Finance Ministry has informed the federal cabinet that budget deficit stood at 3.8 percent of the GDP for the first eight months of the current fiscal year (July-February 2019-2020).
Sources said that Advisor to Prime Minister on Finance Dr Abdul Hafeez Shaikh, while briefing the federal cabinet on medium-term macroeconomic framework told the cabinet that the country's public debt stood at 83 percent of the GDP for the current fiscal year against the 60 percent of the debt-to-GDP limits set in the Fiscal Responsibility and Debt Limitation Act, 2005.
The Finance Ministry has projected the Federal Board of Revenue's (FBR's) revenue collection at Rs 5,179 billion for the current fiscal year. The medium-term spending levels envisage; (i) Rs 2,800 to Rs 3,300 billion interest payments; (ii) Rs 1,250-1,750 billion defense; (iii) Rs 900-1,050 billion running of civil government and pension; (iv) Rs 700-900 billion public-sector development spending (PSDP); (v) Rs 200-300 billion spending for Ehsaas-social safety programme; (vi) Rs 800-1,000 billion for grants; (vii) Rs 250-270 billion for subsidies; (viii) Rs 100-150 billion support to merged districts of the KP as well as Rs 50-80 billion provision for contingencies and disasters, and Rs 70-90 billion for harmonization of pay, and pay and pension increase.
The FBR tax collection is projected at 10.8 percent as percentage of GDP or Rs 5,179 trillion for the current fiscal year, 12.5 percent of the GDP or Rs 6,191 billion in the next fiscal year 2020-2021, 13.1 percent in 2021-2022 and 13.6 percent in fiscal year 2022-23.
The Finance Ministry wants to bring down the budget deficit to three percent by 2022-2023 from projected 7.1 percent for the current fiscal year. The cabinet was informed the sectoral spending priorities are food security and agriculture-locust control, health security coronavirus, higher education, sustainable development goals, tourism development, harmonization of pay and allowances, defense and public security, Ehsaas and social safety net, public sector development program and prime minister's initiatives.
Advisor further told the cabinet that budget strategy paper is a policy document and forms the basis for annual budget statements, under the public finance management section-3, the government would approve macroeconomic and fiscal projections by March 15 with strategic priorities of revenue and spending policies and indicative levels of spending, upon approval, indicative budget ceiling would be issued and would be discussed with the Standing Committee on Finance and Revenue.
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