According to the latest data released by the ministry of Finance on 'consolidated federal and provincial budgetary operations' for July-September 2006-07, government's total expenditures stood at Rs 342.364 billion, including unidentified expenses of Rs 33.047 billion whereas its revenues totalled at Rs 255.672 billion.
This big increase in the budget deficit in absolute and percentage terms during the first three months of the new fiscal would force the government to expand its external and domestic borrowing to bridge the deficit gap.
Its interesting feature is that during the last three-quarters of the FY2005-06, GDP remained constant at Rs7.465 trillion while in the fourth quarter it suddenly leapt to Rs7.713 trillion and now in the first quarter of the new fiscal 2006-07, it grew to Rs 8.808 trillion.
It is pertinent to note that out of the total expenses, the government spent only Rs 67.46 billion or 21.8 percent for the Public Sector Development Programme (PSDP). A huge sum of Rs 244.16 billion or more than 79 percent was consumed by current expenditures. The defence expenditures were Rs 54.57 billion during this period.
After analysing and comparing the fiscal data of the first quarter with that of year-ago, two important indicators emerged. First, the budget deficit is higher than what it was - one percent against 0.50 per cent of the GDP. Secondly, the amount of unidentified expenses is much greater than what it was - Rs 33.047 billion against Rs 3.881 billion recorded during corresponding quarter of last fiscal.
On the positive side, the expenditure on three-month PSDP during the period of this fiscal is higher than the same period of the last fiscal. This indicates a change for better in government's policies but much depends on the actual utilisation of the PSDP allocations. The actual utilisation of the PSDP in the first three months of the fiscal year was about only 78 percent.
CURRENT EXPENSES: Within the current expenses of Rs 244.163 billion in July-September 2006-07, Rs 97.80 billion went to general public services of the federal government, including Rs 49.09 billion on domestic debt servicing and Rs11.22 billion on foreign debt servicing.
The defence sector devoured Rs 45.57 billion, expenses on public order and safety affairs ate up Rs 4.03 billion, and economic affairs consumed Rs 7.93 billion. The government somehow managed to spend Rs 3.677 billion (0.04 percent of GDP) on education affairs and services, but the most vital health sector received only Rs 903 million. Worse still, the government spent only Rs 139 million on social protections (direct relief to the poor) and a negligible sum of Rs 32 million on environmental protection.
The Rs 903 million spending on the health sector means this sector's share in the overall current expenses was 0.36 per cent (0.01 percent of GDP) in the first quarter of this fiscal. Similarly, Rs32 million spending on environmental protection comes to 0.013 per cent of total current expenses.
According to the data the federal revenue collection during the first three-month was Rs 255.672 billion. Rs 191.62 billion were tax collection. The non-tax revenues stood at Rs 64.052 billion during the July-September period of FY 2006-07. Out of non-tax revenue, Rs 13.558 billion were collected in lieu of petroleum and gas surcharges that include Rs 7.556 billion as petroleum development surcharge and Rs 6.00 billion from gas development surcharge.
TRANSFERS TO PROVINCES: The data further say that the federal government has transferred Rs 78.539 billion to the four federating units (Punjab, Sindh, NWFP and Balochistan).
The provincial revenues of the government of Punjab amounted to Rs 45.54 billion against the expenditures of Rs 59.54 billion during the July-September period of the FY 2006-07. Punjab received Rs 37.21 billion as revenue share from federal taxes as NFC Award share during this period under review.
The total revenue of the government of Sindh stood at Rs 31.77 billion and the total expenditures of the province remained at Rs 29.54 billion during the period. It received Rs 26.23 billion as revenue share.
NWFP total revenues amounted to Rs 12.49 billion and total expenditures of the province stood at Rs 13.80 billion. The NWFP government received Rs 8.72 billion from the federal government during the said period.
The total revenue of the government of Balochistan stood at Rs 8.88 billion and the total expenditure of the province remained at Rs 8.79 billion during this period of the current fiscal year. The provincial government received a sum of Rs 6.38 billion from the federal government.