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In a recent announcement, the Finance Ministry has revealed that the government closed the first quarter of the current fiscal year (July-Sept 2023-24) with a budget deficit of 0.9 percent of the Gross Domestic Product (GDP) or Rs 962.801 billion.
Budget Deficit Analysis:
The consolidated data of fiscal operations, made public by the Finance Ministry, shows that during the first quarter of the current fiscal year, the total expenditure amounted to Rs 3.648 trillion, while the total revenue stood at Rs 2.685 trillion. This resulted in a budget deficit of Rs 962.801 billion or 0.9 percent of the GDP.
Provincial Variations:
When examining the provincial budgets, it is worth noting that Punjab and Khyber Pakhtunkhwa (KP) provinces ran deficits of Rs 28.550 billion and Rs 10.314 billion, respectively. In contrast, Sindh reported a budget surplus of Rs 19.099 billion, and Balochistan had a surplus of Rs 71.168 billion, leading to a provincial surplus of Rs 51.503 billion.
Expenditure Breakdown:
The fiscal operation data reveals that current expenditure for this period was Rs 3.172 trillion. This included significant components such as mark-up payments amounting to Rs 1.379 trillion, defense expenditure at Rs 343.068 billion, pension expenses totaling Rs 203.303 billion, running the civil government costing Rs 131.917 billion, subsidies at Rs 2.488 billion, and grants to others amounting to Rs 177.303 billion. Development expenditure and net lending reached Rs 282.387 billion, with the Federal Public Sector Development Programme (PSDP) at Rs 40.925 billion and provincial PSDP at Rs 245.53 billion. There was also a statistical discrepancy of Rs 193.563 billion.
Budget Financing:
To bridge the budget deficit, the government resorted to net external borrowing of Rs 425.170 billion and domestic (net) borrowing of Rs 537.631 billion. The primary balance was recorded at Rs 416.811 billion, equivalent to 0.4 percent of the GDP.
Revenue Details:
Tax revenue during this period was recorded at Rs 2.216 trillion, with the Federal Board of Revenue contributing Rs 2.041 trillion. Direct taxes accounted for Rs 934.789 billion, while indirect taxes totaled Rs 1.106 trillion, including customs duties at Rs 252.220 billion, sales tax at Rs 726.944 billion, and federal excise at Rs 127.594 billion. Provincial tax collections amounted to Rs 175.391 billion.
Non-Tax Revenue:
Total non-tax revenue collection was Rs 468.815 billion. Federal non-tax revenue stood at Rs 452.069 billion, consisting of various sources such as mark-up, dividends, profit from PTA, and more. Provincial non-tax revenue amounted to Rs 33.888 billion.
This report provides an insight into the government’s fiscal performance in the initial quarter of the fiscal year, highlighting both challenges and opportunities for the coming months.
