The government claimed on Monday that fiscal deficit has been restricted to 0.9 percent during the first quarter of the current fiscal year despite higher development spending. A senior official of Finance Ministry, who attended the meeting on fiscal operation for the first quarter presided over by Finance Minister Ishaq Dar, told Business Recorder that increase in revenue collection and lower expenditure on account of interest payment, etc. have helped manage the deficit.

However, he pointed out that there are concerns over non-tax revenue because $1.2 billion under the Coalition Support Fund are unlikely in the current fiscal year. The Finance Division has to make some adjustment in other accounts to offset the impact of $1.2 billion (Rs 126 billion approximately) on the budget deficit.

The official added that Secretary Finance Shahid Mahmood is pursuing the non-tax revenue mobilization very seriously because it constitutes one-fifth of the total revenue and shortfall on other account would have negative impacts on the budget. "The secretary finance will hold regular meetings on non-tax revenue to ensure that there is no shortfall in non-tax revenue other than CSF," he added.

He also maintained that markup expenses were less in the first quarter as compared to the same period of the last fiscal year. However, he said these numbers are provisional and there might be some adjustment in the numbers when these are finalized.

Sources said that limiting fiscal deficit to 0.9 percent against 1.3 percent for the last fiscal year is possible without placing bar on the development spending due to increase in revenue collection by the Federal Board of Revenue (FBR).

The finance secretary informed the meeting that provisional data noted Rs 765 billion collection of the FBR during July-September 2017, which is 20 percent higher against the same period of the last fiscal year. Provinces were transferred Rs 570 billion including arrears as compared Rs 416 billion for the same period of the last fiscal year.

Total expenditure during the first quarter was Rs 894 billion against Rs 914 billion for the July-September 2016. As a result, overall budget deficit was recorded at Rs 324 billion in the first quarter this year as compared to Rs 438 billion in the same period of last year. The meeting reiterated the government''s resolve of continuation on the path of fiscal discipline and directed officials to ensure the achievement of fiscal targets in the remaining three quarters of the current fiscal year.

Copyright Business Recorder, 2017