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Chartalistsclaim that deficit spending is logically essential because, in their view, sanction
money is created by deficit spending: sanction money cant be composed in taxes before it is
issued and expended; the amount of sanction money in movement is accurately the government
debt money spent but not placid in taxes. In a quip, "sanction money governments are 'spend
and tax', not 'tax and spend'," deficit expenditure comes first. Chartalistsclaim that nations are
essentiallydissimilar from families. Governments in a sanction money scheme which only have
debt in their personal currency can issue other obligations, their sanction money, to pay off their
interest manner bond debt. They cant go bankrupt unwillingly because this sanction money is
what is used in their economy to resolve debts, while household obligations are not so used.
A macroeconomic model founded on the ideologies of Keynesian economics that is used to
recognize the equilibrium level of, and investigate commotions to, collective creation and
revenue.
1.1. Research Article
The research article A Critical Evaluation of the Budgetary Process for Public Expenditure
in Pakistan was written By Sarfraz Khan Qureshi. The author discussed that effective public
outlay administration places heavy strains on currentgovernment institutions and has a much
broader scope than the preparation andoperation of conservative expenditure budgets. The
preparation of ansuitable macroeconomic agenda, selection of developments on a sound
basis,proper scheming of public sector investment programs and suitable connectionsbetween
planning and budgetary procedures is as, if not more, important than theslight focus on
expenditure budgeting.
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Notwithstanding the standing of these wider features of budgetary issues,this paper does not deal
with such public outlay administration issues. Instead itessences on a report and an examination
of the preparation process ofgovernment outlay costing.
The vital thrust of the opposite act between the top-down and the bottom- up approach to costing
involves a compromise between the governments overall fittedeconomicbounds on
amassedoutlay and the heavy rivalstrains for different resolutions by different organizations.
The definition of development outlay is helpful in isolating items of outlay into the two classes
of development or current outlay for budgeting drives particularly because planning for the
development determinations is the accountability of the Development Command and planning
for current outlay is the key responsibility of the Ministry of Finance.
The fiscal year in Pakistan turns from July 1 to June 30. The budget approximations for
dissimilar items of outlay, equipped by diverse ministries, are analyzed and accepted by the
Ministry of Finance rendering to an approved process and time program. The budget estimations
are organized in two parts.
The Budget Section of the Ministry of Finance plays a foremost role in thepreparation of budget
estimations. This Section matters a set of Budget Call Circulars in October every year
demanding all Federal Ministries and other organizations to make and submit revised estimations
for the present year and the budget estimations for the next financial year.Preparation of the
reread estimations each year leads the preparation of the budget estimations.
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The Circular also needs that amid other records the outlay actuals of the last eight months of the
earlier year and the first four months of the current fiscal year should also be comprised in these
forms.
The Annual Development Package (ADP) in Pakistan deals with development or capital outlay.
Only ventures that are merged in the Annual Development Package (ADP) get reserves
mandatory for their execution.
The Finance Division (Budget Section) issues an Office Memo in October each year placing
down the "process for submission of Revised Estimations for the outward year and the Budget
Estimations for the resultant year in esteem of Development Outlay" to all ministries/divisions of
the National Government, independentorganizations/companies.
An inter-Ministerial consultation of the Administrators of Finance, Development andFinancial
Affairs Partitions held under the Chairmanship of the Secretary of
Finance inspects the estimations of capitals as organized by the approximating establishments.
The Programming Unit of the Preparation and Development Division in discussion with the
Technical Units anxious works out the unsure sectorial distributions, in the light of the reserve
obtainability, the broad policy rules combined in the circular letter and sectorial urgencies
pronounced in the presently effective Five-Year Plan. After endorsement by the Deputy
Chairman, Planning Commission, the unsure break-up of sectorial distributions is conveyed to
the Central Ministries/Divisions and the Regional Planning and Development and Finance
Departments correspondingly.

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The ADP suggestions received from the Central Ministries/Divisions and independent
organizations/companies are inspected by the Technical Units of the Planning and Development
Unit.
In conclusion, it needs to be pointy that the incremental method to outlaycosting with esteem to
current outlay is also a norm for the majority of development outlay. The Priority Committee
ascribes the top-most urgency for the conclusion of on-going structures which, on the regular,
each year pre-empt more than 80 percent of development outlay. Outlaycosting as
presentlyactualityfinished is on an annual base.
The position of operative administration of public outlay alongside the back drop of plain
financial alterations since the 1970s when the Pakistani economy was faced with a sequences of
outside shocks, has been broadly known by people in all units of society.
The paper delivers an excellent report of the official set-up in the Central Government for
making the budget. It is a struggle in the wanted direction. The paper also delivers an economic
viewpoint to government representatives who would profit from it to know the workings
elaborate in budget-making. The writer has made an extraordinary influence in the logic that
with it the long unsettled request of the Government representatives involved in budget
preparation has been met.
There are convinced areas which are important in the set-up which could not bestated in the
paper. Before the Government legally takes up the training of the budget, communication with
the private area takes place. It is institutionalizedunderneath an Advisory Board of the
Ministry of Finance on which Industry, Agriculture, Trade, Labor, Economists and Tax
Experts are signified.
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Rules and standards which guide the choices of government representatives and at different
phases of budget-making are left down. This is a long procedure and could not be sheltered by
simply saying that the 'Top down' and 'Bottom- up' methods are submissive. No disbelief it is
basic to every economic and financial executive but budgeting-making is abundant more than
that.
To conclude, notwithstanding many inadequacies, the paper is a welcome effort in the field of
budget-making. It is sole in the sense that it would be welcomesimilarly by investigators and
government representatives not fully aware with theeconomists waffle.
2. METHODOLOGY
The data in this report has been collectected through secondary resources i.e budget 2014-15 and
budget 2013-14. The budget we have discussed is of FY 2014-15. The topic we took is
government expenditure and the major topic is development projects. In which we have
highlighted that how government expenditure of budget 2014-15 can effect on development of
ongoing and upcoming projects in Pakistan.
3. GOVERNMENT EXPENDITURES
The budget 2014-15 has the following salient features:
The total outlay of budget 2014-15 is Rs 4,302 billion. This size is 7.9% higherthan the
size of budget estimates 2013-14.
The resource availability during 2014-15 has been estimated at Rs 4,074 billionagainst Rs
3,011 billion in the budget estimates of 2013-14.
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The net revenue receipts for 2014-15 have been estimated at Rs 2,225 billionindicating an
increase of 16% over the budget estimates of 2013-14.
The provincial share in federal revenue receipts is estimated at Rs 1,720 billion during
2014-15, which is 14.5% higher than the budget estimates for 2013-14.
The net capital receipts for 2014-15 have been estimated at Rs 691 billionagainst the
budget estimates of Rs 493 billion in 2013-14 i.e. an increase of40%.
The external receipts in 2014-15 are estimated at Rs 869 billion. This shows anincrease
of 50.7% over the budget estimates for 2013-14.
The overall expenditure during 2014-15 has been estimated at Rs 4,302 billion,out of
which the current expenditure is Rs 3,463 billion and developmentexpenditure is Rs 839
billion. Current expenditure has been estimated to behigher than the revised estimates for
2013-14 by 8.3%, while developmentexpenditure lower by 2.4%.
The share of current expenditure in total budgetary outlay for 2014-15 is 80.5%as
compared to 78.8% in revised estimates for 2013-14.
The expenditure on General Public Services is estimated at Rs 2,543 billionwhich is
73.4% of the current expenditure.
The size of Public Sector Development Programme (PSDP) for 2014-15 isRs 1,175
billion. Out of this, Rs 650 billion has been allocated to provinces.Federal PSDP has been
estimated at Rs 525 billion, out of which Rs 296billion to Federal Ministries / Divisions,
Rs 176 billion to Corporations, Rs 12.5billion to Pak Millennium Development Goals and
Community DevelopmentProgramme, Rs 36 billion to Federal Development Programme
/ Projects for