Islamabad: The Government admitted on Friday before the Parliament that the development expense had flattened despite the increase of more than 47 percent in the growth of income, the 37 percent cut in the subsidies and 170pc more than surpluses in cash provided by four provinces.
In its mid -year budget review report to Parliament as required in Section 34 (1) of the 2019 Public Finance Management Law, the Ministry of Finance (MOF) said that the previous consolidation helped contain a fiscal deficit in 1.9pc of Julio GDP in December 2024 against 2.5PC last year and placed the primary GDP of the GDP, the gap between the total income and Total debt expenses, debt service, in December of a level 2. 1.4PC surplus last year.
The report said that the Public Sector Development Program (PSDP) consumed RS261bn in the first six months of the current year compared to RS255BN a year ago. The four provinces provided the Cash surplus of RS775B in the first half compared to RS289BN last year.
He said that due to solid macroeconomic management, effective inflation control measures and the greatest stability of the fiscal and external account, the first half witnessed positive developments in key macroeconomic indicators. IPC inflation decreased substantially to 7.2pc of 28.8pc last year. This allowed a change in the direction of monetary policy and the reference interest rate was reduced by 1,000 cumulative base points to 12 percent in January.
PSDP launches is at RS261B in 1HFy25 against RS255BN in the first six months of last year
On the external side, the current account recorded a surplus of $ 1.2 billion against the deficit of $ 1.4 billion last year. Foreign direct investment (FDI) improved significantly, increasing by 20 percent, while remittances increased by an impressive 32.8pc. The foreign exchange reserves were $ 16.1bn as of December 20, 2024.
On the fiscal side, prudent fiscal management led to a substantial increase in income collection. Net income receipts have improved in 47pc compared to the corresponding period last year, with an increase of 82pc in non -tax revenues and 25.9pc in tax revenues, although significantly behind the objective.
Federal government expenses grew at 22.2pc to RS8.2tr compared to RS6.71TT last year, mainly due to debt service that consumed 65pc of total current expenses. The expenditure on the functioning of the civil government was 40 % of the budget estimates. Similarly, the defense expense also remained at 42pc of the allocation of the FY25 budget. The Government did not extend any complementary subsidy during the period and the unforeseen requirements were addressed by reappropriations and technical complementary subsidies.
During July to December 2024-25, the collection of income that is not taxes remained well above the budgetary objective, with 74pc of the objective achieved in the first half, since the 82 percent increase was witnessed compared to the corresponding period of the last fiscal year, mainly due to a RS2.5tr RS2 gain. Levy compared to last year RS472B.
Posted in Dawn, May 10, 2025
