The government has finalised a consolidated budget of Rs3.854 trillion for the next financial year, envisaging a revenue of Rs2.787 trillion, fiscal deficit of Rs912 billion and provincial transfers of Rs1.224 trillion.
The budgetary allocations indicate that current expenditures of most of the federal ministries will be frozen at the level of the current year because of tight fiscal position.
Official documents available with Dawn show the government has set a tax revenue target of Rs2.1 trillion, 2.3 per cent above the current year’s revised target of Rs1.71 trillion. This includes a Rs1.952 trillion tax target of the Federal Board of Revenue (FBR) against current year’s revised estimate of Rs1.588 trillion. The non-tax revenue is estimated at Rs687 billion, up 30 per cent from this year’s revised estimate of Rs526 billion.
Of the total revenue of Rs2.787 trillion, the provinces would get Rs1.224 trillion and Rs1.513 trillion would be for the federal government.
The government had set a revenue target of Rs2.410 trillion for the current year, but it has now been revised to Rs2.235 trillion, because of a shortfall in FBR collection, non-introduction of RGST and slow economic growth.
The centre’s total expenditure has been estimated at Rs2.549 trillion, up from current year’s revised estimate of Rs2.314 trillion. The centre would extend Rs55 billion subsidies to the provinces.
The size of the federal Public Sector Development Programme has been estimated at Rs280 billion against current year’s original estimate of Rs270 billion which was brought down to Rs180 billion.
Another Rs35 billion would be spent for flood relief assistance, slightly less than current year’s Rs40 billion.
Pensions would require Rs118 billion against Rs107 billion this year. Likewise, federal government’s service delivery cost has been estimated at Rs200 billion, which is about Rs20 billion more than current year’s revised estimate of Rs180 billion – brought down from budgeted Rs221 billion.
SECURITY AND INTEREST: The government would earmark Rs495 billion for defence, about 12 per cent more than current year’s allocation of Rs442 billion. Another Rs340 billion would be made available through grants for security expenditure, up 19.3 per cent from current year’s Rs285 billion. Put together, security-related expenditures would amount to Rs835 billion against this year’s Rs727 billion, up by 15 per cent.
An almost equally a large amount of Rs786 billion would be paid as interest cost, which is about Rs60 billion or 8.3 per cent more than current year’s revised debt servicing of Rs726 billion. The government had earmarked Rs699 billion in the 2010-11 budget for debt servicing which has been revised to Rs726 billion.
About Rs50 billion would be allocated for the ministry of interior, up from current year’s Rs44 billion.
BUDGET DEFICIT: The federal government’s fiscal deficit has been estimated at Rs1.036 trillion that is expected to be reduced to Rs912 billion because of a Rs124 billion cash surplus to be provided by the provincial governments. For the current year, the government had envisaged an overall deficit of Rs685 billion (4.5 per cent of GDP) that has now been revised to Rs960 billion or 5.5 per cent of GDP. The provinces were expected to generate a cash surplus of Rs167 billion but it was revised to Rs112 billion.
The budget deficit would be met through Rs95 billion worth of grants, net domestic bank borrowing of Rs807 billion and net external borrowing of Rs10 billion.
PROVINCIAL FINANCES: The provinces would get Rs1.224 trillion, up 23 per cent from the revised estimate of Rs993 billion during the current year. At the time of budget announcement last year, the centre had promised net transfers of Rs1.034 trillion to the provinces, which has been revised to Rs993 billion, a reduction of about Rs40 billion.
The provincial governments are expected to generate a tax revenue of Rs78 billion next year, slightly higher than current year’s revised estimate of Rs67 billion. Provincial non-tax revenue is expected at Rs69 billion against Rs66 billion revised estimate of this year.
The total expenditure of the provinces has been estimated at Rs1.305 trillion against current year’s estimate of Rs1.056 trillion.
FEDERAL MINISTRIES: A total of 17 ministries have been devolved to the provinces and, therefore, there would be no allocation for them for current expenditure in the budget. The remaining 31 ministries have been given the ceiling of about Rs155 billion for their current expenditure.
Some of the key ministries that have been given major allocations include the interior ministry, Rs50 billion; cabinet division, Rs5 billion; establishment division, Rs1.4 billion; commerce, Rs4.8 billion; defence ministry, Rs6.8 billion; finance and revenue, Rs22 billion; foreign affairs, Rs12 billion; housing and works, Rs2.4 billion; Kashmir and Gilgit-Baltistan, Rs8 billion; and States and Frontier Regions along with Fata, Rs16 billion.