Budget 2018-19 To Be Announced Today
Budget 2018-19 To Be Announced Today: The ruling government of Pakistan is going to reveal their 6th consecutive budget close to Rs.5.5 trillion in the National Assembly today. The biggest challenge facing the country in the next fiscal year is the rising current account deficit, fixing of crashed foreign reserves and meeting obligations of debt servicing.
Prime Minister’s Adviser on Finance Dr Miftah Ismail will deliver his budget speech in the house.
NFC Award
For the National Finance Commission (NFC) Award the range for the provinces is of Rs.2.6 to Rs.2.7 trillion which will make the federal government left with the option to meet expenditure of debt servicing.
Budget Expenditure And Rising Debt Scenario
Three Ds which includes Debt servicing, Defense and Development, are mainly the expenditure of budget, out of these only Debt servicing will collect Rs.1.6 trillion in the coming fiscal year.
For Defense requirement the government was going to allocate Rs.1.1 trillion with additional Rs.100 billion for the Armed Forces Development Program so total defense budget would be flying around Rs.1.2 trillion.
For Development, there is a disagreement over the size of Public Sector Development Program (PSDP) as the Ministry of Finance indicated budget of Rs.800 billion for development but the Ministry of Planning took it up to Rs.1,030 billion.
Pension Bill
Rs.340 billion has been suggested for pension in the coming budget against revised estimates of Rs.320 billion for outgoing fiscal year. Pensions and government employees salaries are expected to raise by 10 to 15%.
Loans From External & Internal Resources
The government aims to obtain loans from internal and external avenues in the range of Rs.2,000 billion to finance its budget deficit.
Circular Debts And Public Sector Enterprises (PSEs)
Circular debts arise from operations in the energy and other sectors – e.g. commodity financing. And the periodic expenditures are required to support loss-making public sector enterprises (PSEs). There is no approval present in the approved budget for such expenditures.
Fiscal Deficit
The increased fiscal deficit would push up burden on current account deficit owing to demands for imports.
Experts are claiming the upcoming budget to be fragile and will get strong backlash from the opposition parties. If it is being presented for political gains it will bring huge macroeconomic instability in the country.
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