By Bilal Hussain — Here comes the New Year: 2017, I wish all the readers of Oman Observer a happy, peaceful and prosperous New Year! For a financial columnist, the year has to begin with a plan and financial planning commences with budgeting.
The Government of Oman came out with a budget on expected lines, focusing well on people and development.
The 2017 budget to a great extent has contained the public expenditure and at the same time has increased non-oil revenue base for the government.
Keeping intact the budget figures for 2017, the Government of Oman has announced the austerity financial plan with minor change in spending and revenues numbers of last year. Focus seems to be on controlling government expenditure and expanding revenue base.
Like other Gulf countries, oil is the main source of income for the Government of Oman. And the budget has been worked out on the expectations that the oil prices per barrel would go on an average of $45.
Currently, the oil prices at NASDAQ are hovering around at $53 and if it continues in that range the fiscal deficit will definitely go down.
According to the Ministry of Finance, Oman’s total public spending is estimated at about RO 11.7 billion, decreasing by RO 200 million compared to 2016.
While, the revenues are estimated at RO 8.7 billion, increasing by 18 per cent as compared to projected actual revenues for 2016. The budget deficit is estimated at RO 3 billion 35 per cent of total revenues and 12 per cent of gross domestic product (GDP).
Looking at the current expenditures; salaries and entitlements of the employees stands at RO 3.3 billion, represents 75 per cent of total current expenditures.
This is the main reason that the public sector might not be recruiting this year at all.
The spending on the development projects is estimated at RO 1.2 billion which has been kept same so at to ensure on time completion of many developmental projects.
However, total allocations for security and defence is anticipated at RO 3.34 billion which is 5 per cent less compared to 2016. And the expenditure on account of subsidies are estimated at RO 395 million, almost at the same level as last year.
While, the major portion of the revenues is expected to come from oil and gas at RO 6.11 billion representing 70 per cent of total revenues. Non-oil revenues are estimated around RO 2.59 billion. The government is planning to borrow internationally RO 2.1 billion, and RO 400 million through domestic borrowing.
Though, I found the budget of Oman a clear elaborations of how the government is planning to spend, where from the revenue is expected and how they are going to bridge the gap with the deficits, however, a sector wise detailed report would have been better way.
This will ensure which sectors government is focusing and also would emphasise on need for overall development of all the basic sectors of the economy.