ISLAMABAD—Pakistan Tehreek-e-Insaf government on Tuesday presented its first budget with total outlay of Rs 7.022 trillion for the fiscal year 2019-20, registering growth of 30 percent against the revised budget of Rs 5.385 trillion for current fiscal year (2018-19).
State Minister for Revenues Hammad Azhar presented the budget in the National Assembly, amid protest by the Opposition parties.
The minister said that total federal revenues have been estimated at Rs 6.717 trillion which is 19 percent higher than the previous year’s revenues of Rs 5.661 trillion.
The collection of revenues by Federal Board of Revenue (FBR), he said are estimated to be recorded at Rs 5.555 trillion which are 12.6 percent of Gross Domestic Product (GDP).
The minister of state said out of total revenue collections, an amount of Rs 3.255 trillion would be distributed among the provinces under 7th National Finance Commission (NFC) Award which is 32 percent higher than the current year’s
share of Rs 2.465 trillion.
He said Net Federal Revenues for the upcoming fiscal year have been estimated at Rs 3.46 trillion against the revenues of Rs 3.07 trillion during current fiscal year
which is 13 percent higher.
Similarly, he said the federal budget deficit would be Rs 3.56 trillion whereas the provincial budget surplus is estimated to be at Rs 423 billion for the year 2019-20.
Minister of State for Revenues Hammad Azhar said the consolidated fiscal deficit for the coming year is estimated at Rs.3.137 trillion or 7.1% of the GDP as against 7.2% of the GDP in financial Year 2018-19.
He said with respect to the worst economic situation, inherited by the incumbent government around 10 months ago, when total debt and liabilities had reached to
over Rs 31,000 billion, foreign debt and liabilities were around US$97 billion, foreign exchange reserves with State Bank of Pakistan had fallen from $18 billion to less than $10 billion and Current Account Deficit touched the historical mark of $20 billion, it had to take measures to control the situation.
Presenting the measures taken by the government to stabilize economy, Hammad Azhar said imports duties were increased to cut trade deficit by $4 billion in 10 months.
He said during the period, remittances were increased by $2 billion, and electricity circular debt which had reached Rs.38 billion per month, was brought down by Rs.12 billion to Rs.26 billion per month.
Besides, he said the government also managed to mobilize $ 9.2 billion from China, UAE and Saudi Arabia to support balance of payment situation.
He said due to government’s measures to support industrial sector, higher volumes of exports were witnessed as knitwear exports increased by 16%, readymade garments by 29%, fruits by 11% and vegetables increased by 18%, and basmati rice by 22%.
Similarly, he said an agreement has been reached with the International Monetary Fund (IMF) for a $6 billion programme. Once approved by the IMF board, this programme will have benefits such as generating additional international assistance of $2 – $3 billion from the World Bank and Asian Development Bank at relatively lower interest rates and achieving stabilisation of the economy and build a sustainable platform for growth.
“A deferred payment facility of $3.2 billion for purchase of oil and gas products from Saudi Arabia was also acquired to reduce pressures on foreign reserves besides operationalising Islamic Development Bank for deferred payment facility of $1.1 billion”, he said adding with these measures, it is expected that the current account deficit for the year will reduce by $7 billion this year.
With respect to targets of different economic indicators set by the government for the year 2019-20, the minister of state pointed out that by reducing imports and aiming for higher exports, the government wants to bring current account deficit from $13 billion estimated this year to $6.5 billion in 2019-20.
“A challenging target of Rs. 5,555 billion FBR revenue collection will be combined with aggressive expenditure controls to reduce primary deficit to 0.6% of GDP. Both the civil and military governments have announced unprecedented reduction in expenditures”, he said.
- Total budget outlay Rs7,022bn—30% greater than previous year
- Rs1,863 billion fixed for Public Sector Development Programme
- Budget deficit to be Rs3,560 billion
- Tax revenue target set at Rs5,822bn
- FBR tax revenue target set at Rs5,555bn
- Non-tax revenue target set at Rs894.5bn
- Current expenditure set at Rs6,192bn
- Development expenditure set at Rs843.4bn
- Rs701bn earmarked for Federal PSDP
- Rs1,152bn fixed for Defence Affairs and Services expenditures
- Civil government expenditure to be Rs431bn
- Higher education expenditure of Rs45bn
- Government sets aside Rs271bn for subsidies
- Inflation targets set at between 5 and 7 per cent
- General sales tax on goods to remain at 17 percent
- 3% value added tax on import of mobile phones eliminated
- Rs5,200 FED proposed on every 10,000 cigarettes
- Sales tax on sugar proposed to be be increased to 17 percent
- Rs40 billion subsidy to be given for electricity, gas
- Development expenditure for tribal districts fixed at Rs152 billion
- Rs45.5 billion allocated for Karachi’s development programme
- Stipend through BISP scheme increased from Rs5,000 to Rs5,500
- Govt aims to eliminate circular debt in coming years
- The government has formed a new ministry to eliminate poverty, which will introduce programs for social safety. People benefiting from the Ehsaas program include the poor, orphaned, homeless, and disabled sectors of the population.
- Ration card scheme being introduced. 80,000 people to benefit from this scheme with interest-free loans.
- Minimum taxable income for salaried class to be Rs0.6mn per annum
- 11 progressive tax slabs ranging from 5 to 35 percent proposed for salaried class
- Minimum taxable income for salaried class to be Rs0.4mn p.a.
- Eight progressive tax slabs ranging from 5 to 35 percent proposed for non-salaried class
- Non-filers no more restricted from purchasing property
- Non-filers to be allowed to purchase property of over Rs5mn
- Corporate tax to remain at 29 percent for next two years
- 10 per cent increase in salaries for government employees from grade 1 to 16, including armed forces employees
- 5 per cent ad hoc relief for government employees from grade 17 to 20
- No increase in salaries for civilian government employees from grade 21 to 22
- Minimum wage set at Rs17,500
- Pensions increased by 10 per cent
- Ministers agree to voluntary 10 per cent cut in salaries