The government has finalized an outlay of Rs 2.975 trillion for the federal budget for the next fiscal year with a tax collection target of Rs 2.338 trillion, including generating Rs 85 billion more in revenue through broadening of the tax base and administrative measures.
An official source said the government would continue fiscal consolidation efforts in the next fiscal year. The government has finalized a fiscal deficit target of five percent of the GDP or Rs 1.2 trillion. The provinces will be asked to create budget surplus of Rs 112 billion to help the federal government contain fiscal deficit at the projected level. The target for the non-tax revenue is increased from the initially proposed target of Rs 562 billion to Rs 737 billion.
About the increase in salary and pension of civil servants, the source said an increase of 25 percent and 30 percent was proposed but the final decision would be made by the federal cabinet. Provinces will be getting 18 percent more share from the federal taxes, as the Centre had estimated transfer of Rs 1.427 trillion in the next fiscal year against the projection of Rs 1.245 trillion in the current fiscal year. Debt servicing and debt repayment are estimated at Rs 933 billion in the next fiscal year.
About the federal Public Sector Development Program, he said Rs 360 billion had been allocated and Rs 100 billion would be spent on development projects outside the PSDP making a total of Rs 460 billion for the next fiscal year.
The source said the subsidies for the next fiscal year had been estimated to increase from the current fiscal year target of Rs 120 billion to Rs 150 billion. The main subsidy is kept for the power sector while Rs 20 billion will be given in fertilizer subsidy due to the shortage of natural gas. Benazir Income Support Program (BISP) allocation is set at Rs 60 billion and new initiatives would be taken for poverty reduction. The grants to provinces and special areas have been set at Rs 60 billion. About the tariff rationalization plan, he said it would be part of the three year trade policy 2012-15 along with the national import regime policy, which was still being discussed.
