The government has finalised contours of budget for next fiscal year envisaging 4.5 percent GDP growth, 5 percent fiscal deficit and a total outlay of around Rs 3.175 trillion, it is reliably learnt. Sources told Business Recorder that Budget Strategy Paper 2013-16 has been finalised in a meeting presided over by the Finance Minister on Friday and would be presented to the Federal Cabinet on Wednesday for approval.
A senior official said the Federal Board of Revenue (FBR) collection target has been proposed at Rs 2.650 trillion for the next fiscal year, however, the revenue collection target and total outlay may be adjusted slightly prior to the Cabinet meeting subsequent to finalisation of any proposal being considered by the high-ups of the Finance Ministry and the FBR to be made part of the budget to increase revenue collection.
The GDP growth has been projected at 4.5 percent, 4.8 percent and 5.3 percent in the next three fiscal years in the medium-term macrocosmic framework finalised and to be presented to probably in the last meeting of the Cabinet of the present government for approval on March 6 before finishing its tenure. Consumer Price Index (CPI) inflation has been estimated at 9 percent of the GDP for the next and subsequent fiscal years and 8.5 percent for the fiscal year 2015-16. The paper envisages 3.5 percent fiscal deficit target in the medium term.
Advisor to Finance Ministry Rana Asad Amin said Public Sector Development Programme (PSDP) of the federal government has been proposed at Rs 450 billion for the next fiscal year, Rs 90 billion higher than Rs 360 billion PSDP for the current fiscal year. He said the fiscal deficit for the current fiscal year would remain 5.5 to 6 percent of the GDP against the budgetary target of 4.7 percent due to expected shortfall in revenue collection, non-materialisation of budget external inflows and higher subsidies for the power sector.
An official who was involved in preparation of the budget strategy paper told Business Recorder on condition of anonymity that fiscal deficit target has been revised upward to 5.5 percent for the current fiscal year against budgetary projection of 4.7 percent, which he added, is still significantly low. The advisor to the Ministry of Finance said the FBR revenue collection is likely to be proposed at 9.8 percent of GDP for the next fiscal year as compared to 9.1 percent revenue collection target for the current fiscal year.
He said expected shortfall of Rs 200 billion in revenue collection target of the FBR, power sector subsidies of Rs 235 billion against the allocation of Rs 185 billion and non-materialisation of budget inflows on account of 3G license is going to add more than one percent to the fiscal deficit. The budget would be presented by the next government, he added.