The discussion and debates on budget are generally made in technical terms due to which the common man is not able to understand what is there in Pakistan’s budget. In this article very complicated issues are handled in the most possible lucid manner.

The conclusion is that things are not in control; however, there are solutions for achieving sustainable development.

The International Monetary Fund (IMF) in its report of May 2025 has included Table 4a. Pakistan: General Government Budget, 2019/20–2029/30. This table provides the cash inflows and outflows of Pakistan, including provinces for ten years.

Table A

These figures are also in line with the budget that would be presented by the government today.

For an accountant the story is very simple. The deficit is almost equal to or slightly higher than domestic interest expense. That domestic interest is not actually paid. It is actually further borrowing from the same sources. So actually nothing is done.

Taxes are collected by squeezing economic activities and the funds so collected are spent essentially for current expenses. The budget for development expenditure on an overall basis is around 10 percent only. So, in order for simplicity financial adjustment is excluded, then the position emerges as under:

Table B

This means that in Pakistan there are two budgets.

On an overall basis there is an inflow of Rs 18,402 billion (out of which Rs 13,316 billion is from a limited number of people from taxes). There is an expenditure, most of which is current, of Rs 24,888 billion out of which Rs 7,938 billion is domestic interest. This results in a deficit Rs 6486 billion which is again borrowed from the people to whom the interest is paid.

The borrowing from the bank is Rs 4,090 billion and other saving schemes, etc. 1,753 billion. The calculation and working is very simple and straightforward.

The other is the budget for the banks who have lent to the government. They do book entries on a yearly basis. Under those book entries the Asset being ‘Loan to Government’ increases on a year to year basis. This increase finances around 80 percent of the budget deficit of the government for that year. The status of domestic debt is as under:

Rs Billion

2020: 23,875

2021: 26,959

2022: 31,858

2023: 39,655

2024: 47,160

2025: 54,789

2026: 60,861

2027: 65,629

2028: 71,019

2029: 75,995

2030: 80,841

Then there is another book entry of interest income on that loan. That interest income is never received. It forms part of the new debt given. Out of the interest income around 90 percent of the sum is paid to........

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