Budget deficit- Orders passed by Finance Ministry to block Government cheques
- By Sunaa Ansari -
- Jul 04, 2018
ISLAMABAD: The State Bank of Pakistan (SBP) & the Accountant General of Pakistan Revenue (AGPR) are ordered by the Finance Ministry to wedge clearance of all government issued cheques, as budget discrepancy in last year of PML-N government is of around Rs2.4 trillion, marking a new record in the history.
According to sources, the finance Ministry has passed clear instructions to the State Bank of Pakistan (SBP), so that the message can be conveyed to National Bank of Pakistan (NBP) and then further be announced to all banks and related institutions for not honoring any cheques on 30th June 2018, which was last day of fiscal year 2017-18
The verbal orders from Finance Ministry were not accepted by the authorities of SBP. However, these majors were vital in order to save the sinking situations related to deficit and its effects on the economy. As of now the deficits are neck to neck and all the payments are done from treasury accounts.
The observation from the report shows that budget shortfall can be increased to Rs2.45 trillion or 7.1% of the Gross Domestic Product (GDP) for the fiscal year 2017-18, and it does not even contain the debt occurring from power division.
The budget deficit in fiscal year 2012-13, was Rs1.4 trillion which was only 6% of GDP.
The huge difference in the budget insufficiency is due to extravagance of Punjab, no financial control of government, and enormous dearth FBR’s tax revenue.
PML-N had no check and balance for anything related to finances and their allocations, their tenure concluded on May 31, and many cheques were issued for the month of June before leaving, causing an overdraft of around Rs59 billion by the Punjab government till June 28.
These underperformances created hype for the interim government, as they are held responsible for their new actions related to price hike for power & energy sectors.
Also FBR was unsuccessful to achieve their modified revenue collection target of Rs3.935 trillion. Although tax amnesty scheme was also introduced, but still FBR till now has collected less than Rs3.77 trillion only.
It is also observed from past records that previous legislature had allowed budget deficit objective by Rs1.4 trillion for fiscal year 2017-18, but this time the situation is very difficult, as the actual deficit is coming out to be 70% more than the targeted collections.