The overall development spending in Pakistan plummeted 38 per cent to Rs 130.64 billion in the first five months (July-November) of the current fiscal year, reported Dawn. It is believed that the development expenditure is being curtailed to contain the rising fiscal deficit owing to the increase in current expenditures
The spending in the corresponding period of last year clocked at Rs 209.53 billion, the data released by the Ministry of Planning and Development reveals. The visible drop will not only slow down the economy but also take a toll on revenue collection. Meanwhile, the PMLN-led coalition government has appointed over 70 special assistants, who are drawing huge salaries besides perks and privileges at a time when the country's forex reserves have dwindled drastically and industries are cutting their production, reported Dawn.
The government now estimates its overall expenditures to surge past the budget target by about Rs 1 trillion due to about Rs 900 billion higher interest payments and expected Rs 422 billion revenue shortfalls that may need to be bridged through additional tax measures in the second half of the current fiscal year. The Planning Ministry data showed that about Rs 224 billion had been authorised for utilisation under the rules and disbursement mechanism during 5MFY23 but actual spending could not go beyond 41.8 per cent or Rs 130.64 billion, reported Dawn.
The Ministry of Finance has already reported the country's first quarter fiscal deficit at 1 per cent of GDP against 0.7 per cent in the same period last year. The deficit in absolute numbers in three months this year was reported at Rs 809 billion compared to Rs 484 billion in the same period last year -- up 67 per cent. According to the finance ministry, the country's revenue collection dropped in the first three months of FY23 and total expenditures went up when compared to the same period last year -- leading to an increase in the fiscal deficit, reported Dawn.
The total revenue as a percentage of GDP dropped to 2.6 per cent this year from 2.7 per cent last year as tax revenue plunged to 2.3 per cent of GDP when compared to 2.7 per cent of GDP in the first quarter last year.