ISLAMABAD: Country’s total fiscal deficit in the first nine months of the current fiscal year (July 2011-March 2012) surged to Rs1.286 trillion, about 66 per cent higher than the budgetary limit of Rs849 billion, according to data released by the ministry of finance.
The ministry said the country’s fiscal deficit in first nine months of the current year stood at 4.3 per cent of gross domestic product (GDP), surpassing full year 4 per cent limit set in budget last year.
But this 4.3 per cent deficit did not include a “one-off” payment of Rs391 billion on account of debt consolidation that took the fiscal deficit in nine months to Rs1286 billion (6.1 per cent of GDP) excluding power sector subsides against an annual budgeted target of Rs849 billion.
The annual deficit limit was, however, revised to 4.7 per cent in the aftermath of floods in Sindh.
According to latest fiscal data released by the ministry of finance on Wednesday, the most disappointing factor has been a reduction in tax-to-GDP ratio, calling into question the government’s revenue mobilisation efforts.
The finance ministry said the total revenue in nine months (July 2011-March 2012) stood at 8.3 per cent of GDP, down from 8.6 per cent of GDP achieved during the same period last year.
Tax revenue, however, maintained its previous year rate at 6.5 per cent of GDP in first three quarters.
Non-tax revenue posted a significant decline in first nine months of the current year and stood at 1.7 per cent of GDP compared with 2.2 per cent of GDP achieved last year.
On the positive side, the expenditure remained under control.
The total expenditure in first nine months stood at Rs2.634 trillion this year at 12.5 per cent of GDP when compared with Rs2.279 trillion or 13.2 per cent of GDP the same period last year.
Of this, current expenditure stood at 10.2 per cent of GDP in nine months this year compared with 11 per cent of same period last year. Of this, interest payment stood at 3 per cent this year, slightly higher than last year’s 2.9 per cent.
Defence and development expenditures remained flat at 1.9 per cent and 2 per cent of GDP, respectively.
In absolute terms, the total revenue stood at Rs1.74 trillion in nine months of this year when compared with Rs1.5 trillion of same period last year, showing an increase of over 16 per cent.
Of this, the tax revenue this year amounted to Rs1.37 trillion compared to Rs1.117 trillion last year, showing an increase of 22.7 per cent.
The collection of direct taxes amounted to Rs470 billion in nine months compared with Rs370 billion of same period last year.
The non-tax revenue in nine months this year was Rs369 billion compared with Rs379 billion of same period last year, showing a reduction of 2.7 per cent.
Likewise, the total current expenditure in first nine months of this year stood at Rs2.582 trillion compared with Rs1.91 trillion of same period last year, showing an increase of 35 per cent.