Federal government has unveiled Rs4,778 billion budget for the fiscal year 2017-18. Finance Minister Ishaq Dar on Friday said that it is a great achievement of incumbent government to present its fifth budget of the tenure. Government proposed Rs 2.113 trillion for Public Sector Development Programme which would be utilised for various ongoing and new development schemes. PSDP allocations showed an increase of 26.14 per cent in comparison with last year’s allocation.
In his address in the parliament Ishaq Dar while telling the growth story of the country claimed that incumbent government has turned the economy around. But sadly, his statement is not backed by the economic statistic.
Government has failed to achieve its target of tax collections. Four years before, exports of the country were around 25 billion which has been reduced to 20 billion; exports have declined by $3 billion than last year. Despite various initiatives to improve debt situation, Pakistan’s present tax to GDP ratio stands at a dispiriting 12.4 percent. Education and health sectors once again received insufficient allocations of funds. Less than one percent of GDP has been allocated for health sector while the world average is around ten percent. Expenditures on health sector during 2016-17 remained as little as 0.46pc of the GDP.
Government missed the target of 5.7% as GDP could witness 5.3 percent growth in the fiscal year 2016-17. From a figure of Rs14.3 trillion in 2013, the national debt now stands at Rs20.8 trillion, less than 60% of the GDP. The outstanding foreign debt stands at USD 58.4 billion while the number was USD 48 billion in June 2013. The USD 10.4 billion hike was experienced in a matter of less than four years during PML-N government. Pakistan was to pay foreign debt worth Rs. 6,126 billion in 2008 which has now escalated to Rs. 20,872 billion. Trade deficit target of Rs20.4bn is missed, with the actual deficit widening to Rs24bn. Estimates suggest that this year’s current account deficit rose by 42% compared to last year. Trade deficit and borrowing have reached record highs, exports are down, remittances are falling and FDI is plummeting.
Without radical reforms sound fiscal consolidation can’t be achieved.