Fiscal Situation in Pakistan and its consequences for Economic Growth and Poverty
Naeem Akram, Ihtasham ul Haq Padda, Muhammad Khan, Muhammad Iftikhar ul Husnain

A sound fiscal position is an essential pre-requisite for achieving macroeconomic stability and is a critical ingredient of sustainable economic growth and poverty reduction. Better fiscal management helps mobilize domestic savings, increase efficiency of resource allocation and achieve other worthwhile development goals. On the other hand, lax fiscal policy limits options open to the government for economic recovery, sustainable growth and poverty alleviation. The present study evaluates the fiscal situation in Pakistan and sheds light on its implications for Economic Growth and poverty reduction. Study finds that Pakistan economy have shown great resilience over the years against disastrous events. However, situation of poverty reduction is not satisfactory; Pakistanā€˜s health and education indicators depict a dismal picture when compared with the countries with same level of development. As revenue generation efforts was only partially successful and Pakistan was unable to generate adequate revenues to meet expenditure. Consequently, successive governments have tried to reduce the deficit by reducing the development expenditure which hampered the growth process and resulted in a decline in human development indicators and increased the incidence of poverty.

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