The federal government’s net revenue receipts were insufficient to cover even one major expenditure item during the fiscal year 2023-24, leading to a rapidly escalating debt trap.
Additionally, the Ministry of Finance reported a statistical discrepancy of Rs281 billion, indicating ongoing issues with reconciling government accounts.
Despite these challenges, the government achieved a primary balance of Rs0.952 trillion, equivalent to 0.9% of GDP, in line with the International Monetary Fund (IMF) conditions.
According to fiscal operations for 2023-24, ending on June 30, 2024, released by the Ministry of Finance on Tuesday, net revenue receipts of the federal government shrank to Rs7.09 trillion.
However, the largest expenditure item, debt servicing, consumed Rs8.2 trillion, indicating the government had to borrow approximately Rs1 trillion just to cover this cost.
Gross revenue receipts totalled Rs12.36 trillion, with transfers to the provinces under the NFC Award at Rs5.263 trillion, leaving net revenue receipts at Rs7.097 trillion for the last fiscal year.
This situation clearly shows that all other expenditures — including defence, development, running of civil government, pay and pensions, as well as subsidies and grants — were financed through additional borrowing.
The country has plunged into a debt trap, offering no easy solutions for policymakers, especially in the context of the 18th Constitutional Amendment and NFC Award.
The fiscal operations report shows that total revenues reached Rs13.3 trillion in the last fiscal year, while total expenditures amounted to Rs20.5 trillion, resulting in a gap of Rs7.2 trillion.
