the only way we can improve the situation is if tax to gdp ratio improves to 20-25%. that means registering the economy, reduction in haramkhori of tax collectors, an increase in income tax for lower income slabs. the first two parts are challenging for any government due to the legwork required, the last part is unpopular and results in loss of votes. but, an increase in collection would also mean more development spending, meaning more jobs. it would also mean improved health and education infra. all benefiting the public in the long run. but, for that, the provincial govts should be competent as well (which unfortunately some of them are not).Pakistan should withhold PsdP spending for 2 years atleast. Provinces are already doing projects on their own hence the damage won't be that severe. Instead we can use this newly spared money on debt repayment or atleast reducing the budget deficit to zero for those two years.
incorrect comaprison. that 7909 billion figure includes provincial share (nfc etc). deduct that (its more than 3000 billion, i think), and you are left with actual federal receipts. then comes the 8487 billion part, that is the total federal govt spending.It is. Last year we presented a budget where expenses were 578 billion more then revenues . By witholding PSDP spending for two years will give us a surplus budget for those two years. We can actually reduce the harmfulness of deficit budget on the overall economic standing.
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so, shortfall of ~500 billion, plus transfers to provinces (~3400), results in a total shortfall of 3900 billion. that is how much we have to borrow each year. reducing 900 billion psdp will achieve nothing.