ISLAMABAD—Due to strict fiscal discipline maintained by the government, the broad economic parameters are showing progress as 4 percent growth in Gross Domestic Product (GDP) is expected as against the revised targets of 3.5 percent during the current financial year.
“The government has not borrowed any money from the International Monetary Fund (IMF) from May 2010 and retirement of debt will be started from February 24 (Friday)”, Advisor to Prime Minister on Finance, Revenue and Economic Affairs, Dr. Abdul Hafeez Shaikh told journalists on Thursday.
He said that the country has witnessed decrease in Consumer Price Index (CPI) of 10.7 percent during the first seven months of the current financial year as compared to 14.3 percent in corresponding period of last year fiscal year. Dr. Hafeez said that food inflation dropped from 19.3 percent to 11.5 percent during the period under review, while exports from the country increased by 7.2 percent during the period from July-January 2012.
He said that foreign remittances registered a growth of 21 percent and recorded at US$ 16.8 billion stabilizing the foreign exchange reserves. Fiscal deficit was contained at 3.1 percent of GDP from July 2011 to January 2012 which shows a decline from 3.4 percent in the corresponding period of last year, he added.
He said that revenues registered growth of 27 percent during July-January, 2012 and reached Rs 972 billion as against 772 billion last year showing an increase of 26 percent. Total federal expenditure was limited to 53 percent of the budget as against proportionate budget target of 58 percent demonstrating the federal government’s austerity drive and resulting in the savings of 5 percent of the budget, he added.
He said that the total federal development releases during the period under review amounted to Rs 202 billion including the foreign project aid disbursement of Rs 60 billion. The government is committed to maintain the Public Sector Development Programme annual target of Rs 300 billion which is an increase of about 30 percent over the last fiscal year’s actual spending, he added.
The Advisor said that about 74 percent out of total PSDP has already been released, whereas the provinces have also been provided additional resources under the NFC Award to provide more civic facilities to the masses. He urged the federating units to play their due role in resource generation by broadening the tax base to achieve the destination of self-reliance.
Rs. 1000 billion subsidy was provided to the power sector during last four years as the oil prices in the international market witnessed swift increase in the prices, he said. Hafeez Shaikh said that the government had set receipt target of Rs 120 billion as petroleum levy. It received only Rs 31 billion on this count till date while it provided Rs. 45 billion as subsidy, he added.
Besides, he said that the government has also disbursed Rs. 52 billion among the needy under the Benazir Income Support Programme. Secretary Finance Wajid Rana informed the newsmen that inflows in the country were recorded at US$ 1300 million during the first seven months of current financial year against US$ 1037 million during the same period last year. The net-flows during the period under review were recorded at US$ 482 million against US$ 46 million during the corresponding period of last year, he added.