Factors responsible for slippage of Rs 120 billion

The slippage of Rs 120 billion in fiscal performance during July-September (2009-2010) was due mostly to temporary factors. According to the Letter of Intent (LoI) submitted by the government of Pakistan to the International Monetary Fund (IMF), four principal factors (totalling 0.8 percent of GDP) accounted for this slippage, and the government acted to offset most of their impact on the budget.
These factors were: (i) a delay in a large service payment; (ii) an extension of the period for advance income tax payments to October 15, 2009; (iii) an advanced salary payment to federal and provincial employees in September due to the Eid holiday; and (iv) higher security spending. The government was able to limit the fiscal slippage to 0.3 percent of GDP through expenditure control.