Budget deficit touches 7.3 per cent of GDP

The official said that the government decided to pay some of liabilities in the current financial year, starting from July 2008 to June 2009, that was why it announced to keep the deficit at 7 per cent, lower than Ishaq Dar’s projection.
On the other hand, the Finance Ministry officials said that they cleared all the liabilities, of which they were “conscious�.
The government reduced the gap between income and expenditure to 7.3 per cent by rationalizing some of the development and current expenditures, they added.   
For the current financial year, July 2008 to June 2009, the government has targeted to keep the budget deficit at 4.7 per cent of the total size of the economy. The sources who are part and parcel of budget making process said even this target was ambitious, and the government may end up at 5.5 per cent deficit, even if everything happens as planned.  
“How the government was projecting a negative growth in current expenditure as compared to the last financial year when it was expecting that the inflation would remain in double digits?� remarked the sources.
For the last financial year the government had estimated current expenditure at Rs 1056 billion but it actually spent Rs 1516 billion in this head. For this new financial year, the current expenditures are estimated at Rs 1493 billion, which is 1.5 per cent less than the expenditure incurred during the last year. The government has also projected inflation at 12 per cent.
The top bosses of the Finance Ministry defended their 4.7 per cent projection. They told TheNation that despite 12 per cent projected inflation, the government had a plan to restrict the current expenditure at estimated level of Rs 1493 billion. “Almost 90 per cent of the total current expenditure is either salaries or the goods, which will be provided to the government by the contractors at the already decided rates�, they said.