The statistics on fiscal operations by the Federal and the Provincial governments have been released by the Ministry of Finance for the first six months of 2024-25. An examination of the summary reveals a substantial improvement in the state of public finances in the country compared to the outcome in the first half of 2023-24.

There has been a decline in the consolidated budget deficit from 2.3 percent of the GDP to 1.2 percent of the GDP. Further, the primary surplus has jumped up from 1.7 percent of the GDP to 2.9 percent of the GDP. There is need to identify the reasons for this big improvement.

Also, the good news is that a number of quantitative performance criteria and indicative targets for December 2024 in the IMF programme have been successfully met, as follows:

(i) Floor on primary surplus of Rs 2,877 billion. The actual primary surplus is Rs 3,603 billion.

(ii) Floor on the aggregate provincial cash surplus of the four provinces combined of Rs 750 billion. The actual provincial cash surplus is Rs 775 billion.

(iii) Floor on provincial tax revenues of Rs 376 billion, with the actual revenues significantly higher at Rs 443 billion.

There is one major indicative target which has not been met. This is with regard to FBR (Federal Board of Revenues) revenues. The floor for the first six months of revenue was Rs 6,009 billion. The........

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