Chief of prime institution in the country for ensuring public accountability and fiscal transparency in governmental operations – Auditor General of Pakistan (AGP) has expressed serious concerns over the country’s deteriorating financial affairs, which have resulted in less than 4 per cent of the over Rs38.67 trillion budget being available for socio-economic services. Besides, around 93pc of supplementary grants, worth over Rs8tr, are not approved by the parliament and remain unspent, representing a loss of public resources.
Senior Economic Correspondent Khaleeq Kiani disclosed in his story for English Daily Dawn saying in its report on the audit year 2023-24, the AGP said that major financial management issues of the federal government during the fiscal year 2022-23 pertained to “unnecessary allocation of supplementary grants leading to blocking of public funds, the demand of budget without need assessment leading to the surrender of budget, lapse of funds due to non-surrendering of funds in time and non-recording of commitments leading to poor budget management”.
The AGP noted with grave distress that debt servicing costs were on the rise, resulting in crowding out spending on socio-economic services and thus compromising the living standards of citizens. It reported that debt servicing cost was around Rs25tr (about 84pc of the total expenditure of Rs29.6tr) in FY22, which increased to Rs34tr (about 91.4pc of Rs38.67tr) in FY23.
The debt servicing cost increased by 37pc (Rs9tr) in absolute numbers in a single year, and its share in total expenditure went up by 7.5pc, according to the annual audit report released by the AGP. The annual audit reports are required under articles 169 to 171 of the Constitution and are presented to the president and the parliament for corrective measures, recoveries or regularisation as deemed fit.
“A high percentage of expenditure, i.e. 96.26pc, was expended on General Public Service (debt servicing, defence and civil government expenses), which includes 91.42pc on repayment of debt and interest payments during 2022-23. The same was 83.93pc during 2021-22,” the report said. “Therefore, the federal government was left with a meagre 12pc of total expenditure for socio-economic functions (other than debt) which is lower than last year’s percentage of 16.07pc.”
Interestingly, even the AGP included defence and running of civil government and debt servicing in the general public service. Put together, these heads consumed 96.26pc (Rs37.23tr) of the total expenditure in FY23 compared to 95.25pc (Rs28.25tr) in the preceding year, when total expenditure was booked at Rs29.66tr.
“Overall appropriation figures revealed that the federal government granted supplementary grants of Rs8,678.242 billion, out of which Rs8,049.415 billion was not approved by the parliament. This meant that almost 93pc of supplementary grants were without parliamentary sanction during FY2022-23,” it said.
As per the Financial Statement of the Federal Government for FY23, there was an increase in receipt of domestic floating and permanent debts to Rs25.17tr and Rs7.29tr as compared to FY22’s receipt of Rs17.94tr and Rs6.53tr, respectively. However, the receipt of foreign debt reduced to Rs2.88tr compared to the previous year’s Rs3.08tr.
During the fiscal year 2022-23, the federal government paid off Rs22.63tr floating and Rs2.46tr permanent domestic debts as well as Rs3.24tr of foreign debt.
