Islamabad/IBNS: The World Bank has termed the rise in Pakistan’s fiscal deficit and debt as “dangerous” for its economy and made several suggestions to the country to counter this problem — starting with the end of subsidies.
The World Bank, in its report, has recommended debt management and establishing a single treasury account to improve the South Asian country’s economy.
It said that Pakistan could save Rs 2.72 trillion annually by eliminating unnecessary expenses and subsidies as they eat up 70 percent of the budget.
The World Bank added that besides increasing revenue, savings equivalent to 4 percent of the GDP were possible through these administrative measures.
Rs 315 billion could be saved by limiting the development budget, according to the report.
The report has suggested to entrust various matters including 90 percent of the Benazir Income Support Programme (BISP) expenses to the provinces.
A sum of Rs 217 billion could be saved if the provinces covered 90 percent of the BISP cost, it added.
The report mentioned that the tax revenue share of the Pak federal government was only 46 percent while the expenditure stood at 67 percent.
The report said that interest, subsidies and salary expenses were a major burden on the federal government.
The World Bank in its report maintained that expenditures and deficits increased after the 18th Constitutional Amendment, reports The Express Tribune.
The fiscal deficit of 7.9 percent last year reached a 22-year high, according to the report.
It added that the debt ratio was also recorded at a high level of 78 percent, while the total revenue in Pakistan was 12.8 percent of the GDP.
