Budget deficit for 2011-12 estimated at Rs 950 billion
By Sajid Chaudhry
ISLAMABAD: Consolidated (federal and all four provincial governments) budget deficit is estimated at Rs 950 billion in the forthcoming fiscal year 2011-12, official sources informed Daily Times on Saturday.
The equivalent amount of deficit would be arranged through local and foreign borrowing.
“The local borrowing is to be done through bank borrowing and non-debt creating instrument like national saving schemes,” explained the sources.
“The total volume of the expenditures is being set at Rs 3.4 trillion and against this the revenues and resource availability of the government would be around Rs 2.450 trillion,” the sources added.
The sources, involved in the budget making exercise, informed that total tax collection was estimated at Rs 1.952 trillion and non-tax revenues of the federal government would be around Rs 400 billion, in the next fiscal year 2011-12.
The budgetary support and grants for social sectors, including Benazir Income Support Programme, Citizen Compensation Plan for Flood Affected Population, grants for other social projects like health and education and IDPs, would also help government to spend on such areas.
The official sources said that the consolidated budget deficit was being estimated at around Rs1 trillion during the ongoing fiscal year, the highest ever in the history of the country, as the government had informed the lending agencies that it would be able to keep the budget deficit at 5.3 percent of the GDP as against the pre-flood initial target of 4 percent of the GDP for 2010-11.
The main reason behind increase in the budget deficit is additional flood related expenditures, additional security related expenditures and over and above the budgetary level subsidies for power and the POL sector.
The PPP government is incurring heavy consolidated budget deficits continuously during the last few years and budget deficit in the last fiscal year 2009-10 was recorded at Rs 929.061 billion, Rs 680.4 billion-budget deficit in fiscal year 2008-09 and Rs 777.169 billion-budget deficit in 2007-08.
Source: Daily Times