BUDGET 2014-15 (Development Expenditure)

6

1. INTRODUCTION
The governments use fiscal strategy tools, to attain their desired goals. In that procedure deficit
budget strategy is a well-known tool of fiscal strategy in order to upsurge the rate of growth.
Commonly when private and overseas investment becomes deficient for ideal production, then
government strategies to spend available capitals in diverse sector of economy. In recent years
many developed and developing countries have skilled the budget deficits, supposed to be the
result of over-expansionary fiscal actions of strategy-makers. In developing countries, the
government hinge on upon deficit financing due to its incapability to mobilize local resources
adequately and system disaster to manage the expenses according to the revenues.
The Federal Development budget is proposed to be fixed at Rs525 billion.
For DiamerBhasha dam Rs10 bn had been owed for the attainment of land while Rs15 billion are
being reserved for the next fiscal. Funds for other barrages in different provinces are also being
owed. Denationalization of the state retained organizations will be assumed and the proceeds will
be consumed for the development of the people.
1.1. Critical Background
Pakistan has a history of macroeconomic inequities and until freshly has tremendously high
overseas (as well as domestic) debt, decreasing level of international reserves, depreciation of
currency day by day, high inflation, high nominal interest rates, continuous budget and current
account deficits with un-sustainable, low growth.

BUDGET 2014-15 (Development Expenditure)

7

What is budget?
An estimate of prices, revenues, and incomes over a stated period, sparkly a reading of future
financial conditions and goals.
What is deficit budget?
A status of financial health in which disbursementssurpass revenue. The term "budget deficit" is
most normally used to refer to government outlay rather than business or discreteoutlay. When
referring to ensued federal government deficits, the term "national debt is used.
What is the concept of deficit, why government make deficit budget?
Budgetary deficit is multi-dimensional concept. It is fairly easy to say that a budgetary deficit is
simply the surplus of public disbursement over public income. However, in repetition, the
concept confesses of many differences, and harvests widely divergent measures of budgetary
deficit.
The choice of the correct ration would depend upon the resolution of examination. Concepts of
deficit are as follows:
Revenue Deficit
Capital Deficit
Primary Deficit
Fiscal Deficit
Monetized Deficit