Government reliance on borrowings: interest on domestic, foreign debt surge by Rs 132 billion

The interest on domestic and foreign debt witnessed a phenomenal increase of Rs132 billion during the first quarter of the current fiscal year largely because of heavier reliance on domestic borrowing. A document detailing the government's fiscal operations for July-September this year showed that the interest stood at Rs313 billion, up by 72 percent against Rs181 billion for the same period last year.
Domestic interest expenditure rose to Rs299 billion during July-September this year against Rs169 billion for the same period last year.
The fiscal deficit was recorded at 1.2 percent of GDP for the first quarter of 2012-13 or Rs282 billion of GDP during July-September 2012 against Rs261 billion or 1.3 percent for the same period of last year. A significant increase, Rs65 billion, was noted as statistical discrepancy or unaccounted for amount, in the current fiscal year against Rs38 billion for the same period of last year. A budget surplus of Rs86 billion was generated by the provincial governments, as per summary of fiscal operation for the first quarter of 2012-13.
The total revenue collection for the first three months of the current year was Rs644 billion - Rs428 billion collected by the Federal Board of Revenue (FBR) and Rs216 billion non-tax revenue - during the first quarter of the current fiscal year whereas the total expenditure was recorded at Rs735 billion - Rs282 billion higher than revenue.
The summary of the fiscal operation showed Rs278 billion have been transferred to the provinces during the first quarter of the current fiscal year, leaving Rs366 billion share of the federal government. The total expenditure of the federal government increased to Rs735 billion during the first quarter of the current fiscal year against Rs554 billion for the same period of last year due to considerable increase in the interest expenditure.
The interest payment was recorded at Rs313 billion in the first quarter against Rs181 billion for the same period of last year, depicting an increase of Rs132 billion. Defence expenditure was recorded at Rs117 billion, up by Rs10 billion over Rs107 billion for the same period of last year, civil government expenditure was Rs48 billion, Rs34 billion was on account of pensions, Rs45billion for grants and Rs58 billion subsidies.
The federal government also extended Rs14 billion grant to provinces whereas Rs38 billion was released for the Public Sector Development Programme (PSDP) during the first three moths of the current fiscal year.