Finance Minister Shaukat Tarin on Monday said the delay in $1.3 billion Coalition Support Fund (CSF) by the US would increase the budget deficit. The minister, who was replying to questions after the launch of National Saving Bonds, said the US promised to release $1.3 billion in the ongoing fiscal year but the delay would cast negative impact on the budget.
He said that total receivable in lieu of CSF accumulated to $2 billion till December 2009. The minister said had the US released Rs 40 billion of CSF during the first quarter Pakistan would have controlled the budget deficit but the money did not come even in the second quarter. He said Pakistan was given firm commitment of receiving $1.4 to $1.8 billion in the ongoing fiscal year.
Tarin said the government was aware of the fact that the commitments made by the FoDP might not materialise in time and that is why additional facility from the IMF was sought in the stand-by-agreement. He hinted that the government might have to opt for some measures in the fourth quarter if the revenue target of Rs 1396 billion was not achieved. However, he dismissed the impression that there was any proposal of mini-budget under consideration.
He admitted the increase in expenditure, which he said, could be met only by enhancing revenue. He expressed the hope that Rs 125 billion revenue target for December 2009 would be achieved. To a question about implementation of austerity plan, he said that meeting of the committee would be held this week to finalise and announce long and short-term measures.
To another question, Tarin said the governments in the past used such schemes to meet their expenditures. This would not happen again and the circular debt of Rs 300 billion would also be settled through bonds. He said the borrowing of the CDNS is possible but the fiscal deficit could not be reduced.
Giving details of the National Saving Bonds, Zafar Sheikh Director General of National Saving said the NBS offers a safe, easy way to save money with upside potential capital gains. He said the bonds will be tradable in the three stocks markets. He said these bonds would be available in the NSC from January 1 to January 25 and their trading in the three bourses would start from February 25. He said the minimum value of the bonds would Rs 20,000 while maximum limit was not determined.