ISLAMABAD - By adopting tight cash release policy and healthy revenue collection, the government had curtailed fiscal deficit at around 2.6 per cent of GDP during the first half (July-December) of the ongoing financial year 2011-12, said a top official of the Finance Ministry.
The government has controlled the expenditures during the first six months of the current fiscal year as it had released 45 per cent for the expenditures against the target of 50 per cent, said a senior official of the Finance Ministry while talking to The Nation. “The government has reduced its expenditures across the board”, he maintained. Except defence spending and debt servicing, as these are obligatory spending, the government had controlled its other expenditures, he added.
Similarly, he informed that government did not cut the Public Sector Development Programme (PSDP) as it released allocated 40 per cent during the first six months of the year 2011-12. Apart from reducing the expenditures, the revenue collection also showed healthy improvement in the period under review.
The (FBR has collected Rs 840 billion revenues during the first half (July-December) of the ongoing financial year, which is 43 per cent collection of the overall target of Rs 1,952 billion. The revenue collection of Rs 840 billion in July-December 2011-12 is 27 per cent higher than the collection of Rs 661.7 billion of July-December 2010-11.
The government has revised the fiscal deficit to 4.7 per cent of the GDP against the budgetary target of 4 per cent for the ongoing financial year due to heavy rains, floods in the country and low growth in the economy due to global recession.
According to the sources, the government has planned to keep fiscal deficit at 1.1 to 1.2 per cent during the next two quarters (January-March) and (May-June) of the ongoing financial year. According to the sources, the revenue collection would further improve in the months to come that would keep fiscal deficit under control in the second half of the ongoing financial year.