Fiscal Consolidation measures bear fruit, bring financial discipline: Report.

PositionReport

ISLAMABAD -- The Fiscal consolidation measures taken by the government have resulted in financial discipline, higher revenues and controlled expenditures, according to Mid-Year Budget Review Report for the fiscal year 2020-21.

'The same strategy will be followed during the remaining period of the CFY (current financial year) to achieve the fiscal sustainability,' the report published by the finance ministry said.

According to the report, the continuity in fiscal consolidation, stable exchange rate, improved current account and better financial management, presents a promising economic outlook.

However, there are certain risks to fiscal sustainability, it said adding that going forward the fiscal position would depend on the domestic and international evolution of Covid-19.

On the other hand faster than anticipated economic revival was likely to increase demand for inputs.

The Finance Division has adopted the facilitative policy of release of funds to meet the expenditures, both re-current and development, in accordance with the government spending priorities.

'Nevertheless, the half year fiscal position indicates that it will remain on track to meet the annual fiscal targets,' the report added.

It is pertinent that this report presents the mid-year comparison of the budgeted and actual Revenues, Expenditures and Financing for FY 2020-21.

On the revenue side, FBR tax collection grew by 5.6 percent during the first half of the Current Financial Year (CFY) on a Year-on-Year (YOY) basis despite an upsurge of Covid-19.

Nontax revenue remained at par with the previous year collection during the same period in spite of reduction in State Bank of Pakistan (SBP) profits and non-realization of fees from cellular license renewals.

Current expenditure was controlled through austerity measures and strict financial discipline, it said however, Covid-related expenditures were made to provide relief...

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