Finance Division spokesman dismisses contentions of an article


ISLAMABAD, Nov 3(APP):The Finance Division spokesman on Friday dismissed contentions of an article/analysis “A ticking economic bomb” carried by a section of media on October 30 and said that the writer’s claim on data manipulation is baseless.
The present government believes in complete transparency and has all along been sharing the data in the areas of economic growth, revenues, expenditures, budget deficit, debt and external accounts with its development partners and other financial institutions. All the data is regularly posted on their respective websites, the spokesman said.
With regard to fiscal deficit, it is stated that fiscal sector of the economy has witnessed a notable improvement on account of contained expenditures and increased revenues. When the present government came into power, fiscal deficit was 8.2 percent of the GDP, which has been reduced to 5.8 percent during 2016-17 and for the 2017-18 it has been budgeted at 4.1 percent of GDP. Based on available provisional numbers, fiscal outcome for Q1 is very encouraging. The achievements of the present government on fiscal side are given as under:-
·         Total revenue to GDP ratio during the year 2012-13 was 13.3 percent of GDP which has been increased to 15.5 percent of GDP during 2016-17.
·         Overall tax collection grew from 9.8 percent of GDP in 2012-13 to 12.5 percent of GDP during 2016-17.
·         FBR tax collection in 2012-13 was 8.7 percent of GDP which has been increased to 10.5 percent of GDP during 2016-17.
·         Total expenditure was 21 percent of GDP in 2012-13 which are more or less at the same level.
·         Federal PSDP was 1.4 percent of GDP (Rs.323 billion) in 2012-13, during 2016-17 it was at 2.3 percent of GDP (Rs.725 billion).
·         Social safety spending (BISP) has also been increased considerably from Rs.40 billion to Rs.112 billion in 2016-17.
·         Defence spending for the year 2012-13 were 2.4 percent of GDP (Rs.541 billion) while during 2016-17 it was 2.8 percent of GDP (Rs.888 billion).
·         During the year 2012-13 there was no allocation for TDPs and Security Enhancement while during the present government regime an amount of Rs.100 billion is being budgeted (.0.3 percent of GDP) on annual basis.
From the above facts it can safely be concluded that tax revenue including FBR collection has significantly improved while total expenditures are at the same level. But expenditures on account of PSDP, TDPs, Security Enhancement, BISP and Defence Spending have significantly been increased.  Therefore, writer’s assertion is not correct.
With regard to the claims of not including Rs.400 billion circular debt in budget deficit, it is to mention that budget deficit is worked out based on internationally recognized accounting principles and later data is shared with development partners. The power sector payables or receivables and financial liabilities of PSEs are not a direct charge on the federal consolidated fund and are accordingly not accounted for while calculating the budget deficit number.
With regard to total debt, it is to mention that total debt of the government stood at Rs.19.6 trillion at end June 2017, as opposed to Rs.22.2 trillion as claimed by the writer.
Further fiscal and debt policy statements are laid before the National Assembly by the end of January each year in accordance with (FRDL) Act. Giving a statement that fiscal and debt policy statements were not announced by June 30 this year is totally incorrect and lacks understanding on writer’s part, the spokesman added.