The Finance Ministry has now projected consolidated fiscal deficit of 7.5 percent at the end of financial year 2019-20 against the projected 7.1 percent due to revision in provincial surplus, documents available with this correspondent reveal.

The gross revenue receipts for the fiscal year were projected at Rs 6716 billion whereas mid-year actual gross revenue receipts stood at Rs 2970 billion.

The estimated less provincial share was Rs 3255 billion of which the mid-year actual less revenue share was Rs 1326 billion, which implies that net actual mid-year federal revenue receipts stood at Rs 1644 billion against the entire year's estimates of Rs 3462 billion. The actual mid-year expenditure stood at Rs 2987 billion against entire fiscal year's estimated expenditure of Rs 7022 billion.

The sources said that fiscal deficit of 7.1 percent was based on initial estimated provisional surplus of Rs 423 billion of provincial governments. Later on, after passing of provincial budgets by the respective provincial assemblies, provincial surplus was revised from Rs 423 billion to Rs 278 billion, which has resulted in a consolidated fiscal deficit of 7.5 percent.

During July-December 2019-20, the FBR has been able to collect around Rs 2093 billion as provisional tax revenues reflecting a growth of 16.6 percent. The overall achievement during the first six months has been 95 percent of the targets set by the FBR. The first six months target for direct taxes was Rs 824 billion but the FBR achieved Rs 784 billion, sales tax collection was Rs 859 billion against target of Rs 887 billion, the FEB collection stood at Rs 122 billion as compared to Rs 149 billion and customs collection remained at Rs 328 billion against target of Rs 338 billion.

The major contributors of income tax are withholding tax, voluntary payments and collection on demand. The collection of sales tax during the first six months has increased by 24 percent; collection of federal excise duties has recorded 29.8 percent growth, while custom duty has registered negative growth of 2.4 percent mainly due to imports compression.

Some of the factors are as follows: (i) unprecedented compression in imports;(ii) less consumption of petroleum products;(iii) decline in auto and auto parts sector;(iv) less growth in airline sector;(v) overall economic slowdown; and (vi) very challenging and unprecedented revenue targets.

On the expenditure side, the Finance Ministry says that current expenditure of federal ministries is well within the budgetary control after completion of half year. Federal Divisions through Principal Accounting Officers (PAOs) have been allocated a budget of Rs 440.5 billion during CFY 2019-20. Almost 54.4 percent (Rs 240.5 billion) has been allocated under ERE, whereas remaining 45.5 percent (200.06 billion have been allocated for operational (non-ERE) expenses. After half a year, Rs 183.6 billion has been consumed against the allocation, reflecting 42 percent utilization. Further split of Rs 183.6 billion reflects 49 percent utilization under ERE; and 33 percent utilization under non-ERE expenses.

The position of mid-year expenditure indicates that the government spent Rs 1281 billion on interest payments during the first half against whole year estimate of Rs 2891 billion. The expenditure on defence recorded at Rs 530 billion during this period against whole year target of Rs 1153 billion. The government spent Rs 220 billion on running of civil government against the whole year estimate of Rs 431 billion and expenditure on pensions was Rs 219 billion, against the whole year target of Rs 421 billion. The major discrepancy has been witnessed in grants/transfer. The grants/transfer were at Rs 282 billion during the first half against the whole year target of Rs 831 billion. Subsidies were released to the tune of Rs 104 billion against the whole year target of Rs 272 billion.