Federal Finance Minister Ishaq Dar has been consistently accused of budgetary data manipulation to show a lower deficit than is the case. This manipulation is not only limited to showing a better performance of the Federal Board of Revenue by relocating two items from non-tax revenue to tax revenue notably gas infrastructure development cess and natural gas levy (amounting to 145 billion rupees last year and projected to generate 153 billion rupees in the current year) but also deliberately overstating non-tax revenue collections that are simply not based on an informed, valid assessment of the likely inflows. With respect to non-tax revenue, the budget for 2017-18 envisages a rise from 314.1 billion rupees in the revised estimates of last year under the head of receipts from civil administration and other functions to 413.1 billion rupees in the current year - or a rise of 32 percent. And the major increase is sourced to defence services receipts or reimbursements by the United States under the Coalition Support Fund. Ishaq Dar budgeted 170.7 billion rupees last year under this head, while only 74.5 billion rupees were disbursed (or less than 44 percent) and has budgeted 141.7 billion rupees in the current year's budget in spite of the fact that the Trump administration has clearly yet to prioritize Pakistan as a key ally more than 6 months after its tenure began. Further disturbing reports from the US indicate that the Trump administration is considering withholding assistance to Pakistan.

The second major component of non-tax revenue budgeted to rise in the current year is the share of surplus profits of the State Bank of Pakistan (SBP) - from 228 billion rupees as noted in the revised estimates of 2016-17 budgeted to rise to 260 billion rupees in the current year's budget - a rise of 14 percent. The question is whether this is a realistic target or whether the Finance Minister has simply put in an amount to show a lower deficit than is in fact remotely likely. It is unfortunate that one would be compelled to argue that this is an unlikely amount and this assessment is based on the fact that last year too there was a major differential estimated at nearly 23 percent between what was budgeted (280 billion rupees) and what realized (228 billion rupees).

Yet another addition as non-tax revenue by the Dar-led Finance Ministry not found in budgetary documents prior to the current Sharif administration's tenure is the item titled 'foreign grants' which is budgeted to decline from 61 billion rupees in the revised estimates of last year (budgeted at 75 billion rupees) to 43.5 billion rupees in the current year. However, what is inexplicable is that data presented under foreign grants in tables titled external resources does not match the amount in the non-tax revenue. Thus in the revised estimates in fiscal year 2016-17 the external grants are estimated at 24.6 billion rupees only while they are projected at 27 billion rupees for the current year. One would of course like to question the Finance Ministry as to the reason behind this discrepancy.

To conclude, it is obvious that some innovative accounting has been employed by the Dar-led Finance Ministry during the past four years, however, what is unfortunate is that this exercise is not only relatively easy to unearth, which must be a source of constant embarrassment to the Ministry, but more importantly compromises the Ministry's ability to take informed decisions that would be in the economic interest of the country as well as in the political interest of the ruling party.

Copyright Business Recorder, 2017