ISLAMABAD: Pakistan has spent Rs18486.19 billion (84.65%) out of Rs21837.24 billion total expenditures on repayment of debt and interest payments during fiscal year 2020-21.
According to documents, a high percentage of expenditure 95.74% is expended on general public service which includes 84.65% (18,486.19 billion) on repayment of principal debt and interest payments.
On the other hand, the Federal government left with a meager percentage of 13.99% (Rs3150.65 billion) of total expenditure for socio economic functions other than general public service though it is comparatively higher than last year 7.81% (Rs3846.443 billion).
Document shows that the percentage of Defence Affairs & Services was 0.03% (Rs5.98 billion) out of total expenditures as per the Federal audit jurisdiction, Public order and safety affairs 0.86% (Rs187.95 billion), Economic Affairs 1.20% (Rs262.01 billion), Environmental protections 0.03% (Rs6.38 billion) , Housing and Community amenities 0.04% (Rs8.59 billion), Health 0.23% (Rs51.21 billion), Recreation, Culture and religion 0.05% (Rs11.68 billion), Education 0.57% (Rs124 billion) and social protection 1.24% (Rs271.09 billion).
Over the past five years there has been a gradual decrease in domestic floating debt from Rs14.13 trillion to Rs13.81 trillion. However, this year there was a reasonable dip in receipt of domestic floating debt that declined to Rs13.81 trillion as compared to last year’s receipt of Rs14.13 trillion.
Domestic permanent debt also decreased to Rs0.96 trillion as compared to Rs1.23 trillion last year and foreign debt decreased from Rs1.36 trillion to Rs0.96 trillion last year.
Federal government is reducing the floating debt and mainly relying on domestic permanent debt in the total debt mix.
The retirement of debt shows that this year the federal government paid off Rs13.81 trillion of floating debt, Rs0.96 trillion of domestic permanent debt as well as Rs0.96 trillion of foreign debt.
To meet its expenditure, the federal government mainly relied on borrowings in the shape of public debt which contributed Rs19965.38 billion (84.60%) of total receipt. There is less reliance on borrowings as compared to last year when the public debt to the tune of Rs19432.39 billion (85.59%) was part of the total receipts. Receipts of the public debt are further divided into domestic floating debt, domestic permanent debt and foreign debt.
The total tax receipts for the financial year 2020-21 are Rs3472.10 billion in comparison to last year’s Rs4209.696 billion. Provincial share under NFC award amounting to Rs2644.627 billion was transferred to provinces leaving behind Rs2057.582 billion for the federal government. This was Rs149.80 billion less than the original target of Rs2207.383 billion though Rs727 billion more than the last year collection of Rs1479.857 billion.
There was a nominal growth in sales tax, Federal Excise and Income tax receipts, Customs duty and other increased to Rs2057.582 billion when compared with the previous financial year 2019-20.
According to the Economic Survey of Pakistan, an amount of Rs1149.95 billion (27% of tax receipt) was booked as tax expenditure which was a lost opportunity. Last year the amount booked as tax expenditure was Rs1314.273 billion which was 37.85% of the tax receipt.
On the other hand, the government is experiencing a decline in the receipt of Defence services and other non-tax receipts.
Strenuous efforts are required to increase the non tax receipts of the government as well as the tax receipts in order to reduce dependency on debt.