Karachi: The government has estimated a total budget outlay of PkR 4.406 trn for FY13 out of which PkR 3.033 trn would be targeted from collection of revenues while a fiscal deficit of 4.2% of GDP is estimated.
According to Alfalah Securities Limited, the government has assumed that the provinces would show a budget surplus of PkR 110 bn and total subsidies would be restricted to PkR 120 bn in FY13 thus limiting the fiscal deficit to 4.2% of GDP. The government would borrow PkR 874 bn from domestic sources mainly from the banking system while PkR 91 bn and PkR 50 bn would be met through external sources and grants respectively to finance the budget deficit. The total expenditure of the Federal government has been estimated at PkR 2.738 trn and PkR 1.668 trn has been estimated for provincial governments for FY13.
The government has also decided to increase the allocation of Public Sector Development Program (PSDP) by 16.6%, which has been estimated at PkR 350 bn for FY13 against the allocated amount of PkR 300 bn for the current financial year. PkR 545 bn is estimated for Defence in FY13 against PkR 495 bn in the current fiscal year, depicting a rise of 10.1%. Moreover, the government has allocated PkR 933 bn for the servicing of debt in FY13 against a revised target of PkR 795 bn, showing a considerable increase of 17.36%YoY. Alfalah Securities Limited believes, the government has set optimistic targets for the upcoming budget and in order to accomplish these targets the government would require to contain expenditure and show fiscal discipline.