on Finance and Revenue that the gradual cut in policy rate - from 22 percent in April to 13 percent on 16 December 2024 - would help reduce debt servicing by around Rs1.5 trillion - from Rs 9.8 trillion to Rs 8.3 trillion and help the government achieve the fiscal deficit target of 6 percent.
The four provincial governments released about Rs1.22 trillion for current expenditures in Q1, higher by 28 percent compared to the same period of last fiscal year.
Punjab spent Rs525.190 billion on current expenditures in Q1, Sindh spent Rs 357.606 billion, Khyber Pakhtunkhwa Rs 234.483 billion and Balochistan Rs 103.065 billion.
Federal Minister for Finance and Revenue Muhammad Aurangzeb stated that the government has decided to abolish 150,000 vacant posts and this will have an impact as it was a budgeted number for this fiscal year, as part of a broader effort to reduce federal expenditure.
The high-powered committee established by Prime Minister on June 21, 2024, for rightsizing is reviewing 43 ministries and 400 attached departments, which currently account for Rs876 billion in annual spending.
Copyright Business Recorder, 2025
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