ISLAMABAD: Owing to the higher tax collections, the amount transferred by the federal government to the provinces has increased substantially by over 37 percent during the first quarter of the current fiscal year (2017-18).
The federal government transferred an amount of Rs570 billion, including arrears, to the provinces during the current fiscal year compared to the transfers of Rs416 billion during last year, according to latest data.
The revenue collections during the first quarter of the current fiscal year increased to Rs765 billion, showing robust growth of over 20 percent over the same period of last fiscal year.
Finance Minister Senator Mohammad Ishaq Dar, while reviewing the fiscal performance during a meeting held here, expressed satisfaction over the growth in revenue, collections by the FBR and appreciated the measures taken to achieve fiscal prudence in the first quarter.
Secretary Finance Shahid Mehmood briefed the meeting that as against total expenditure of Rs 914 billion in the first quarter last year, the federal government spent Rs 894 billion in the first quarter this year, despite the fact that increased investments were carried out through the development budget.
The overall budget deficit was recorded at Rs 324 billion in the first quarter this year as compared to Rs 438 billion in the same period last year, which was made possible through robust tax collections and lower expenditure.
In terms of Gross Domestic Product (GDP), the overall deficit decreased to 0.9 per cent during the period under review as compared to 1.3 per cent last year. “Reduced fiscal deficit means lower public debt accumulation which supports alignment to targets defined in the amended Fiscal Responsibility and Debt Limitations Act,” the secretary said.
On the occasion, Ishaq Dar reiterated the government’s resolve to continue fiscal discipline and directed officials to ensure achievement of fiscal targets in the remaining three quarters of the current fiscal year.
Commending inflation containment, low interest rates, positive and strong growth in large-scale manufacturing, recent increase in exports and remittances, the finance minister stressed the need to maintain focus on acceleration of economic growth for continued reduction in unemployment and poverty.
