Incurable budgetary deficit


IN the first year of the ruling party, public finances deterio
rated further with budget deficit rising to a record Rs 3.45
trillion or 8.9% of the size of national economy. Official figures released by the Ministry of Finance on Tuesday confirmed that the PTI Government exceeded its budget deficit target by 82% which stood at Rs 3.444 trillion in fiscal year 2018-19. The budgetary deficit target was just Rs 1.9 trillion.
Reports about the agonizing budgetary deficit have only thing positive that the Government was fair and transparent and is not indulging in the past practice of hiding true facts from the people. This is encouraging as the Government can only take remedial measures by taking people of Pakistan on board about actual situation as far as economic and financial health of the country is concerned. However, the record deficit of 8.9% is shocking as it comes in the backdrop of a series of measures taken by the PTI Government throughout the last financial year aimed at controlling the expenditure and increasing tax collection. However, the data released by the Ministry shows the steps taken by the Government were not substantial and the situation, instead of improving, deteriorated further during the year, which should be a cause for concern for the leadership especially the economic team of the Government. It is all the more ironical that the country reached to this state of affairs despite massive scaling back of the developmental activities by the incumbent Government. Against the budgeted Public Sector Development Programme (PSDP) of Rs 800 billion, the actual PSDP spending stood at only Rs 561.7 billion, which was even less than the Rs 661 billion in the last year of the PML(N) Government. It is also intriguing that a multitude of measures taken by the Government during the last one year has increased the tax burden on the people and prices of almost all goods and services have gone up but the tax collection, which could have formed the basis for reduction of budgetary deficit, has gone down further. Under these circumstances, the undertaking given to the IMF to turn the budgetary deficit into surplus in three years seems to be Herculean task and might lead to further pressure on the common man.