Budget in Brief 2018-19
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Page 1
PREFACE
Budget in Brief presents an abridgement of the Federal Budget 2018-19.
It provides aggregated information on revenues and expenditures, budgeted for
fiscal year 2018-19 alongwith budget estimates and revised estimates for the
outgoing fiscal year 2017-18. Detailed information is available in the relevant
budget documents. Budgeting and accounting classification system used in the
budget remains the same, which was adopted under the New Accounting
Model introduced in fiscal year 2004-05.
The Medium Term Budgetary Framework (MTBF) process, initiated in
the fiscal year 2009-10, has been strengthened. Indicative Budget Ceilings for
the current and development budgets are issued to all Principal Accounting
Officers of the Federal Government on a three-year rolling basis. The annual
budget estimates for any fiscal year (e.g. 2018-19) are then finalised in
consultation with various Federal Ministries. Linkage between allocations and
public service delivery have been established through Output Based
Budgeting. Performance of Federal Ministries/Divisions have been monitored
against precisely defined key performance indicators.
This document also includes medium term macroeconomic indicators to
provide strategic economic perspective, and contextualize the Budget 2018-19.
For the convenience of readers, some additional information regarding
subsidies, loans and advances and public sector development programme has
been shown separately. After approval by the parliament, all budget books,
including the Budget in Brief, will be uploaded on the website of the Ministry of
Finance: www.finance.gov.pk.
‘Budget at a Glance’ given at the end of this document offers a quick
overview of the federal budget. I hope that this document will be beneficial to all
those, who seek a simple and clear understanding of Budget 2018-19.
Arif Ahmed Khan
Secretary to the Government of Pakistan
Finance Division
Islamabad, the 27th April, 2018Page 2
C O N T E N T S
Page
Chapter 1: Review of the Budget 2017-18 1
Salient Features 1
Summary - Budget and Revised Estimates 2
Resources 3
- Internal Resources 3
• Net Revenue Receipts 3
• Net Capital Receipts 4
• Estimated Provincial Surplus 4
- External Resources 5
Expenditure 6
- Current 6
- Development 6
Chapter 2: The Budget 2018-19 7
Salient Features 7
Comparative Budgetary Position 8
Chapter 3: Resource Position 2018-19 9
- Internal Resources 10
• Net Revenue Receipts 10
• Net Capital Receipts 13
• Estimated Provincial Surplus 13
- External Resources 14
Chapter 4: Provincial Share in Federal Taxes 15
NFC Award 15
President's Order No. 5 of 2010 16
President's Order No. 6 of 2015 20
Details of Provincial Share in Federal Taxes 21
Net Federal Transfers to Provinces 22
Chapter 5: Current Expenditure 2018-19 23
Current Expenditure (Summary) 23
Comparative Position (Comparison) 24
General Public Service 25
Defence Affairs and Services 26
_______________________________________________________________
Contd.........Page 3
C O N T E N T S
Public Order and Safety Affairs 27
Economic Affairs 28
Environment Protection 29
Housing and Community Amenities 29
Health Affairs and Services 30
Recreational, Culture and Religion 31
Education Affairs and Services 32
Social Protection 33
Chapter 6: Subsidies & Grants/Transfers 34
Details of Subsidies 34
Details of Grants and Transfers 36
Chapter 7: Loans and Investments 38
Current Loans and Advances 38
Development Loans and Advances 39
Current Investments 40
Chapter 8: Public Sector Development Programme 41
Salient Features of PSDP 41
Size of PSDP 42
Development Expenditure Outside PSDP 45
Chapter 9: Medium Term Budgetary Framework (MTBF) 46
Budget Strategy Paper 46
Performance Budgeting 46
Performance Monitoring 47
Budget Preparation Process 47
Macroeconomic Indicators 48
Chapter 10: Climate Change Budgeting 49
Working of Fiscal Deficit and Financing for
Budget 2018-19 51
Budget at a Glance for the Fiscal Year 2018-19 53
Glossary of Terms 55
________________________________________________________________Page 4
CHAPTER - 1
REVIEW OF THE BUDGET 2017-18
SALIENT FEATURES
1.1 The budget 2017-18 had the following salient features:
a) The total outlay of budget 2017-18 was Rs 5,103.8 billion. This size was higher
by 4.3% than the size of budget 2016-17. The size of outlay increased to Rs
5,361 billion in revised estimates 2017-18.
b) The resource availability during 2017-18 had been estimated at Rs 4,713.7
billion, which increased to Rs 4,774.6 billion or by 1.3% in revised estimates
2017-18.
c) The net revenue receipts for 2017-18 had been estimated at Rs 2,926.1 billion,
which decreased to Rs 2,676.4 billion or by 8.5% in revised estimates 2017-18.
d) The provincial share in federal revenue receipts was estimated at Rs 2,384.2
billion during 2017-18, which decreased to Rs 2,316.1 billion in revised
estimates.
e) The net capital receipts for 2017-18 had been estimated at Rs 552.5 billion,
which increased to Rs 594.6 billion in revised estimates 2017-18 or by 7.6%.
f) The external receipts in 2017-18 were estimated at Rs 837.8 billion, which
increased to Rs 1,229.8 billion in revised estimates or by 46.8%.
g) The overall expenditure during 2017-18 had been estimated at Rs 5,103.8
billion, out of which the share of current expenditure was Rs 3,763.7 billion and
that of development expenditure was Rs 1,340.1 billion. Current expenditure in
revised estimates 2017-18 showed an increase of Rs 534.6 billion from budget
estimates, while development expenditure showed a decline of Rs 277.3 billion.
h) The share of current expenditure in total budgetary outlay for 2017-18 was
73.7% as compared to 80.2% in revised estimates 2017-18.
i) The expenditure on general public service for budget 2017-18 was estimated at
Rs 2,553.6 billion, which was 67.9% of the total current expenditure.
j) In budget 2017-18, the development expenditure outside Public Sector
Development Programme (PSDP) was estimated at Rs 152.2 billion, which
increased to Rs 153.2 billion in revised estimates 2017-18.Page 5
k) The size of Public Sector Development Programme (PSDP) for 2017-18 was Rs
2,113 billion. Out of this, Rs 1,112 billion was allocated to provinces. Federal
PSDP was estimated at Rs 1,001 billion, out of which Rs 377.9 billion for Federal
Ministries/Divisions, Rs 380.6 billion for Corporations, Rs 30 billion for Prime
Minister's Global SDGs Achievement Programme, Rs 40 billion for Special
Federal Development Programme, Rs 12.5 billion for Energy for All, Rs 12.5
billion for Clean Drinking Water for all, Rs 7.5 billion for Earthquake
Reconstruction and Rehabilitation Authority (ERRA), Rs 5 billion for Special
Provision for Competition of CPEC Projects, Rs 45 billion for Relief and
Rehabilitation of IDPs, Rs 45 billion for Security Enhancement, Rs 20 billion for
Prime Minister's Youth Initiative and Rs 25 billion for Gas Infrastructure
Development Cess.
l) To meet expenditure in fiscal year 2017-18, bank borrowing was projected at
Rs 390.1 billion, which has been revised upwards to Rs 586.5 billion.
1.2 Table-1 below presents a Summary of comparative position of the budget and
revised estimates for fiscal year 2017-18:
TABLE - 1
SUMMARY OF ESTIMATES FOR 2017-18
(Rs in Million)
Budget Revised
Classification
2017-18 2017-18
RESOURCES (A + B + C) 4,713,686 4,774,567
A Internal Resources 3,825,863 3,544,812
- Net Revenue Receipts 2,926,074 2,676,407
- Net Capital Receipts 552,520 594,554
- Estimated Provincial Surplus 347,269 273,852
B External Resources 837,824 1,229,754
C Privatization Proceeds 50,000 0
EXPENDITURE (I + II) 5,103,780 5,361,038
I Current Expenditure on Revenue Account 3,763,709 4,298,279
- Current Exp. on Revenue Receipts 3,763,709 4,298,279
II Development Expenditure 1,340,072 1,062,759
- Federal PSDP 1,001,000 750,000
- Development Expenditure outside PSDP 152,200 153,174
- Development Loans & Grants to Provinces 186,871 159,585
BANK BORROWING 390,094 586,472Page 6
RESOURCES
INTERNAL RESOURCES
1.3 The internal resources come through net revenue receipts, capital receipts and
estimated provincial surplus. Table-2 provides the details of budget and revised
estimates for 2017-18 in respect of net revenue receipts, while Table-3 provides the
details of net capital receipts.
NET REVENUE RECEIPTS
1.4 After the share of Provinces in gross revenue is transferred, the net revenue
receipts of Federal Government were estimated at Rs 2,926,074 million in the budget
2017-18, which have now been revised downwards to Rs 2,676,407 million in the
revised estimates 2017-18 showing a decrease of 8.5%. Table-2 provides the details:
TABLE - 2
NET REVENUE RECEIPTS
2017-18
(Rs in Million)
Budget Revised
Classification
2017-18 2017-18
TAX REVENUE ( A + B) 4,330,463 4,147,305
A. FBR TAXES 4,013,000 3,935,000
- Direct Taxes 1,594,910 1,563,000
- Indirect Taxes 2,418,090 2,372,000
B. OTHER TAXES 317,463 212,305
NON-TAX REVENUE 979,854 845,182
- Income from Property and Enterprise 214,689 236,429
- Receipts from Civil Administration and Other
Functions 413,172 284,459
- Miscellaneous Receipts 351,992 324,294
Gross Revenue Receipts 5,310,317 4,992,486
Provincial Share in Gross Revenue 2,384,243 2,316,080
NET REVENUE RECEIPTS 2,926,074 2,676,407Page 7
1.5 The tax revenue was estimated for budget 2017-18 at Rs 4,330,463 million,
which decreased to Rs 4,147,305 million or by 4.2% in revised estimates 2017-18.
The non-tax revenue for 2017-18 was estimated at Rs 979,854 million, which
decreased to Rs 845,182 million or by 13.7% in revised estimates 2017-18.
NET CAPITAL RECEIPTS
1.6 These receipts comprise proceeds of borrowing, money received in repayment
of loans, recoveries of advances/investments, proceeds of saving schemes, net
receipts from transactions under deposits and remittances heads. The net capital
receipts for the fiscal year 2017-18 were budgeted at Rs 552,520 million. The revised
estimates are Rs 594,554 million, which indicates an increase of 7.6%. Table-3
provides the details:
TABLE - 3
NET CAPITAL RECEIPTS
2017-18
(Rs in Million)
Budget Revised Classification 2017-18 2017-18
I. CAPITAL RECEIPTS ( A + B + C ) 640,567 746,439
A. Recovery of Loans 112,537 134,415
B. Public Debt (Net) 314,937 543,408
- Permanent Debt 184,937 59,130
- Floating Debt 130,000 484,278
C. Public Account 213,093 68,616
II. DISBURSEMENTS 88,047 151,886
NET CAPITAL RECEIPTS (I-II): 552,520 594,554
ESTIMATED PROVINCIAL SURPLUS
1.7 The estimated provincial surplus was budgeted at Rs 347,269 million for
2017-18, which decreased to Rs 273,852 million in revised estimates 2017-18 or by
21.1%.Page 8
EXTERNAL RESOURCES
1.8 The Government obtains foreign loans and grants to use for capital and
development expenditure. The external loans for 2017-18 were budgeted at
Rs 799,920 million, which are now projected at Rs 1,181,725 million in revised
estimates showing an increase of 47.7%.
1.9 External grants decreased from Rs 26,810 million in the budget estimates
2017-18 to Rs 21,098 million in the revised estimates 2017-18 or by 21.3%.
1.10 Overall external resources were estimated at Rs 837,824 million, which
increased to Rs 1,229,754 million or by 46.8% in the revised estimates 2017-18.
Table-4 below presents the details:
TABLE - 4
EXTERNAL RESOURCES
2017-18
(Rs in Million)
Budget Revised
Classification
2017-18 2017-18
I. EXTERNAL LOANS ( a to d ) 799,920 1,181,725
a. Project Loans 329,824 312,880
b. Programme Loans 95,571 48,107
d. Other Aid 374,525 820,738
II. EXTERNAL GRANTS 26,810 21,098
A. EXTERNAL RESOURCES (I + II): 826,730 1,202,823
B. PROJECT LOANS & GRANTS OUTSIDE PSDP 11,093 26,932
Loans 10,822 22,030
Grants 271 4,902
TOTAL EXTERNAL RESOURCES (A + B): 837,824 1,229,754Page 9
EXPENDITURE
1.11 The budget estimates 2017-18 of the overall expenditure were Rs 5,103,780
million, which increased to Rs 5,361,038 million in revised estimates 2017-18 or by
5%.
1.12 The components of expenditure are current and development. Table-5 below
shows the comparative position of the budget and revised estimates of current and
development expenditure for the fiscal year 2017-18:
TABLE - 5
CURRENT AND DEVELOPMENT EXPENDITURE
2017-18
(Rs in Million)
Budget Revised
Classification 2017-18 2017-18
A. CURRENT 3,763,709 4,298,279
- General Public Service 2,553,633 2,977,275
- Defence Affairs & Services 920,166 999,237
- Public Order and Safety Affairs 109,604 119,417
- Economic Affairs 62,940 80,742
- Environment Protection 1,141 1,228
- Housing and Community Amenities 2,329 2,449
- Health Affairs & Services 12,847 12,944
- Recreation, Culture and Religion 8,434 11,866
- Education Affairs and Services 90,516 90,818
- Social Protection 2,100 2,302
B. DEVELOPMENT 1,340,072 1,062,759
- Federal PSDP 1,001,000 750,000
- Development Expenditure outside PSDP 152,200 153,174
- Development Loans & Grants to Provinces 186,871 159,585
TOTAL EXPENDITURE (A + B): 5,103,780 5,361,038Page 10
CHAPTER - 2
THE BUDGET 2018-19
SALIENT FEATURES
2.1 The budget 2018-19 has the following salient features:
a) The total outlay of budget 2018-19 is Rs 5,932.5 billion. This size is 16.2%
higher than the size of budget estimates 2017-18.
b) The resource availability during 2018-19 has been estimated at Rs 4,917.2
billion against Rs 4,713.7 billion in the budget estimates of 2017-18.
c) The net revenue receipts for 2018-19 have been estimated at Rs 3,070.4 billion
indicating an increase of 4.9% over the budget estimates of 2017-18.
d) The provincial share in federal taxes is estimated at Rs 2,590.1 billion during
2018-19, which is 8.6% higher than the budget estimates for 2017-18.
e) The net capital receipts for 2018-19 have been estimated at Rs 443.1 billion
against the budget estimates of Rs 552.5 billion in 2017-18 i.e. a decrease of
19.8%.
f) The external receipts in 2018-19 are estimated at Rs 1,118 billion. This shows
an increase of 33.4% over the budget estimates for 2017-18.
g) The overall expenditure during 2018-19 has been estimated at Rs 5,932.5
billion, out of which the current expenditure is Rs 4,780.4 billion and
development expenditure is Rs 1,152.1 billion.
h) The share of current and development expenditure respectively in total
budgetary outlay for 2018-19 is 80.6% and 19.4%.
i) The expenditure on General Public Services is estimated at Rs 3,340.4 billion,
which is 69.9% of the current expenditure.
j) The development expenditure outside PSDP has been estimated at Rs 180.2
billion in the budget 2018-19, which is higher by 18.4% than budget estimates
2017-18.Page 11
k) The size of Public Sector Development Programme (PSDP) for 2018-19 is
Rs 1,650 billion. Out of this, Rs 850 billion has been allocated to provinces.
Federal PSDP has been estimated at Rs 800 billion, out of which Rs 420.4
billion for Federal Ministries/Divisions, Rs 246.1 billion for Corporations, Rs 5
billion for Pakistan Sustainable Development Goals (SDGs) and Community
Development Programme, Rs 8.5 billion for Earthquake Reconstruction and
Rehabilitation Authority (ERRA), Rs 5 billion for Special Provision for
Competition of CEPEC Projects, Rs 10 billion for FATA 10 year Plan, Rs 45
billion for Relief and Rehabilitation of IDPs, Rs 45 billion for Security
Enhancement, Rs 10 billion for Prime Minister's Youth Programme and Rs 5
billion for Gas Infrastructure Development Cess.
l) To meet expenditure, bank borrowing has been estimated for 2018-19 at Rs
1,015.3 billion, which is significantly higher than revised estimates 2017-18.
2.2 Table-6 below presents the comparative position of budget and revised estimates
for fiscal year 2017-18 and budget estimates for fiscal year 2018-19.
TABLE - 6
COMPARATIVE BUDGETARY POSITION
2017-18 AND 2018-19
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
RESOURCES ( A + B + C ) 4,713,686 4,774,567 4,917,162
A Internal Resources 3,825,863 3,544,812 3,799,139
- Net Revenue Receipts 2,926,074 2,676,407 3,070,439
- Net Capital Receipts 552,520 594,554 443,096
- Estimated Provincial Surplus 347,269 273,852 285,604
B External Resources 837,824 1,229,754 1,118,024
C Privatization Proceeds 50,000 - -
EXPENDITURE (I + II) 5,103,780 5,361,038 5,932,464
I Current Expenditure on Revenue
Account 3,763,709 4,298,279 4,780,359
- Current Exp. on Revenue Account 3,763,709 4,298,279 4,780,359
II Development Expenditure 1,340,072 1,062,759 1,152,105
- Federal PSDP 1,001,000 750,000 800,000
- Dev. Expenditure outside PDSP 152,200 153,174 180,238
- Dev. Loans & Grants to Provinces 186,871 159,585 171,867
BANK BORROWING 390,094 586,472 1,015,302
Total Federal PSDP 2018-19 would be Rs 1,030 billion out of which Rs 230 billion
would be self financing by the corporation/authorities and Rs 800 billion would be
provided through budget 2018-19.Page 12
CHAPTER - 3
RESOURCE POSITION
2018-19
3.1 There are two type of resources i.e. internal and external. The internal
resources comprise of revenue receipts, capital receipts and estimated provincial
surplus. The external resources come from foreign loans and grants. Table-7
below presents the overall comparative resource position for the year 2017-18
(budget and revised) and 2018-19 (budget).
TABLE - 7
RESOURCE POSITION
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
A Internal Resources 3,913,910 3,696,698 4,041,814
I. Net Revenue Receipts [(i) - (ii)] 2,926,074 2,676,407 3,070,439
(i) Gross Revenue Receipts 5,310,317 4,992,486 5,660,505
(ii) Less Provincial Share in Taxes 2,384,243 2,316,080 2,590,066
II. Total Capital Receipts 640,567 746,439 685,770
III. Estimated Provincial Surplus 347,269 273,852 285,604
B External Resources 837,824 1,229,754 1,118,024
TOTAL RESOURCES ( A + B ) 4,751,733 4,926,452 5,159,837Page 13
INTERNAL RESOURCES
I. NET REVENUE RECEIPTS
3.2 The gross revenue receipts in budget 2018-19 are estimated at Rs 5,660,505
million showing an increase of 6.6% over the budget estimates 2017-18 and 13.4%
over revised estimates of outgoing fiscal year 2017-18.
3.3 The provincial share in taxes for 2018-19 is estimated at Rs 2,590,066 million,
which is 11.8% higher than the revised estimates of 2017-18. After the share of
Provinces in gross revenues is transferred, the net revenue of Federal Government
has been estimated to be Rs 3,070,439 million for fiscal year 2018-19.
3.4 The tax revenue for 2018-19 is estimated at Rs 4,888,645 million, which
reflects an increase of 17.9% over revised estimates 2017-18. Out of which FBR
collection is Rs 4,435,000 million. Non-tax revenue is projected at Rs 771,860
million in 2018-19 as compared with Rs 845,182 million in revised estimates
2017-18.
3.5 Tables 8 to 10 present information on various components of tax revenue and
non-tax revenue.
TABLE - 8
NET REVENUE RECEIPTS
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
TAX REVENUE (A + B) 4,330,463 4,147,305 4,888,645
A. FBR TAXES 4,013,000 3,935,000 4,435,000
- Direct Taxes 1,594,910 1,563,000 1,735,000
- Indirect Taxes 2,418,090 2,372,000 2,700,000
B. OTHER TAXES 317,463 212,305 453,645
NON-TAX REVENUE 979,854 845,182 771,860
- Property and Enterprise 214,689 236,429 236,869
- Civil Administration and Other Functions 413,172 284,459 305,837
- Miscellaneous Receipts 351,992 324,294 229,155
Gross Revenue Receipts 5,310,317 4,992,486 5,660,505
Provincial Share in Gross Revenue 2,384,243 2,316,080 2,590,066
NET REVENUE RECEIPTS 2,926,074 2,676,407 3,070,439Page 14
TABLE - 9
TAX REVENUE
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
A. FBR TAXES (I + II) 4,013,000 3,935,000 4,435,000
I. Direct Taxes 1,594,910 1,563,000 1,735,000
- Income Tax 1,577,557 1,540,423 1,709,939
- Workers Welfare Fund 14,622 16,789 18,636
- Capital Value Tax 2,731 5,788 6,425
II. Indirect Taxes 2,418,090 2,372,000 2,700,000
- Customs Duties 581,371 600,000 735,000
- Sales Tax 1,605,200 1,547,000 1,700,000
- Federal Excise 231,519 225,000 265,000
B. OTHER TAXES 317,463 212,305 453,645
- Other Taxes (ICT) 4,373 4,235 37,555
- Airport Tax 90 70 90
- Gas Infrastructure Development
110,000 15,000 100,000
Cess (GIDC)
- Natural Gas Development
43,000 23,000 16,000
Surcharge
- Petroleum Levy 160,000 170,000 300,000
TOTAL TAX REVENUE: 4,330,463 4,147,305 4,888,645Page 15
TABLE - 10
NON-TAX REVENUE
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
NON-TAX REVENUE (A+B+C) 979,854 845,182 771,860
A. Income from Property and Enterprise 214,689 236,429 236,869
- Pakistan Telecom Authority (Surplus) 1,000 3,029 12,787
- PTA (3 G Licences) 10,000 6,854 6,854
- Regulatory Authorities (Surplus/
penalities) 312 334 325
- Mark up (Provinces) 14,111 16,222 16,782
- Mark up (PSEs & Others) 95,984 130,018 123,649
- Dividends 93,283 79,973 76,471
B. Receipts from Civil Administration
and Other Functions 413,172 284,459 305,837
- General Administration 5,196 5,339 5,754
- SBP Profit 260,000 260,000 280,000
- Defence 141,797 15,204 15,960
- Law and Order 1,501 1,363 1,412
- Community Services 2,070 1,143 1,214
- Social Services 2,608 1,410 1,497
C. Miscellaneous Receipts 351,992 324,294 229,155
- Economic Services 21,381 11,144 8,596
- Foreign Grants 43,546 34,000 15,902
- Citizenship, Naturalization & Passport
Fee 28,000 24,000 31,000
- Discount Retained on Local Crude Price 10,000 10,000 10,000
- Royalty on Crude Oil 19,127 16,811 16,826
- Royalty on Natural Gas 39,404 36,433 36,516
- Windfall Levy against Crude Oil 8,000 5,000 5,000
- Petroleum Levy on LPG 2,000 2,000 2,000
- Extraordinary Receipts (UNO) 36,923 32,384 34,001
- Extraordinary Receipts (Others) 135,056 135,046 50,062
- Others 8,554 17,475 19,252Page 16
II. NET CAPITAL RECEIPTS
3.6 Capital receipts on net basis in the budget 2018-19 have been estimated
at Rs 443,096 million against Rs 552,520 million in the budget estimates 2017-18
and Rs 594,554 million in the revised estimates 2017-18. Table-11 below presents
the details of capital receipts, disbursements and net capital receipts.
TABLE - 11
NET CAPITAL RECEIPTS
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
TOTAL CAPITAL RECEIPTS (I + II) 640,567 746,439 685,770
I. Recoveries of Loans & Advances 112,537 134,415 152,989
- Provinces 51,947 55,076 61,596
- Others 60,590 79,339 91,393
II. CAPITAL RECEIPTS (A + B) 528,030 612,024 532,781
A. Public Debt Net (1 + 2) 314,937 543,408 406,095
1. Permanent Debt 184,937 59,130 113,557
- Pakistan Investment Bonds 115,000 (3,577) 100,000
- Ijara Sukuk Bonds 60,000 60,000 10,620
- FEBCs (5) (1) (5)
- FCBCs (5) (1) (5)
- U.S. Dollar Bearer Certificates (3) - (3)
- Special US Dollar Bonds (50) (40) (50)
- Premium Prize Bonds (Regd.) 10,000 2,749 3,000
2. Floating Debt 130,000 484,278 292,538
- Prize Bonds 85,000 80,981 92,538
- Treasury Bills Auction 45,000 403,297 200,000
B. Public Account 213,093 68,616 126,686
- National Savings Schemes 159,503 71,105 128,698
- G.P. Fund 6,500 1,816 2,000
- Net Deposits 47,090 (4,305) (4,012)
III. DISBURSEMENTS 88,047 151,886 242,675
- Government Investments, Loans,
Advances and Others 48,273 58,314 68,512
- Repayment of Short Term Credits 39,774 93,572 174,163
NET CAPITAL RECEIPTS (I + II - III): 552,520 594,554 443,096
Net Lending to Others: (12,317) (21,025) (22,882)
III. ESTIMATED PROVINCIAL SURPLUS
3.7 The estimated provincial surplus has been projected at Rs 285,604 million for
2018-19 as against Rs 347,269 million in revised estimates 2017-18.Page 17
EXTERNAL RESOURCES
3.8 The government obtains loans and grants to bridge the gap between the
receipts and expenditure. The external resources for 2018-19 have been projected at
Rs 1,118,024 million, which are higher by 33.4% and lower by 9.1% respectively
when compared with budget and revised estimates 2017-18. Table-12 below
presents the details of receipts from external resources.
TABLE - 12
EXTERNAL RESOURCES
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
I. EXTERNAL LOANS (A to C) 799,920 1,181,725 1,079,968
A. Project Loans (i+ii) 329,824 312,880 290,071
i Federal Government 151,984 179,766 152,635
- Ministries/Divisions 13,554 16,640 22,576
- Corporations/Autonomous Bodies 138,430 163,126 130,060
ii Provinces 177,840 133,114 137,435
B. Programme Loans 95,571 48,107 87,897
C. Other Aid 374,525 820,738 702,000
- Islamic Development Bank 163,525 140,068 117,000
- Sukuk Bond 105,500 274,375 234,000
- Commercial Banks 105,500 406,295 351,000
II. EXTERNAL GRANTS 26,810 21,098 29,452
- Project Aid Grants 26,810 21,098 29,452
• Federal Departments 6,184 3,685 6,439
• Autonomous Bodies 3,467 4,003 1,228
• Provinces 17,160 13,410 21,784
D. External Resources (I + II): 826,730 1,202,823 1,109,419
E. Project Loans & Grants Outside
PSDP 11,093 26,932 8,605
Loans 10,822 22,030 8,024
Grants 271 4,902 581
TOTAL EXTERNAL RESOURCES (D+E): 837,824 1,229,754 1,118,024Page 18
CHAPTER - 4
PROVINCIAL SHARE IN FEDERAL TAXES
NFC AWARD
4.1 Pakistan is a Federal democracy. In order to maintain inter-governmental
fiscal relationship, Article 160 of the Constitution provides for setting up of a National
Finance Commission (NFC) with intervals not exceeding five years. The mandate of
NFC is to make recommendations to the President for the distribution of resources
between the Federal and Provincial Governments. The recommendations of the NFC
are given legal cover through a Presidential Order.
4.2 Presently, 7th National Finance Commission (NFC) Award is in practice.
Through this Award, the financial autonomy of the provinces has been ensured by
increasing their share in the Divisible Pool (taxes) from 46.5% to 57.5% from
2011-12 onwards. For the first time in history, multiple indicators were adopted for
distribution of provincial shares (horizontal distribution) in the divisible pool, whereas
in all the previous Awards, population remained as sole criterion for distribution of
provincial share with special grants (subventions) to smaller provinces.
4.3 A special feature of the 7th NFC Award is recognition for requirements of
Balochistan. Its share from the divisible pool was guaranteed at Rs 83 billion in
financial year 2010-11, which was more than double from the actual divisible pool
share of financial year 2009-10. It has also been ensured that Balochistan province
would receive its share in the divisible pool, based on the budgetary projections
instead of actual FBR collection. Shortfall, if any, based on the actual collection,
reported by FBR, is being made up by the Federal Government out of its own share.
This arrangement is in practice since financial year 2011-12 and shall continue till 7th
NFC Award remains in field. In this regard, an amount of Rs 90.150 billion have been
provided to Government of Balochistan, as additionality, from 2010-11 to 2017-18
(upto 30.3.2018).
4.4 The 8th NFC Award was constituted on 21st July, 2010, but it did not give
any Award as the latest Award was just implemented. The 9th NFC was constituted
on 24th April, 2015 and its 1st meeting was held on 28th April, 2015. the 9th NFC, in
its 1st meeting, constituted four working groups to undertake thematic studies to
assist the commission to make its deliberation meaningful. The reports of Working
Groups were presented and discussed in the 3rd meeting of the NFC held on 19th
December, 2016. The deliberations for new NFC Award are under active
consideration. It is expected that new NFC Award would be announced as soon as
the consensus among all stakeholders is arrived. The present Award will remain
operative till a new Award is concluded and implemented.Page 19
4.5 The 7th NFC Award has been given legal cover through President’s Order
No.5 of 2010, which are reproduced as follows:
"PRESIDENT'S ORDER No. 5 of 2010
AN
ORDER
to provide for distribution of revenues and certain grants
WHEREAS in pursuance of clause (1) of Article 160 of the Constitution of the
Islamic Republic of Pakistan hereinafter referred to as the Constitution, the President,
by the Finance Division's Notification No. S.R.O. 739(I)/2005, dated 21st July 2005,
as modified by the said Division's Notification No. S.R.O. 693(I)/2009, dated 24th July
2009, appointed a National Finance Commission to make recommendations, among
other matters, as to the distribution between the Federation and the Provinces of the
net proceeds of certain taxes;
AND WHEREAS the said Commission has also submitted its recommendations
with regard to the said distribution;
NOW, THEREFORE, in pursuance of clauses (4) and (7) of Article 160 of the
Constitution, the President is pleased to make the following Order:-
1. Short title and commencement.- (1) This Order may be called the
Distribution of Revenues and Grants-in-Aid Order, 2010.
(2) It shall come into force on the first day of July, 2010.
2. Definitions.- In this Order, unless there is anything repugnant in the
subject or context,─
(a) "net proceeds" means, in relation to any tax, duty or levy, the proceeds
thereof reduced by the cost of collection as ascertained and certified
by the Auditor General of Pakistan; and
(b) "taxes on income" includes corporation tax but does not include taxes
on income consisting of remuneration paid out of the Federal
Consolidated Fund.Page 20
3. Distribution of Revenues.-(1) The divisible pool taxes in each year shall
consist of the following taxes levied and collected by the Federal Government in that
year, namely:─
(a) taxes on income;
(b) wealth tax;
(c) capital value tax;
(d) taxes on the sales and purchases of goods imported, exported,
produced, manufactured or consumed;
(e) export duties on cotton;
(f) customs duties;
(g) federal excise duties excluding the excise duty on gas charged at
well-head; and
(h) any other tax which may be levied by the Federal Government.
(2) One percent of the net proceeds of divisible pool taxes shall be assigned to
Government of Khyber Pakhtunkhwa to meet the expenses on war on terror.
(3) After deducting the amounts as prescribed in clause (2), of the balance amount
of the net proceeds of divisible pool taxes, fifty-six percent shall be assigned to
provinces during the financial year 2010-11 and fifty-seven and half percent from the
financial year 2011-12 onwards. The share of the Federal Government in the net
proceeds of divisible pool shall be forty-four percent during the financial year 2010-11
and forty-two and half percent from the financial year 2011-12 onwards.
4. Allocation of shares to the Provincial Governments.-(1) The Province -
wise ratios given in clause (2) are based on multiple indicators. The indicators and
their respective weights as agreed upon are:-
(a) Population 82.0%
(b) Poverty or backwardness 10.3%
(c) Revenue collection or generation 5.0%
(d) Inverse population density 2.7%Page 21
(2) The sum assigned to the Provincial Governments under Article 3 shall be
distributed amongst the Provinces on the basis of the percentage specified against
each:─
(a) Balochistan 9.09%
(b) Khyber Pakhtunkhwa 14.62%
(c) Punjab 51.74%
(d) Sindh 24.55%
Total: 100.00%
(3) The Federal Government shall guarantee that Balochistan province shall
receive the projected sum of eighty-three billion rupees from the provincial share in
the net proceeds of divisible pool taxes in the first year of the Award. Any shortfall in
this amount shall be made up by the Federal Government from its own resources.
This arrangement for Balochistan shall remain protected throughout the remaining
four years of the Award based on annual budgetary projections.
5. Payment of net proceeds of royalty on crude oil.─Each of the provinces
shall be paid in each financial year as a share in the net proceeds of the total
royalties on crude oil an amount which bears to the total net proceeds the same
proportion as the production of crude oil in the Province in that year bears to the total
production of crude oil.
6. Payment of net proceeds of development surcharge on natural gas to
the Provinces.─(1) Each of the Provinces shall be paid in each financial year as a
share in the net proceeds to be worked out based on average rate per MMBTU of the
respective province. The average rate per MMBTU shall be derived by notionally
clubbing both the royalty on natural gas and development surcharge on Gas. Royalty
on natural gas shall be distributed in accordance with clause (1) of Article 161 of the
Constitution whereas the development surcharge on natural gas would be distributed
by making adjustments based on this average rate.
(2) The development surcharge on natural gas for Balochistan with effect from
1st July 2002, shall be re-worked out hypothetically on the basis of the formula given
in clause (1) and the amount, subject to maximum of ten billion rupees, shall be paid
in five years in five equal installments by the Federal Government as grants to be
charged on the Federal Consolidated Fund.Page 22
7. Grants-in-Aid to the Provinces.-There shall be charged upon the
Federal Consolidated Fund each year, as grants-in-aid of the revenues of the
province of Sindh an amount equivalent to 0.66% of the provincial share in the net
proceeds of divisible pool as a compensation for the losses on account of abolition of
octroi and zilla tax.
8. Sales tax on services.-NFC recognizes that sales tax on services is a
Provincial subject under the Constitution of the Islamic Republic of Pakistan, and may
be collected by respective Provinces, if they so desired.
9. Miscellaneous.-(1) NFC also recommended increase in the rate of excise
duty on natural gas to Rs 10.0 per MMBTU. Federal Government may initiate
necessary legislation accordingly.
(2) The NFC recommended that the Federal Government and Provincial
Governments should streamline their tax collection systems to reduce leakages and
increase their revenues through efforts to improve taxation in order to achieve a 15%
tax to GDP ratio by the terminal year i.e. 2014-15. Provinces would initiate steps to
effectively tax the agriculture and real estate sectors. Federal Government and
Provincial Governments may take necessary administrative and legislative steps
accordingly.
(3) Federal Government and Provincial Governments would develop and
enforce mechanism for maintaining fiscal discipline at the Federal and Provincial
levels through legislative and administrative measures.
(4) The Federal Government may assist the Provinces through specific grants
in times of unforeseen calamities.
(5) The meetings of the NFC may be convened regularly on a quarterly basis
to monitor implementation of the award in letter and spirit.
10. Repeal.- The Distribution of Revenues and Grants-in-Aid Order, 1997
(P.O. No. 1 of 1997), and the Distribution of Revenues and Grants-in-Aid, Order,
2010 (P.O. 4 of 2010) are hereby repealed.
ASIF ALI ZARDARI,
President."
_________Page 23
“PRESIDENT’S ORDER NO.6 OF 2015
AN
ORDER
To amend Distribution of Revenues and Grants-in-Aid Order, 2010
(President’s Order No. 5 of 2010)
WHEREAS, it is expedient to amend the Distribution of Revenues and Grants-in-Aid
Order, 2010 (P.O.No.5 of 2010), for the purpose hereinafter appearing.
NOW, THEREFORE, in pursuance of Clause (6) read with Clause (7) of Article 160
of the Constitution of the Islamic Republic of Pakistan, the President is pleased to make the
following Order:-
1. Short title and commencement.-(1) This Order may be called the
Distribution of Revenues and Grants-in-Aid (Amendment) Order, 2015.
(2) It shall come into force on the first day of July, 2015.
(3) It will remain in force till further orders.
2. Substitution of Article-4(3) P.O. No.5 of 2010.-In the Distribution of
Revenues and Grants-in-Aid Order, 2010 (P.O.No.5 of 2010), for Article 4(3) the following
shall be substituted, namely:-
(3) The Federal Government shall guarantee that Balochistan province shall
receive the projected sum of eighty-three billion rupees from the provincial
share in the net proceeds of divisible pool taxes in the first year of the
Award and any shortfall in this amount shall be made up by the Federal
Government from its own resources. This arrangement for Balochistan shall
remain protected throughout the Award period based on annual budgetary
projections.
MAMNOON HUSSAIN,
President."
________Page 24
4.6 In accordance with the framework for distribution of resources structured by the
7th NFC Award, provincial share in federal taxes and straight transfers to Provinces
are estimated at Rs 2,590,066 million for fiscal year 2018-19, reflecting an increase
of 11.8% over revised estimates 2017-18. The details are as in Table-13 below:
TABLE - 13
DETAILS OF PROVINCIAL SHARE IN FEDERAL TAXES
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
A. DIVISIBLE POOL TAXES 2,268,999 2,230,087 2,508,834
- Income Tax 895,524 876,327 970,673
- Capital Value Tax 1,566 3,163 3,684
- Sales Tax (Excl. GST on Services) 918,829 888,483 973,084
- Federal Excise
123,554 122,532 144,197
(excl. Excise Duty on Natural Gas)
- Customs Duties
329,526 339,582 417,196
(excl. Export Development Surcharge)
B. STRAIGHT TRANSFERS 115,244 85,993 81,232
- Royalty on Crude Oil 18,745 16,475 16,490
- Royalty on Natural Gas 38,616 35,705 35,785
- Gas Development Surcharge 42,140 22,540 15,680
- Excise Duty on Natural Gas 15,743 11,273 13,277
TOTAL (A to B): 2,384,243 2,316,080 2,590,066
PROVINCE- WISE SHARE
Punjab 1,161,824 1,138,410 1,281,980
Sindh 612,590 584,322 648,813
Khyber Pakhtunkhwa
389,854 381,032 426,095
(Inclusive 1% War on Terror)
Balochistan 219,974 212,316 233,177
TOTAL PROVINCIAL SHARE: 2,384,243 2,316,080 2,590,066Page 25
4.7 Table-14 below presents total net federal transfers to provinces.
TABLE - 14
NET FEDERAL TRANSFERS TO PROVINCES
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
A. Total Transfers to Provinces 2,597,166 2,502,150 2,789,983
- Divisible Pool Taxes 2,268,999 2,230,087 2,508,834
- Straight Transfers 115,244 85,993 81,232
- Special Grants / Subventions 26,000 26,485 28,000
- Project Loans and Grants 177,840 133,114 137,435
- Programme Loans 9,031 26,471 34,431
- Japanese Grant 51 1 50
B. Less Payments to Federal Govt. 66,057 71,298 78,378
- Interest Payments 14,111 16,222 16,782
- Loans Repayments 51,947 55,076 61,596
NET TRANSFERS TO PROVINCES (A-B): 2,531,108 2,430,852 2,711,605
4.8 In accordance with the framework for distribution of resources structured by
the 7th NFC Award, the net transfers to provinces are Rs 2,711,605 million in the
budget estimates 2018-19. These transfers were estimated at Rs 2,531,108 million in
the budget estimates 2017-18 and Rs 2,430,852 million in revised estimates 2017-
18. Of this account, budget for 2018-19 reflecting an increase of 7.1% and 11.6%
over budget and revised estimates 2017-18 respectively.Page 26
CHAPTER - 5
CURRENT EXPENDITURE
2018-19
5.1 Table-15 below presents a summary of current expenditure:
TABLE - 15
SUMMARY
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
(i) Mark-up Payment 1,363,016 1,526,204 1,620,230
- Mark-up on Domestic Debt 1,231,000 1,332,001 1,391,000
- Mark-up on Foreign Debt 132,016 194,203 229,230
(ii) Pension 248,000 333,355 342,000
- Military 180,152 253,000 259,779
- Civil 67,848 80,355 82,221
(iii) Defence Affairs and Services 920,166 999,237 1,100,334
- Defence Services 917,949 995,949 1,097,949
- Defence Administration 2,217 3,288 2,385
(iv) Grants and Transfers 430,230 461,638 477,924
- Grants to Provinces 26,000 26,485 28,000
- Grants to Others 404,230 435,153 449,924
(v) Subsidies 138,846 147,604 174,746
(vi) Running of Civil Government 376,840 402,076 463,371
- Salary 210,735 217,284 242,742
a) Pay 104,348 108,475 128,011
b) Allowance 106,387 108,809 114,731
- Non-Salary 163,605 184,792 218,129
- Others 2,500 - 2,500
CURRENT EXPENDITURE (i to vi) 3,477,097 3,870,114 4,178,605
(vii) Foreign Loans Repayment 286,612 428,165 601,754
TOTAL CURRENT EXPENDITURE
(includes foreign loans repayment) 3,763,709 4,298,279 4,780,359Page 27
5.2 The main components of current expenditure are mark-up on government
borrowing, defense, running of civil government, pension, grants and subsidies.
Estimates for total current expenditure in the budget for fiscal year 2017-18 stood at
Rs 3,763,709 million, which have now been revised upwards to Rs 4,298,279 million.
For fiscal year 2018-19 an allocation of Rs 4,780,358 million has been made for
current expenditure, showing an increase of 27% and 11.2% over the budget and
revised estimates respectively of the outgoing fiscal year 2017-18.
5.3 Table-16 below presents the comparative position of the budget and revised
estimates of current expenditure for the year 2017-18 along with the budget
estimates 2018-19. It shows breakup of Current Expenditure according to functional
classification.
TABLE - 16
CURRENT EXPENDITURE
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
1) General Public Service 2,553,633 2,977,275 3,340,431
2) Defence Affairs and Services 920,166 999,237 1,100,334
3) Public Order and Safety Affairs 109,604 119,417 132,289
4) Economic Affairs 62,940 80,742 80,750
5) Environment Protection 1,141 1,228 1,261
6) Housing and Community Amenities 2,329 2,449 2,339
7) Health Affairs & Services 12,847 12,944 13,897
8) Recreation, Culture and Religion 8,434 11,866 9,242
9) Education Affairs and Services 90,516 90,818 97,420
10) Social Protection 2,100 2,302 2,396
TOTAL: 3,763,709 4,298,279 4,780,359
5.4 The bulk of expenditure falls under General Public Service. The expenditure
against this head has been budgeted at Rs 3,340,431 million for 2018-19, which is
69.9% of current expenditure.Page 28
GENERAL PUBLIC SERVICE
5.5 Under the head of General Public Service, the major portion goes to executive
& legislative organs, financial, fiscal and external affairs. At Rs 2,781,312 million, this
component forms 84.3% of the allocation for General Public Service. The main heads
of expenses are Servicing of Domestic Debt, Foreign Loans Repayment and Others.
Transfer payments constitute another important item.
5.6 The details of expenditures classified under General Public Service are given
in Table-17 below:
TABLE - 17
GENERAL PUBLIC SERVICE
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
GENERAL PUBLIC SERVICE 2,553,633 2,977,275 3,340,431
Executive & Legislative Organs, Financial,
Fiscal Affairs & External Affairs 2,083,532 2,470,428 2,781,312
- Superannuation Allowances & Pensions 248,000 333,355 342,000
- Servicing of Foreign Debt 132,016 194,203 229,230
- Foreign Loans Repayment 286,612 428,165 601,754
- Servicing of Domestic Debt 1,231,000 1,332,001 1,391,000
- Others 185,905 182,703 217,329
Foreign Economic Aid 4,632 4,551 4,762
Transfers 430,230 461,638 477,924
General Services 6,599 6,945 7,027
Basic Research 3,974 4,019 5,438
Research and Development General Public
Services 11,712 12,120 13,072
Administration of General Public Services 2,348 8,999 2,531
General Public Services not elsewhere
defined 10,605 8,576 48,365Page 29
DEFENCE AFFAIRS AND SERVICES
5.7 Details of estimates of expenditure on Defence Affairs and Services in
2017-18 (budget & revised) and 2018-19 (budget) are given in Table-18 below:
TABLE - 18
DEFENCE AFFAIRS AND SERVICES
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
DEFENCE AFFAIRS AND SERVICES 920,166 999,237 1,100,334
- Defence Administration 2,217 3,288 2,385
- Defence Services 917,949 995,949 1,097,949
- Employees Related Expenses 322,142 363,476 422,911
- Operating Expenses 225,521 250,775 253,467
- Physical Assets 243,991 250,419 282,328
- Civil Works 128,346 133,330 141,293
- Less Recoveries (2,051) (2,051) (2,051)Page 30
PUBLIC ORDER AND SAFETY AFFAIRS
5.8 Under the head of Public Order and Safety Affairs, an amount of
Rs 132,289 million has been provided in the budget 2018-19 as compared with Rs
109,604 million in the budget estimates 2017-18 and Rs 119,417 million in revised
estimates of the outgoing fiscal year 2017-18. The allocation for Police (Rs
122,974 million) forms the major component, with a share of 93%, in the total
allocation under this head. Table-19 below provides the details:
TABLE - 19
PUBLIC ORDER AND SAFETY AFFAIRS
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
PUBLIC ORDER AND SAFETY AFFAIRS 109,604 119,417 132,289
- Law Courts 5,174 5,179 5,631
- Police 101,174 110,802 122,974
- Fire Protection 203 203 293
- Prison Administration and Operation 43 43 53
- R & D Public Order and Safety 32 32 36
- Administration of Public Order 2,977 3,157 3,302Page 31
ECONOMIC AFFAIRS
5.9 The allocation under the head of Economic Affairs in the budget 2018-19 has
been projected at Rs 80,750 million, as compared with Rs 62,940 million in the
budget estimates 2017-18 and Rs 80,742 million in revised estimates 2017-18. Major
share of this head goes to Agriculture, Food, Irrigation, Forestry and Fishing, which is
38.6% of total allocation for Economic Affairs. Table-20 below provides the details
under this head:
TABLE - 20
ECONOMIC AFFAIRS
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
ECONOMIC AFFAIRS 62,940 80,742 80,750
- General Economic, Commercial and
Labour Affairs 17,474 22,896 26,306
- Agriculture, Food, Irrigation, Forestry
and Fishing 26,020 37,935 31,188
- Fuel and Energy 803 764 709
- Mining and Manufacturing 1,565 1,693 1,773
- Construction and Transport 12,354 12,354 15,564
- Communications 3,113 3,316 3,461
- Others Industries 1,611 1,785 1,749Page 32
ENVIRONMENT PROTECTION
5.10 Under the head of Environment Protection, an amount of Rs 1,261 million has
been estimated for budget 2018-19 for Waste Water Management, which is higher by
10.5% than budget estimates 2017-18 and 2.7% when compared with revised
estimates 2017-18.
TABLE - 21
ENVIRONMENT PROTECTION
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
ENVIRONMENT PROTECTION 1,141 1,228 1,261
- Waste Water Management 1,141 1,228 1,261
HOUSING AND COMMUNITY AMENITIES
5.11 Under the head of Housing and Community Amenities, an amount of
Rs 2,339 million has been provided in the budget 2018-19 for Community
Development, as compared with Rs 2,329 million in the budget estimates
2017-18 and Rs 2,449 million in revised estimates 2017-18.
TABLE - 22
HOUSING AND COMMUNITY AMENITIES
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
HOUSING AND COMMUNITY AMENITIES 2,329 2,449 2,339
- Community Development 2,329 2,449 2,339Page 33
HEALTH AFFAIRS AND SERVICES
5.12 Under the head of Health Affairs and Services, a total allocation of Rs 13,897
million has been made in the budget estimates 2018-19, which is higher by 8.2% and
7.4% when compared with budget and revised estimates 2017-18. The allocation for
Hospital Services forms the major component, which is 83.9% under this
classification. Details are given in Table-23 below:
TABLE - 23
HEALTH AFFAIRS AND SERVICES
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
HEALTH AFFAIRS AND SERVICES 12,847 12,944 13,897
- Medical Products, Appliances and
Equipment 29 29 31
- Hospital Services 10,823 10,867 11,657
- Public Health Services 439 442 469
- Health Administration 1,555 1,606 1,740Page 34
RECREATION, CULTURE AND RELIGION
5.13 In budget 2018-19 an amount of Rs 9,242 million has been budgeted for
Recreation, Culture and Religion. Overall estimates under this classification for
2018-19 are higher by 9.6% when compared with budget estimates 2017-18, while
lower by 22.1% when compared with revised estimates 2017-18. The bulk of
expenditure under this head has been earmarked for Broadcasting and Publishing,
which is 76.7% of the total allocation. Details are given in Table-24 below:
TABLE - 24
RECREATION, CULTURE AND RELIGION
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
RECREATION, CULTURE AND RELIGION 8,434 11,866 9,242
- Recreation and Sporting Services 1 1 1
- Cultural Services 618 644 681
- Broadcasting and Publishing 6,483 8,124 7,091
- Religious Affairs 959 2,724 1,032
- Administration of Information,
Recreation & Culture 373 373 437Page 35
EDUCATION AFFAIRS AND SERVICES
5.14 Education Affairs and Services have been provided with Rs 97,420 million in
the budget estimates 2018-19 as compared with Rs 90,516 million in budget
estimates 2017-18 and Rs 90,818 million in revised estimates 2017-18. The bulk of
expenditure at Rs 71,824 million has been allocated for Tertiary Education Affairs
and Services in budget 2018-19, which is 73.7% of the total allocation under this
head. The details are as under:
TABLE - 25
EDUCATION AFFAIRS AND SERVICES
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
EDUCATION AFFAIRS AND SERVICES 90,516 90,818 97,420
- Pre-Primary & Primary Education Affairs
Services 8,748 8,768 10,120
- Secondary Education Affairs & Services 10,798 10,875 12,365
- Tertiary Education Affairs and Services 68,252 68,466 71,824
- Education Services not Definable by Level 70 70 77
- Subsidiary Services to Education 274 281 295
- Administration 1,286 1,288 1,588
- Education Affairs, Services not
elsewhere classified 1,088 1,071 1,151Page 36
SOCIAL PROTECTION
5.15 Under the head of Social Protection, an amount of Rs 2,396 million has been
allocated in the budget 2018-19, which is higher by Rs 296 million as compared with
budget estimates 2017-18 and Rs 94 million when compared with revised estimates
2017-18. The revised estimates include additional expenditures on account of
emergency relief and repatriation.
TABLE - 26
SOCIAL PROTECTION
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
SOCIAL PROTECTION 2,100 2,302 2,396
- Administration 1,503 1,705 1,616
- Others 598 598 780Page 37
CHAPTER - 6
SUBSIDIES, GRANTS AND TRANSFERS
2018-19
SUBSIDIES
6.1 In order to alleviate the impact of inflation on citizens, especially the poor
segments of society, the Federal Government spends a fairly large sum on providing
power and food subsidies. In the budget estimates 2017-18 subsidies were Rs 138,846
million; in revised estimates 2017-18 they increased to Rs 147,604 million due to
increase in subsidy to KESC (i.e. for DISCO & K-Electric) and subsidy to fertilizer. Total
subsidies for fiscal year 2018-19 has been estimated at Rs 174,746 million which
increased by 25.9% and 18.4% over budget and revised estimates 2017-18.
6.2 In budget 2018-19, the allocation for subsidies to WAPDA/PEPCO forms the
major component, which is 76.7% of the total allocation followed by subsidy to PASSCO
with share of 10.9% and KESC with share of 8.8%. A total estimate of subsidies for
budget 2018-19 is 0.5% of GDP. Table-27 provides the details:
TABLE - 27
SUBSIDIES
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
Subsidy to WAPDA/PEPCO: 102,500 81,500 134,000
1 Inter-Disco Tariff Differential 65,000 57,500 105,000
2 Tariff Differential for Agriculture Tubewells in
Balochistan 8,500 - 5,000
3 To pick up WAPDA/PEPCO receivables from
FATA 10,000 10,000 12,000
4 Inter-Disco Tariff Differential Arrears 4,000 - -
5 Power Sector PSEs Reforms 15,000 - -
6 Subsidy to WAPDA - 14,000 12,000
Contd….Page 38
SUBSIDIES
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
Subsidy to KESC: 15,500 33,476 15,400
7 To pick up KESC's Tariff Differential 15,000 11,000 15,000
8 For Tariff Differential for Agriculture
Tubewells in Balochistan 500 387 400
9 Subsidy to DISCOs & K-Electric - 22,089 -
Subsidy to USC for: 4,000 4,000 6,000
10 Ramzan Package 1,500 1,500 2,000
11 Payment of Sugar Arrears 2,000 2,000 3,000
12 Sale of Pulses, Rice, Tea etc. at subsized
rates 500 500 1,000
Subsidy to PASSCO for: 16,545 17,545 19,045
13 Wheat Operation 2,000 700 1,500
14 Wheat Reserved Stock 5,000 5,000 5,000
15 Wheat supplied to Gilgit-Baltistan (Arrears) 8,045 8,045 8,045
16 Support for Wheat/Flour Export 1,500 1,500 1,500
17 Support for Sugar Export - 1,000 2,000
18 Reimbursement on account of Paddy
Operation - - 500
19 Reimbursement on account of Donation of
Wheat by the GOP - 1,300 500
Subsidy to National Food Security &
Research Division 1 10,783 1
20 National Food Security & Research Division 1 1 1
21 Subsidy to Fertilizer - 10,782 -
Subsidy to Others: 300 300 300
22 Sale of Wheat in FATA 300 300 300
TOTAL SUBSIDIES: 138,846 147,604 174,746Page 39
GRANTS AND TRANSFERS
6.3 Grants and transfers to provinces and others for the year 2018-19 have been
estimated at Rs 477,924 million as compared with Rs 430,230 million in budget
estimates 2017-18 and Rs 461,638 million in revised estimates. The detail of grants
and transfers to the provinces and others is given in the following Table:
TABLE - 28
GRANTS AND TRANSFERS
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
I. GRANTS IN AID & MISCELLANEOUS 26,000 26,485 28,000
ADJUSTMENTS
A. SPECIAL GRANTS 22,000 24,985 24,000
- Punjab - 383 -
- Sindh 12,000 14,251 14,000
- Khyber Pakhtunkhwa - 43 -
- Balochistan 10,000 10,308 10,000
B. LUMP PROVISION 4,000 1,500 4,000
II. GRANTS TO OTHERS 404,230 435,153 449,924
- Contingent Liabilities 180,000 195,000 210,000
- Miscellaneous Grants 70,000 80,300 77,000
- Other outstanding Liabilities 20,000 20,000 20,000
- Pakistan Railways to meet their losses 40,000 38,500 37,000
Contd…..Page 40
GRANTS AND TRANSFERS
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
- National Internship Programme 55 55 53
- Lump Provision for Relief etc. 2,400 6,736 4,096
- Competition Commission of Pakistan 210 210 210
- Reimbursement of Telegraphic
Transfers (TT) Charges on Home 12,000 12,000 12,000
Remittances
- Pakistan Remittance Initiative 20 20 20
- Grants to AJK Government 40,000 40,000 49,000
- Grant-in-Aid to Gilgit Baltistan 27,500 27,650 29,500
- Grant to Bait-ul-Maal 6,000 6,000 5,000
- Wheat Subsidy to Gilgit Baltistan 6,045 6,045 6,045
- National Disaster Risk Management
- 2,638 -
Fund
TOTAL GRANTS (I + II): 430,230 461,638 477,924Page 41
CHAPTER - 7
LOANS AND INVESTMENTS
2018-19
7.1 The financial assets of the Federal Government consist of investible funds and
loans provided to Azad Jammu and Kashmir (AJK) and various agencies/institutions
as well as government servants to enable them to meet their financial requirements.
CURRENT LOANS & ADVANCES
7.2 Total current loans and advances have been estimated at Rs 49,076 million in
budget 2018-19. The following Table provides the details:
TABLE - 29
CURRENT LOANS & ADVANCES
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
1 AJK for Repayment of Principal & Interest 13,714 13,710 14,494
2 Junagadh and Kathiawar Chiefs 1 1 1
3 Loans/Advances to Employees of PNRA 15 15 15
4 Loans/Advances to Friendly Countries 500 - 500
5 Gilgit-Baltistan for Repayment of
Principal and Interest - 4 6
6 Interest free Loans to WAPDA
Operation and Maintenance, Hub Dam &
Khanpur Dam 40 - 40
7 GOP Loan to PCP, Islamabad - 1,577 -
8 Loan to State Engineering Corporation 55 38 20
9 Current Loans to PIA - - 18,000
10 Loans and Advances to:
- Federal Gov't Servants Islamabad 6,002 6,002 7,631
- Federal Gov't Servants Lahore 1,239 1,239 1,352
- Federal Gov't Servants Karachi 1,389 1,389 1,518
- Federal Gov't Servants Quetta 337 337 370
- Federal Gov't Servants Peshawar 600 600 656
- Federal Gov't Servants Gilgit 405 405 443
11 Pakistan Mint Lahore 27 27 29
12 Loans to Pakistan Steel Mills Karachi 4,000 4,180 4,000
TOTAL: 28,324 29,524 49,076Page 42
DEVELOPMENT LOANS AND ADVANCES
7.3 Development loans and advances are made by the Federal Government to
Provinces, Government of Azad Jammu and Kashmir, Public Sector Enterprises
(PSEs), Financial/Non-Financial Institutions, District Governments/TMAs, and Others
to assist them in carrying out their development programmes.
7.4 Total development loans and advances (local and external) were estimated
at Rs 595,212 million in the budget 2017-18, which have now been revised upwards
to Rs 596,686 million in revised estimates 2017-18. For budget 2018-19, total
development loans and advances have been estimated at Rs 461,539 million,
showing a decrease of 22.5% over budget estimates 2017-18 and 22.7% over
revised estimates 2017-18.
7.5 For budget 2018-19, development loans and advances (local) have been
estimated at Rs 156,315 million, while development loans and advances (external) at
Rs 305,225 million. The details are as in Table-30 below:
TABLE - 30
DEVELOPMENT LOANS AND ADVANCES
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
1 Development Loans and Advances 264,274 265,621 156,315
2 External Development Loans and
Advances 330,939 331,065 305,225
TOTAL: 595,212 596,686 461,539Page 43
CURRENT INVESTMENTS
7.6 The federal current investments for the year 2018-19 have been estimated at
Rs 19,436 million as compared with Rs 19,949 million and Rs 28,790 million in the
budget and revised estimates of 2017-18 respectively. The allocation for investment
in 2018-19 is lower by 2.6% and 32.5% as compared with budget and revised
estimates 2017-18 respectively. Table-31 provides the comparative position.
TABLE - 31
CURRENT INVESTMENTS
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
1 GoP Contribution in Equity of Pak China
Investment Co. Ltd. Islamabad 100 - 500
2 GoP Equity in GENCO holding Copmany
Ltd. (GHCL) - 0.1 -
3 GoP Equity Investment against the
liability of Peoples Steel Mills 5 - -
4 GoP Equity in Discos through CPPA-G
for payment of Power Sector Payables - 20,000 -
5 Lump Provision for Miscellaneous
Expenditure 12,000 - 11,000
6 Paid up Capital for the proposed Exim
Bank of Pakistan 3,000 - 1,000
7 4th General Increase of Capital Stock
Islamic Develoment Bank (IDB) 841 777 933
8 Fifth General Increase of Asian
Develoment Bank (ADB) - 0.05 -
9 GoP Equity in DISCOs through PHPL for
payment of DSL of STFF 4,000 8,010 6,000
10 Pakistan's Annual Contribution to Inter
Governmental Group IF 24 (G-24) 3 3 3
TOTAL: 19,949 28,790 19,436Page 44
CHAPTER - 8
PUBLIC SECTOR DEVELOPMENT PROGRAMME (PSDP) 2018-19
8.1 The Public Sector Development Programme (PSDP) is the main instrument for
improving the socio-economic conditions in the country and achieving the
macroeconomic and development objectives and targets set by the government,
which yield maximum benefits in the shortest possible time for the society.
8.2 For the year 2018-19 National Economic Council (NEC) has approved an
overall size of PSDP at Rs 1,650 billion, which is 4.3% of Gross Domestic Product
(GDP).
8.3 The Salient features of PSDP allocation for 2018-19 are as follows:
- The size of national PSDP (Rs 1,650 billion) in the budget for 2018-19 showing a
decrease of 21.9% over budget estimates 2017-18, while an increase of 6.5%
over revised estimates 2017-18.
- Federal PSDP for the year 2018-19 has been kept at Rs 800 billion, which is
lower by 20.1% than budget estimates 2017-18 and higher by 6.7% than revised
estimates 2017-18.
- The share of Federal Ministries/Divisions in 2018-19 PSDP is Rs 420.4 billion
indicating an increase of 11.3% over budget estimates 2017-18.
- The Corporations' PSDP for 2018-19 has been placed at Rs 246.1 billion
indicating a decrease of 35.3% over budget estimates 2017-18.
- An amount of Rs 5 billion has been allocated in the budget 2018-19 to Pakistan
Sustainable Development Goals (SDGs) and Community Development
Programme.
- Earthquake Rehabilitation and Reconstruction Authority (ERRA) has been
allocated Rs 8.5 billion in the budget 2018-19 reflecting an increase of 13.3%
over budget and revised estimates of outgoing fiscal year.
- An amount of Rs 5 billion has been allocated in the budget 2018-19 to Special
Provision for CEPEC Projects.
- In the budget 2018-19, Rs 10 billion has been kept for FATA 10 year Plan.
- In the budget 2018-19, an amount Rs 45 billion has been allocated to Relief and
Rehabilitation of IDPs.Page 45
- An amount of Rs 45 billion has been budgeted for Security Enhancement in
2018-19.
- Rs 10 billion has been allocated for Prime Minister's Youth Programme in the
budget 2018-19.
- Gas Infrastructure Development Cess (GIDC) has been allocated Rs 5 billion in
the budget 2018-19.
- The Provincial Development Programme for 2018-19 has been estimated at
Rs 850 billion as against Rs 800 billion in revised estimates 2017-18, showing
an increase of 6.3%.
8.4 The following Table-32 indicates details of the size of Public Sector Development
Programme (PSDP).
TABLE - 32
SIZE OF PSDP
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
A. Federal Ministries/Divisions 377,870 310,109 420,375
1 Aviation Division 4,349 2,108 4,677
2 Board of Investment - - 125
3 Cabinet Division 160 142 1,116
4 Capital Administration & Development
Division 5,188 2,464 13,906
5 Climate Change Division 815 785 803
6 Commerce Division 1,200 665 1,500
7 Communications Division (other than
NHA) 13,660 13,247 14,481
8 Defence Division 535 351 641
9 Defence Production Division 4,468 3,136 2,810
10 Economic Affairs Division - - 70
11 Establishment Division 270 - 175
12 Federal Education & Professional
Division 2,962 2,316 4,337
13 Finance Division 18,936 15,675 16,951
14 Foreign Affairs Division 200 - 200
15 Higher Education Commission 35,663 32,950 35,830
Contd…….Page 46
SIZE OF PSDP
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
16 Housing & Works Division 10,386 8,092 5,433
17 Human Rights Division 306 47 300
18 Industries and Production Division 2,737 569 1,775
19 Information & Broadcasting & National
Heritage Division 812 210 1,644
20 Information Tech. & Telecom Division 1,538 2,470 3,046
21 Inter Provincial Coordination Division 3,044 2,920 3,553
22 Interior Division 15,667 13,401 24,008
23 Kashmir Affairs & Gilgit Baltistan
Division 43,644 42,835 44,706
24 Law and Justice Division 1,200 844 1,025
25 Narcotics Control Division 220 120 251
26 National Food Security & Research
Division 1,614 885 1,808
27 National Health Services, Regulations &
Coordination Division 48,701 28,062 25,034
28 National History & Literary Heritage
Division 273 105 551
29 National Security Division 100 - -
30 Pakistan Atomic Energy Commission 15,085 12,201 28,340
31 Pakistan Nuclear Regulatory Authority 322 287 300
32 M/o. Energy (Petroleum Division) 554 16,521 943
33 Planning, Development & Reform
Division 16,799 4,157 16,240
34 Postal Services Division - - 370
35 Maritime Affairs Division 12,776 2,688 10,119
36 Railways Division 42,900 22,020 34,411
37 Revenue Division 790 633 2,559
38 Science & Technological Research
Division 2,428 1,252 3,900
39 States & Frontier Regions Division 26,900 35,947 28,256
40 Statistics Division 200 742 200
Contd…….Page 47
SIZE OF PSDP
(Rs in Million)
Budget Revised Budget
Classification
2017-18 2017-18 2018-19
41 SUPARCO 3,500 3,500 4,700
42 Textile Division 218 21 280
43 Water Resources Division 36,750 35,740 79,000
B. Corporations 380,630 410,622 246,125
1 Power Division 60,909 84,901 36,125
2 National Highway Authority (NHA) 319,720 325,720 210,000
C. Pak SDGs & Community Development
Programme 30,000 21,770 5,000
D. Special Federal Development Programme 40,000 - -
E. Energy for All 12,500 - -
F. Clean Drinking Water for All 12,500 - -
G. ERRA 7,500 7,500 8,500
H. Special Provision for CEPEC Projects 5,000 - 5,000
I FATA 10 Year Plan - - 10,000
J. Relief and Rehabilitation of IDPs 45,000 - 45,000
K Security Enhancement 45,000 - 45,000
L Prime Minister's Initiative 20,000 - 10,000
M Gas Infrastructure Development Cess 25,000 - 5,000
Total Federal PSDP (A to M): 1,001,000 750,000 800,000
N Provinces 1,112,000 800,000 850,000
TOTAL NATIONAL PSDP (A to N): 2,113,000 1,550,000 1,650,000
Total Federal PSDP 2018-19 would be Rs 1,030 billion out of which Rs 230 billion
would be self financing by the corporation/authorities and Rs 800 billion would be
provided through budget 2018-19.Page 48
DEVELOPMENT EXPENDITURE OUTSIDE PSDP 2018-19
8.5 Under the head of Development Expenditure Outside Public Sector Development
Programme (PSDP), Rs 180,238 million have been allocated in this head in the budget
2018-19, reflecting an increase of 18.4% over budget estimates 2017-18 and 17.7% over
revised estimates 2017-18. Table-33 provides the details.
TABLE - 33
DEVELOPMENT EXPENDITURE OUTSIDE PSDP
(Rs in Million)
Budget Revised Budget
Classification 2017-18 2017-18 2018-19
1 Benazir Income Support Programme 121,000 113,000 124,700
2 Crop Loan Insurance Scheme 700 700 1,000
3 Livestock Insurance Scheme 1,000 1,000 100
4 Credit Guarantee Scheme for Small Farmers 1,000 - 100
5 Provision for Reconstruction of Afghanistan 3,000 3,000 3,000
6 Subsidy to TCP for Import of Urea Fertilizer 5,000 5,000 5,000
7 Provision for Misc. Dev. Exp. outside PSDP 3,000 - 18,000
8 Grants for Pakistan Poverty Alleviation Fund 2,000 1,500 688
9 Public Financial Management &
Accountability to support services delivery
programme - - 150
10 Prime Minister's Interest Free Loan (PMIFL) - - 3,500
11 Strategic Trade Policy Framework 5,000 - 4,000
12 Textile Policy 2009-14 5,000 - 6,000
13 Duty Drawback of Local Taxes and Levies
2014-15 - 673 -
14 Local Taxes and Levies 2015-16 - 500 -
15 Local Taxes and Levies 2016-17 - 500 -
16 Technology Upgradation Fund Order, 2016 for
Textile Sector - 700 -
17 Duty Drawback of Taxes Order 2016-17 4,000 18,500 10,000
18 Drawback of Local Taxes and Levies
(Non-Textile) Order, 2017 1,500 2,627 4,000
19 Development Expenditure of FATA Outside
PSDP - 3,000 -
20 Development Expenditure of SAFRON
Outside PSDP - 1,190 -
21 Development Expenditure of Economic
Affairs Division Outside PSDP - 1,284 -
TOTAL: 152,200 153,174 180,238Page 49
CHAPTER - 9
MEDIUM-TERM BUDGETARY FRAMEWORK (MTBF)
9.1 Medium-Term Budgetary Framework (MTBF) reform initiative is aimed at improving
budget preparation process of the Federal Government. Since its full rollout, endorsed by
the Cabinet in 2009, this reform initiative has made steady progress.
9.2 The MTBF includes the following key components:
(1) An annual pre-budget analytical ‘Budget Strategy Paper’, which includes a 3-
year macro-fiscal framework, budget policies, and indicative ceilings (resource
limits) for Ministries / Divisions. The Budget Strategy Paper is tabled in the
Cabinet meeting where discussions on policy priorities, allocations, and
performance against targets are held.
To compile the Budget Strategy Paper, the Finance Division, Planning
Commission, Federal Board of Revenue, and State Bank of Pakistan share their
projections and discuss different scenarios and options.
This component has led to greater coordination between technical and political
levels of the Government in defining fiscal policy and benchmarks, and
enhanced understanding of medium-term implications of current budgetary
decisions.
(2) Performance budgeting (also known as ‘output-based budgeting’). Through
this mechanism the Principal Accounting Officers (Secretaries) are gradually
being given greater autonomy over the distribution of ceilings as per their own
policy priorities. Together with greater autonomy, a system of performance
management is being introduced, which presents the budget by outputs
(services delivered) as against inputs only (funding and material resources
required).
The output-orientation to the budget allows linkage of the budget with policy
preferences, and provides a basis for defining and measuring performance.
Through the use of mutually agreed indicators and targets, each Principal
Accounting Officer is given a set of criteria against which the performance of the
Ministry/Division is evaluated in terms of outputs generated from the utilisation of
budgetary resources appropriated by the Parliament.
This information is then presented to the Parliament in the shape of ‘Federal
Medium-Term Budgetary Estimates for Service Delivery’ - also known as the
MTBF Green Book. The Green Book is a part of the reform agenda to make the
budget more transparent and comprehensive by linking budgetary allocations
with policy and performance.Page 50
(3) Performance monitoring. The performance budgets prepared are being
monitored by the Finance Division. Under this process, actual expenditure
against appropriations and reasons for variations are compiled from Ministries /
Divisions along with performance achieved vs targets.
Budget Preparation Process
9.3 To achieve the objectives as outlined above, the Federal Government has improved
its budget preparation process through the MTBF. Under the reformed process:
• The Finance and Planning, Development Reform Divisions prepare a
Medium-Term Macroeconomic Framework in consultation with various
Government Ministries and the State Bank of Pakistan
• Based on the macroeconomic situation and future projections, the Finance
Division articulates its budgetary policy priorities and prepares a Medium-
Term Fiscal Framework
• The Finance Division and Planning, Development & Reforms Division work
out, for each Principal Accounting Officer, medium-term Indicative Budget
Ceilings (IBCs) that align resource allocation with the Government’s policies
• The macroeconomic and fiscal frameworks, together with the IBCs, are
presented to the Cabinet through the 'Budget Strategy Paper' (BSP) for
approval
• Based on these IBCs, ministries prepare their budgets that are reviewed for
quality assurance by the Finance Division and Planning, Development and
Reform Division
• The Secretaries of Finance, Planning, Development and Reform, and
Economic Affairs Divisions jointly chair the Priorities Committee meetings
that discuss policy and budget priorities with each Principal Accounting
Officer
• The Annual Plan Coordination Committee (APCC) discusses the public-
sector investment proposals with the Federal and Provincial Governments
• The National Economic Council (NEC) approves the Public Sector
Development Programme (PSDP) of the Federal and Provincial
Governments
• The finalised budget is presented in the Cabinet for endorsement and
Parliament for appropriation.Page 51
MACROECONOMIC INDICATORS
9.4 Macroeconomic Indicators for 2017-21 are provided in Table - 34 below:
TABLE - 34
Forecast
Consolidated Fiscal Budget Revised Budget
Projections 2017-18 2017-18 2018-19 2019-20 2020-21
Real GDP Growth (%) 6.0 5.8 6.2 6.5 7.0
Inflation (%) 6.0 4.5 6.0 6.0 6.0
(as percentage of GDP)
Total Revenue 17.2 16.0 16.3 16.4 16.5
- Tax Revenue 13.7 13.2 13.9 14.1 14.3
- FBR Tax Revenue 11.2 11.4 11.6 11.8 12.1
- Non Tax Revenue 3.5 2.8 2.4 2.3 2.2
Total Expenditure 21.3 21.5 21.2 21.1 21.0
- Current 15.0 16.6 16.5 16.1 16.0
- Development 6.3 4.9 4.7 5.0 5.0
Fiscal Balance -4.1 -5.5 -4.9 -4.7 -4.5
Revenue Balance 2.2 -0.6 -0.2 0.3 0.5
Total Public Debt-
(Gross) 61.4 70.1 68.0 65.2 62.1
Total Public Debt-(Net) 59.2 64.9 63.3 61.1 58.6
GDP at market prices 35,919 34,396 38,388 43,458 49,452
(Billions)Page 52
CHAPTER - 10
CLIMATE CHANGE BUDGETING
10.1 Climate budgeting seeks to align and scale up the funding of national climate
change priorities through the budget process. Increased availability of international
climate finance, coupled with mounting evidence of the financial, material and human
losses incurred over recent years due to climate-related phenomenon such as more
frequent and intensive floods, heat waves, and cyclonic activities rationalise efforts to
better translate climate strategies and action plans into budgetary commitments.
10.2 Pakistan ranks amongst the top ten countries most vulnerable to climate
change. To increase its resilience, the government has taken some critical steps to
systematically respond. The 2016 Climate Change Act envisages a new governance
architecture to coordinate and implement climate policy priorities across levels of
government and in 2015 an implementation framework for the 2012 National Climate
Change Policy was also adopted.
10.3 Under the Paris Agreement on Climate Change, Pakistan has stated its
intention to reduce its 2030 projected GHG emissions by up to 20%, subject to
availability of international funding support to help meet the estimated cost of US$ 40
billion at current prices. The Pakistan Nationally Determined Contribution (NDC) under
this international agreement also affirmed government’s commitment to intensify
efforts for policies and measures to adapt to climate changes.
10.4 A Climate Change Financing Framework (CCFF) was launched by the
Government of Pakistan in late 2017. This outlines a reforms agenda for
mainstreaming climate change in planning, budgeting, and public financial
management systems. Some of the reforms being implemented by the government
include:Page 53
• Operationalising a budget coding and tracking system dedicated to climate
expenditures, using data maintained by the Controller General of Accounts
(CGA). This system will afford policymakers with more timely and transparent
information on budgetary spending at both national and sub-national levels,
enabling more informed investment decisions. It systematizes in real-time
information previously obtained through the ‘Climate Public Expenditure and
Institutional Review’ (CPEIR) diagnostics carried out in 2015 and again in
2017. The process of tracking provincial climate expenditure and integrating it
at federal level has also begun.
• The Ministry of Climate Change (MoCC) has shared a proposal for revising the
PC-1 template with the Ministry of Planning, Development and Reforms. This
will facilitate basic climate change analysis at the project formulation stage.
Further, MoCC is supporting the Ministry of Water Resources in formulating
climate-responsive Output Based Budget (OBB)/MTBF as a pilot, in line with
the CCFF. The approach will be replicated across the federal government in
later years.
• The MoCC also intends to designate focal persons in relevant sector
ministries to steer the climate budgeting process and to support broader
capacity building to in line ministries to comply with relevant guidelines in the
budget call circular.
10.5 The Finance Division and MoCC are leading these reforms which also involve
Federal Ministries/Divisions that undertake climate change initiatives. These reforms
are aimed at building a more transparent, climate change responsive public financial
management system. These efforts will result in a stronger implementation of the
climate policy and more robust tracking of Pakistan’s international commitments.Page 54
WORKING OF FISCAL DEFICIT AND FINANCING
BUDGET 2018-19
(Rs. in Billion)
Working Deficit Financing of Deficit
A) Federal Revenue (net) 3,070.4 Gross External Loans 1,118.0
B) Total Federal 5,246.2 Less Repayments 775.9
Expenditure (i+ii)
i) Current Expenditure 4,178.6 Long Term Foreign Loans 601.8
ii) Development and Net 1,067.6 Short Term Foreign Loans 174.2
Lending (a+b+c)
a) Federal PSDP 800.0 i) Net External Financing 342.1
b) Other Development 180.2 ii) Domestic Financing
Expenditure (a+b) 1,548.1
c) Net Lending 87.4 a) Bank Financing 1,015.3
of which SBP Financing 0.0
C) Federal Deficit (A-B) -2,175.8 b) Non Bank Financing 532.8
Estimated Provincial Surplus 285.6 Public debt 406.1
Public Account 126.7
Privatization Proceeds 0.0
Overall Fiscal Deficit -1,890.2 Total Financing of Deficit (i+ii) 1,890.2
% of GDP -4.9% % of GDP 4.9%Page 55
Glossary of Terms
Bank Borrowing Includes borrowing from the State Bank of
Pakistan and Scheduled Banks
Capital Receipts Income from proceeds of borrowing, money
received in repayment of loans, recoveries of
advances and investments, proceeds of
savings schemes, net receipts from
transactions under deposit, and remittances
Community Services Income from rents of government buildings,
Receipts land, guest houses, and hostels, etc.
Current Expenditure Include interest payments, pension, defence
affairs & services, grants & transfers,
subsidies, and running of civil government
Development Expenditure Include federal PSDP, development loans &
grants to provinces, and other development
expenditure (outside PSDP)
Direct Taxes Income tax, workers welfare fund and capital
value tax (CVT)
Disbursements Government investments, loans, advances
and others, and repayment of short term credit
External Resources Include project and programme loans, foreign
loans & credits, and foreign grants
Grants Financial support to provinces, organisations,
and industries for contingent liability, to fulfill
losses, remission of loans, etc.
Gross Revenue Receipts Sum of tax revenue and non-tax revenue
(before excluding provincial share)
Indirect Taxes Customs, sales tax and federal excise.
Contd……..Page 56
Glossary of Terms
Internal Resources Include net revenue receipts, net capital
receipts, and estimated provincial surplus
Net Capital Receipts Capital receipts minus disbursements
Net Lending to Others Government investments, loans and advances
from Public Sector Enterprises (PSEs) minus
recoveries of loans and advances from PSEs
Net Revenue Receipts Gross revenue receipts minus provincial share
Non-Tax Revenue Income from property and enterprises; receipts
from civil administration and other functions;
and miscellaneous receipts of the federal
ministries, divisions and departments
Other Development Other development expenditure comprises
Expenditure development expenditure of Federal
Government outside the PSDP
Other Taxes Islamabad Capital Territory (ICT) Tax, Airport
Tax, Gas Infrastructure Development Cess
(GIDC), Natural Gas Development Surcharge
and Petroleum Levy.
Provincial Share Provincial share in federal taxes and straight
transfers
Provincial Surplus Provincial government deposits with State
Bank of Pakistan
Resources Include internal and external financial
resources
Tax Revenue Income from direct, indirect and other taxes
Total Outlay / Expenditure Includes current expenditure and development
expenditurePage 57
52
BUDGET AT A GLANCE
FOR THE FISCAL YEAR 2018-19
(Rs. in Billion)
RECEIPTS EXPENDITURE
TAX REVENUE 4,888.6 A. CURRENT 4,178.6
- FBR Taxes 4,435.0 Interest Payments 1,620.2
- Other Taxes 453.6 Pension 342.0
- NON-TAX REVENUE 771.9 Defence Affairs & Services 1,100.3
a) Gross Revenue Receipts 5,660.5 Grants and Transfers 477.9
b) Less Provincial Share 2,590.1 Subsidies 174.7
I. Net Revenue Receipts (a-b) 3,070.4 Running of Civil Govt. 463.4
II. Capital Receipts (Non-Bank) 532.8
III. External Receipts (net) 342.1 B. DEVELOPMENT 1,067.6
IV. Estimated Provincial Surplus 285.6 Federal PSDP 800.0
V. Bank Borrowing 1,015.3 Net Lending 87.4
VI. Privatization Proceeds 0.0 Other Dev. Expenditure 180.2
TOTAL RESOURCES (I to VI) 5,246.2 TOTAL EXPENDITURE(A+B) 5,246.2