RE (PPI) The governments fiscal deficit stands at Rs490 billion, which is 2.9 percent of the GDP in 1HFY11 as compared to Rs403 billion in 1HFY10, depicting a growth of 22 percent, said the latest number released by Ministry of Finance.
During 2QFY11 deficit reduced marginally by 22pc to Rs214b, which is 1.2pc of the GDP, from Rs276 billion 1QFY11. During the period under review, revenue collection improved by 9 percent to Rs989 billion primarily stemming from 9 percent increase in tax revenue whereas 7 percent increase was witness in non-tax revenue.
Experts said that the tax revenue break-up shows that there was 13 percent improvement in the direct collection while 7 percent increase was witness in indirect tax mainly led by higher sales tax (up 17 percent). On the other hand, PL (Petroleum Levy) which was Rs88 billion last year fell to Rs35 billion.
Total expenditure increased by 13 percent primarily driven by surge in the head of current expenditure which increased by 16 percent. Major heads within current expenditure interest payments and defense expenditure rose by 6 percent and 30 percent respectively. On the other hand, developmental expenditure declined by 13 percent to Rs207 billion.
In the absence of external support, government had to heavily rally on domestic resource that contributed to bridge the fiscal deficit. During 1HFY11, domestic source contributed about 90 percent to deficit financing as against 73 percent in 1HFY11, where borrowing from banks increased by a massive 167 percent to Rs285 billion.