Federal Cabinet has reportedly approved a consolidated outlay of Rs 5.36 trillion for the next fiscal year, envisaging an ambitious revenue collection target of Rs 3.522 trillion and fiscal deficit of Rs 1.620 trillion, sources in the Finance Ministry said.
When contacted Prime Minister''s Press Secretary also confirmed that budget strategy paper and consolidated outlay projection has been approved by the Federal Cabinet presided over by the Prime Minister Raja Pervez Ashraf on Thursday.
A senior official of Finance Ministry on condition of anonymity said that projected subsidies of Rs 364 billion for the next fiscal year simply indicates government failure to bring about necessary reforms in the public sector organisations. As a result, deficit of 5.8 percent for the next fiscal year would be met by taking domestic loans of Rs 1,550 billion, which in turn would result in crowding out of private sector and consequently hampering growth and employment opportunities.
Sources said that the Finance Ministry has also informed the Cabinet that the country''s economic situation is grave and financing of fiscal deficit for the current fiscal year could be a challenge. Finance Ministry in the cabinet also stated that projected target of investment as percentage to the GDP could not be achieved during the current fiscal year. Additionally, the government has also overrun considerably consumption target as percentage to the GDP. The investment target has been revised downward to 12.6 percent from 13.1 percent of the GDP for the current fiscal and consumption target has been revised upward to 94.5 percent of the GDP from 93.9 percent budgetary projection.
Finance Ministry has estimated interest payment of Rs 1149 billion for the next fiscal year, Rs 223 billion higher over Rs 926 billion for the current fiscal year. Allocation for defence has been made Rs 627 billion for the next fiscal year, which is Rs 82 billion higher from Rs 545 for the current fiscal year. The government earmarked Rs 155 billion for pension liability for fiscal year 2013-14 against Rs 141 billion for current fiscal year, reflecting an increase of Rs14 billion.
The allocation of Rs 278 billion has been made in the budget for federal government service delivery against Rs 262 billion for the current fiscal year. The grants to the provinces and grants other than to provinces have been estimated at Rs 54 billion and Rs 383 billion respectively for the next fiscal year and Public Sector Development Plan (PSDP) expenditure at Rs 450 billion. The gross revenue collection has been estimated at Rs 3.522 trillion with total revenue collection both tax and non-tax at Rs 2.833 trillion. The revenue collection by the Federal Board of Revenue (FBR) has been estimated at Rs 2.675 trillion.
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