Budget deficit touches 7.3 per cent of GDP

ISLAMABAD - Pakistan’s overall budget deficit during the last financial year ending on June 30, touched the peak of 7.3 per cent of the total size of the economy, which is more than what the new government announced in the federal budget.
Finance Ministry sources told TheNation that the gap between the government income and expenditure has further increased by a proportion of 0.3 per cent of the GDP, than what the new government announced at the eve of the federal budget.  
Finance Minister, Syed Naveed Qamar in his budget speech on June 11, 2008, said that for the financial year 2007-08 the government expenditure, current and development, would exceed its income, tax and non-tax revenue, by 7 per cent of the total size of the economy.
One of the top officials of the Finance Ministry said the deficit swelled against the expectations due to certain financial slippages in the federating units. “We try to convince the provinces to remain in parameters given by the federal government. The deficit further increased, as the provinces crossed the given boundariesâ€�, he added.  
Shaukat Aziz-led economic team had estimated that the budget deficit from July 2007 to June 2008 would remain at four per cent of the total size of economy. In April 2008, the then Finance Minister, Ishaq Dar after taking charge of the economic affairs told the media that the Shaukat Aziz-led government under reported the figures and the deficit would be at 9.5 per cent of the total size of the economy by June 30, 2008.
“Ishaq Dar was of the view that the new government should pay all liabilities, including subsidies on oil to the Oil Marketing Companies, during the just ended fiscal year, and the new government should start the next financial year with a clean slate,� said the official by quoting the former Finance Minister of PML-N, who resigned with other party colleagues from the Cabinet on judges’ restoration issue.