Realistic economic indicators


Iqbal Khan

PAKISTAN Tehrik-e-Insaaf (PTI)’s federal government headed by Prime Minister Imran Khan presented its first formal budget for financial year 2019-20 which has since been debated at length and passed amidst a lot of hullah gullah and obstructions by the opposition parties jointly and is under implementation from 01 July 2019, the first day of the new fiscal year. PTI had come into power in August 2018 as a result of its securing majority of seats in a free, fair and orderly general election of 25 July 2018. But it had more or less to carry on with the federal budget for 2018-19 which was presented by PML(N) federal government as early as 27 April 2018 setting a new record of six budget is five years stipulated constitutional tenure and stepping down on May 31,2018.
PM Imran Khan and his economic team managers have been quite frankly and honestly telling the people about severe economic crisis which the PTI Government has inherited and as such all economic indicators in its first formal federal budget for financial year 2019-20 have been kept somewhat on lower side in a more realistic and achievable manner keeping all the bitter, painful and factual facts and figures in view. Prior to talking about the salient features of the PTI’s first formal federal budget, on the basis of facts and figures available from official sources, it is pertinent to mention here that real Gross Domestic Product (GDP) has been kept at the lowest level of 2.4 per cent and inflation at higher side between 11-13 per cent against 3.3 per cent and 7.2 per cent respectively of revised budget for financial year 2018-19.
Furthermore, total revenue has been estimated at 16.7 per cent, total expenditure at 23.8 per cent and fiscal balance at -7.1 per cent of GDP for the just commenced new financial year. As is already known to the people, by and large, the total outlay of the budget for fiscal year 2019-20 has been placed at Rs 8238.1 billion which was 38.9 per cent higher than the 2018-19 budget estimates of Rs 5932.5 billion which was increased to Rs 6409.3 billion in the revised estimates. Resources availability during current financial year was Rs 7899.1 billion against Rs 4917.2 billion budget estimates and Rs 5062.8 billion in the revised estimates for the last financial year. There are two type of resources ie internal and external. The internal resources comprise revenue receipts, capital receipts an estimated surplus of provincial governments of the Punjab, Sindh, Khyber Pakhtunkhwa and Balochistan whereas the external resources come from loans and grants from the foreign countries and international financial institutions.
Accordingly, the gross revenue receipts have been estimated in the new budget at Rs 6716624 million indicating an increase of 18.7 per cent and 33.5 per cent over the budget and revised estimates respectively for the last fiscal year. The tax revenue for the new financial year has been estimated at Rs 5822160 million reflecting an increase of 33 per cent over revised estimates for the last financial year. This included main revenue generation agency, Federal Board of Revenue (FBR), collection is estimated to be Rs 5555000 million while non-tax revenue has been projected to be around Rs 894464 million during current financial year as compared to Rs 637751 million in the revised estimates for last financial year. Direct taxes include Income Tax, Workers Welfare Fund and Capital Value Tax, Indirect Taxes are Customs Duties, Sales Tax and Federal Excise and other taxes include Airport Tax, Gas Infrastructure Development Cess, Natural Gas Development Surcharge, Petroleum Levy among others.
The share of the provinces in taxes for the new fiscal year has been estimated at Rs 3254526 million which was as much as 32.2 per cent higher than the revised estimates of Rs 2569.0 billion for the just passed year.After the share of the provinces in gross revenue is transferred , the net revenue of the Federal Government has been estimated at Rs 3462099 million for fiscal year 2019-20. External receipts for the new financial year have been estimated at Rs 3032.3 billion showing an increase of as high as 171.2 per cent over Rs 1403.2 billion in the revised estimates for last fiscal year. The overall expenditure this fiscal year has been estimated at Rs 8238.1 billion including the current expenditure of Rs 7288.1 billion against revised estimates of Rs 5589.431 billion for 2018-19.
The expenditure on General Public Services has been estimated at Rs 5607.0 billion is as much as 76.9 per cent of the current expenditure. Overall size of the Public Sector Development Programme (PSDP) for 2019-20 has been estimated at Rs 1613 billion out of which Rs 912 billion have been allocated for financing the Annual Development Programmes (ADPs) of the provinces and the Federal PSDP size was Rs 701 billion. The PSDP 2019-20 will be dilated upon in detail separately some other time. The development expenditure outside PSDP has been estimated at Rs 85.8 billion in the new federal budget. To meet the expenditure, bridging the gap between the resources and expenditure, bank borrowing by the Federal Government during financial year 2019-20 at Rs 339 billion which was lower by as much as by Rs 688.7 billion than the revised for last financial year reflecting appreciable decrease of 75 per cent. Figures have been kept to the barest minimum level to save the readers from some burden.
—The writer is retired Deputy Controller (News), Radio Pakistan and a freelance journalist columnist based in Lahore.

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