ISLAMABAD: The government claims that fiscal sector’s strong growth in revenues relative to expenditures in the first half of FY19 helped contain the fiscal deficit to 2.3 per cent of GDP, down from 2.5pc in the same period last year.

The Economic Survey 2017-18 says the total expenditure increased by 14pc during July-December FY18 to Rs3,181 billion — 9.2pc of GDP — against Rs2,789.7bn or 8.7pc in the corresponding period of last year.

Within total expenditure, the development spending - without net lending - increased by 23.4pc to reach Rs613.8bn during July-December FY18 as compared to Rs497.4bn in the first six months of FY17.

Public Sector Development Programme’s spending rose to Rs558.8bn during the first half of FY18 as against Rs445.7bn during the comparable period of 2016-17. The development budget has been an important driver of growth under the PML-N government.

On the other hand, current expenditure grew by 13.5pc to Rs2,545.2bn during July-December FY18 due to increase of 12.4pc and 15.8 in federal and provincial governments’ current expenditures. The government emphasised that during their tenure, these expenditures were kept in check and in some years even shrank when adjusted for inflation.

At the same time, improved collections of both tax and non-tax revenues contributed to the rise in the total proceeds. The survey says that during the first nine months of 2017-18, Federal Bureau of Revenue has been able to collect around Rs2,626.6bn versus Rs 2,268.7bn during the same period of FY17, posting a growth of 15.8pc. Revenue collection “more than doubled” during their tenure, claimed Miftah Ismail during his presentation of the data.

Provincial surpluses also increased considerably in the same period, with a cumulative Rs203.9bn against Rs90.6bn in the same period of FY17. The higher surplus by the provinces was achieved because of growth in total revenues to Rs1,363.8bn during July-December FY18 from Rs 1,064.2bn in the same period of 2016-17.

Published in Dawn, April 27th, 2018