Daily Times

PML(N)’s federal government had stepped down on May 31, 2018 on completion of its stipulated 5 years constitutional tenure. But prior to doing that, it had created a record of presenting six budgets in the five years period. It had presented the federal budget for financial year 2018-19 as early as on April 27, 2018 leaving no room for the caretakers to present budgetary proposals for the interim period till the general election were held on July 25, 2018 and the new democratically government had assumed the power in August 2018 accordingly.

PTI’s federal government has since presented its maiden budget on June 11 which has since been discussed and passed by the National Assembly amidst all the hullah gullah and resistance from the opposition mainly by PPP and PML(N) parliamentarians.

Prior to talking about salient features of the new federal budget for financial year 2019-20 it is appropriate to review the federal budget for 2018-19 which was presented by the PML(N) government, saw through the caretakers period and was reviewed partially and implemented by the PTI’s federal government onwards after assuming the reigns of power in the second half of August 2018.

Prior to presenting the budgetary figures for the just gone by financial year, it is appropriate to mention here in some details about how federal resources are mobilized to enable the readers have better understanding of facts and figures presented below .

Resource mobilization , quite obviously, is essential to meet the recurring as well as development expenditure of the federal government. At the federal level, resources are generated through a well-coordinated and concerted efforts, according to the official sources concerned, by the revenue collecting agencies and other administrative units. The money so raised is properly deposited in the national exchequer, precisely accounted for and accurately reported in accordance with the principles of the financial propriety.

Article 78(!) of the 1973 Constitution provides that all revenues received by the Federal Government , all loans raised and all moneys received by it in repayment of loan, shall form part of the Federal Consolidated Fund.

Federal Revenue Receipts are broadly categorized as Tax Revenue and Non-Tax Revenue. Federal Board of Revenue (FBR) is the major tax collecting agency, tax revenue so collected by the FBR constitute the Divisible Pool of taxes which are distributed amongst the Provinces along with other Straight Transfers in accordance with the provisions of the National Finance Commission (NFC) Award. Additional to the FBR taxes, there are also other taxes i.e. Gas Infrastructure Development Cess, Natural Gas Development Surcharge, Petroleum Levy etc which are administered separately by the Ministry of Petroleum and Natural Resources.

As for the external resources are concerned, these comprise project loans and grants, programme loans and other loans which sare received from specialized international financial institutions and friendly countries for specific development needs and budgetary requirements.

According to the facts and figures available from official sources, the total outlay of the just ended fiscal year was Rs 5932.5 billion which was higher by 15.2 per cent than the size of the 2017-18 budget. The outlay size had increased further to Rs 6408.3 in the revised estimates for the last financial year.

On the other hand, net revenue receipts were estimated at Rs 3070.4 billion which decreased to Rs 2569.0 billion or by 16.3 per cent in the revised estimates. The share of the provincial governments in the federal revenue under the National Finance Commission Award was initially estimated at Rs 2590.1 billion for 2018-19 which had decreased by 4.9 per cent to Rs 2472.7 billion in the revised estimates. The net capital receipts for the year under review were put at Rs 443.1 billion which had substantially increased by as much as 132 per cent to Rs 1031.7 billion in the revised estimates. External receipts were estimated at Rs 1118.0 billion and these were increased to Rs 1031.7 billion (25.5 per cent) in the revised estimates.

The internal resources of the federal government come through net revenue receipts, capital receipts and estimated provincial surplus.

After the share of the provinces in gross revenue is transferred, the net revenue receipts of the federal government were estimated at Rs 3070.439 billion in the budget estimates which had since been revised downwards to Rs 2568.977 billion in the revised estimates showing a decrease of 16.3 per cent.

As compared to the receipts, the overall expenditure was estimated at Rs 5932.6 billion for the just-ended fiscal year. This included current expenditure of Rs 4780.4 billion which had increased to Rs 809.0 billion in the estimates. The expenditure on general public service was originally estimated at Rs 3340.4 billion which was as much as 69.9 per cent of the total current expenditure.

The development expenditure outside the Public Sector Development Programme (PSDP) in the budget was estimated Rs 170.2 billion which had decreased to just Rs 17.3 billion in the revised estimates for fiscal 2018-19.

The overall size of the Public Sector Development Programme was for 2018-19 was Rs 1650 billion which included Rs 850 billion for the provinces for financing their respective Annual Development Programmes (ADPs) thus PSDP net size was put at Rs 800 billion. The PSDP on the whole was revised by the PTI federal government without effecting major changes to bring it slightly down to Rs 675 billion. The revised PSDP included Rs 291.546 billion for the Federal Ministries and Divisions, Rs 218.563 billion for Corporations, Rs 5 billion for Pakistan’s Sustainable Development Goals (SDGs), Rs 5 billion as Special Provision for China-Pakistan Economic Corridor (CPEC) projects, Rs 45 billion for Security Enhancement , Rs 10 billion for FATA 10 Year Plan and Rs 45 billion for Relief and Rehabilitation of Internally Displaced Persons (IDPs) .

For meeting the expenditure of the federal government during financial year 2018-19, borrowing from the banking system was initially projected at Rs 1015.3 billion which, however, was revised upward as much as by Rs 349 billion putting the final figures at Rs 1356 billion in the revised estimates.

As regards macroeconomic indicators targets and achievements at the end of the fiscal year, Gross Domestic Product (GDP) Growth in real terms was financial year 2018-19 was fixed at 6.2 per cent against which only 3.3 per cent was achieved whereas inflation was estimated to be 6.0 per cent but it was recorded slightly higher at 7.2 per cent.

Total revenue comprising tax revenue, FBR tax revenue and non-tax revenue was estimated at 16.3 per cent of the GDP but it was lower at 14.5 per cent in the revised figures.

Total expenditure including both current and development was estimated at 21.2 per cent but it was finally placed at 21.7 per cent.

And, fiscal balance was targeted at -4.9 per cent but final figures for the last financial year put it higher at -7.2 per cent of the GDP.

The writer is Lahore-based Freelance Journalist, Columnist and retired Deputy Controller (News) Radio Pakistan Islamabad and can be reached at zahidriffat@gmail.com