ISLAMABAD: The Auditor General of Pakistan (AGP) has raised significant concerns regarding the country’s worsening financial situation. The AGP’s report highlights that less than 4 percent of the over Rs38.67 trillion budget for FY23 was allocated for socio-economic services. Additionally, approximately 93 percent of supplementary grants, totaling over Rs8 trillion, were not approved by Parliament and remain unspent, leading to a waste of public resources.
According to the audit report for the fiscal year 2023-24, key issues in financial management for FY22-23 include “unnecessary allocation of supplementary grants, unassessed budget demands, unutilized funds due to untimely surrender, and poor budget management due to unrecorded commitments.”
The report notes with concern that rising debt servicing costs have increasingly crowded out spending on socio-economic services, negatively impacting citizens’ living standards. Debt servicing costs rose from Rs25 trillion (about 84 percent of total expenditure) in FY22 to Rs34 trillion (approximately 91.4 percent of Rs38.67 trillion) in FY23. This represents a 37 percent increase (Rs9 trillion) in absolute terms and a 7.5 percent increase in the share of total expenditure.
The audit reveals that a high proportion of expenditure, 96.26 percent, was allocated to General Public Services, which includes debt servicing, defense, and civil government expenses. Specifically, 91.42 percent of this was for debt repayment and interest payments during FY22-23, compared to 83.93 percent the previous year. Consequently, only 12 percent of total expenditure was available for socio-economic functions, a decrease from the previous year’s 16.07 percent.
The report also points out that the federal government issued supplementary grants totaling Rs8.68 trillion, of which Rs8.05 trillion lacked parliamentary approval, meaning that nearly 93 percent of these grants were unauthorized.
The Financial Statement for FY23 shows an increase in domestic floating and permanent debt receipts to Rs25.17 trillion and Rs7.29 trillion, respectively, compared to Rs17.94 trillion and Rs6.53 trillion in FY22. However, foreign debt receipts decreased to Rs2.88 trillion from Rs3.08 trillion the previous year. During FY22-23, the federal government repaid Rs22.63 trillion in floating and Rs2.46 trillion in permanent domestic debts, along with Rs3.24 trillion in foreign debt.
