From July to December 2019, the fiscal deficit was 2.3, 995 billion rupees of GDP
Islamabad … News Time
The second quarter of the delegation of the International Monetary Fund (IMF) to Pakistani authorities due to the country’s fiscal deficit exceeding 2.3 percent of GDP, despite tight control over government spending in the first half of 20-2019. Fisheries face ‘extreme’ reviews. According to the newspaper report, informed sources said that the fiscal deficit from July to December 2019 was 2.3, 995 billion rupees of GDP. That’s 0.6% more than the first quarter, which caused a massive shortfall of Rs 2 trillion in revenue in the same period. The federal government limited the expenditure from July to December to Rs 1 trillion 83 billion, which is 42 percent of the Rs 4 billion 40 billion allocated in the budget.
Senior officials told the IMF that no subsidy grants were issued in the first 6 months on public spending and the government was following the promise of simplicity. During the same period, the fiscal deficit in the period 19-2018 was 2.7 percent of GDP or Rs. 1 trillion, but the annual deficit was 8.9 percent compared to 4.9 percent allocated in the budget. He said the IMF had projected a deficit of 3.2 percent in the first half of the financial year, but the deficit has almost reached there and the gap is only Rs 34 billion. He said that the government performed best on the basic balance standards under the IMF program but this could not affect the delegation.
The IM delegation understands that this is neither stable nor desirable because most of it came through rollovers from the last financial year and does not support the development of revenue. IMF delegation said officials involved in the talks said the tax shortfall would be more than Rs750 billion. According to him, further financial adjustments and additional revenue measures were briefly mentioned in the preliminary discussions. However, this was done deliberately because the policy level will be debated on February 11 (Tuesday), and the prospects for additional tax measures are weaker in the face of weak economic conditions.
Responding to a question, officials said revenue targets are likely to be 10 to 20 percent for deeper revisions because the IMF has already allowed to reduce the tax targets from Rs 55 trillion to 52 trillion 70 billion. Non-productive revenue can be increased from Rs 8 trillion to Rs 16 trillion allocated to budget; officials say the revival of telecom revenue, due to the State Bank’s profits, had already been revised to Rs 12 trillion.
Authorities suggest petroleum waiver and gas infrastructure cess rate, privatization process and central bank profit and revising the profitability of public companies due to oil prices will help further in this regard. According to him, not only the revenue but also the energy sector, performance is not up to the schedule, authorities have not been able to control the rotation loan as promised, but have also been slow to announce a second quarter tariff adjustment for electricity producers’ potential payments.
The IMF delegation will review February 13, during which it will determine whether the government will receive $ 45 million in the month of March under the 39-month program which the government desperately needs to regain confidence in foreign exchange reserves and markets. So far, Pakistan will receive $ 1.1 billion, which was given in July in the form of $ 99 million in December and $ 15 million in December. From the IMF’s $ 6 billion program, the country has received $ 1 billion 65 billion by 2023, of which $ 4 billion 36 million will be returned to the IMF during that period.
