ISLAMABAD – Federal Budget with a total outlay of 7022 billion rupees forthe next fiscal year, containing relief for the poor and measures foreconomic stabilization and fiscal discipline, has been announced.
Minister of State for Finance Hammad Azhar presented the budgetaryproposals in the National Assembly on Tuesday evening.
The resource availability during the next fiscal year has been estimated at7899.1 billion rupees against 4917.2 billion rupees in the budget estimatesof the outgoing fiscal year.
The gross revenue receipts are estimated at 6717 billion rupees, showing anincrease of 18.7 percent over the budget estimates of outgoing fiscal year.
After the share of provinces in gross revenue is transferred, the netreview of federal government has been estimated to be about 3463 billionrupees for the next fiscal year.
The provincial share in federal taxes is estimated at 3254.5 billion rupeesduring the next fiscal year, which is 25.7 percent higher than the budgetestimates for the outgoing year.
The tax revenue for the next fiscal year is estimated at 5822,160 millionrupees, which reflects an increase of 33 percent over revised estimates ofthe current fiscal year.
Out of this, the FBR collection target is 5550 billion rupees, which willbe 12 percent of the GDP.
The Minister of State announced ten per cent ad-hoc relief for thegovernment employees from one to sixteen scales and all personnel of thedefence forces.
Five per cent increase has been announced for public sector employees of 17to 20 grades, while no increase has been made in the salaries of thegovernment employees of 21 and 22 grades.
He also announced increase of ten per cent for all the pensioners.
Minimum wage has also been increased to 17500 rupees.
The conveyance of disabled persons has been increased to 2000 rupees from1000 rupees while special allowance of private secretaries attached withministers and parliamentary secretaries has been enhanced to 25 per cent.
The Minister of State said the Cabinet members have voluntarily agreed to10 per cent cut in their salaries.
Hammad Azhar said the PTI government came to power with new vision andcommitment and to bring change in the lives of people, ensure merit andprotect the vulnerable segments of the society.
The government took a number of steps to correct the course of economy.
Import duties were increased and imports reduced from 49 billion dollars to45 billion dollars. Remittances increased by 2 billion dollars.
Circular debt was reduced by 12 billion rupees per month and it was broughtdown to 26 billion rupees from 38 billion rupees. Financial aid from China,UAE and Saudi Arabia helped stabilize the economy. Incentives for exportsector were increased for three more years.
He said a program of 6 billion dollars has been agreed with IMF. This willhelp us gain 2 to 3 billion dollars loan more at very economical rates. Oilpayment deferred facility from Saudi Arabia will also help reduce pressureon the government.
Seven billion dollars reduction in Current Account Deficit will be achievedthis year, which will be 6.5 billion dollars next year.
The Asset Declaration Scheme will bring the undeclared assets intomainstream and help increase revenue of the government.
Tax policy has been separated from tax administration. Pakistan BanaoCertificates were issued in order to provide benefit to Overseas Pakistanisto invest in Pakistan.
Billion Tree Tsunami and Clean and Green Pakistan initiatives werelaunched. In order to bring FATA into mainstream, special effort has beenmade.
He said in Naya Pakistan, the culture of tax evasion will be overcome.Civil and Defense authorities have agreed to voluntary reduce in theirbudgets.
Their budget has been reduced from 460 billion rupees to 437 billion rupees.
On protection of vulnerable segments of society, the Minister of State saida subsidy of 216 billion rupees will be earmarked for 75 percent consumersusing less than 300 units of electricity.
The government has constituted a new ministry for the poverty alleviation.
A new ration card scheme for one million people is being launched toprovide nutritious food to children and pregnant women.
He said 80,000 people will be provided interest free loans every month.
Five hundred Kifalat Marakiz will be set up and disabled persons will beprovided with assistive aids.
Ehsaas homes will be constructed for elderly people.
The quarterly stipend of 5000 for BISP is being increased to 5500 rupees.
In 50 districts, girls’ stipend money is being increased to 1000 rupeesfrom 750 rupees, besides expanding this service to 100 districts.
He said Sehat Sahulat Cards will be provided to 3.2 million people in 42districts, while in the second phase 15 million people will be providedwith these cards across the country including the tribal districts andTharparkar.
Hammad Azhar said 93 billion rupees are being allocated for education,nutrition, health and clean drinking water.
The Minister of State said the government will not get loans form StateBank of Pakistan and we will focus on good governance and eradiation ofcorruption.
He said 200 billion rupees have been proposed for rail and roads; out ofwhich 156 billion rupees will be spent through National Highway Authority.
For energy, the Minister of State said 80 billion rupees are beingrecommended; out of which 55 billion rupees have been earmarked for DasuHydropower project.
He said 60 billion rupees have been allocated for human development, and arecord fund of 39 billion rupees has been allocated for higher education.
The Minister of State for Finance said an amount of 10.4 billion rupees forsecond phase of Quetta Development package will be earmarked as part ofdevelopment of Balochistan.
He said a sum of 45.5 billion rupees will be spent on nine developmentprojects in Karachi.
Hammad Azhar said employment creation is an important priority area of thegovernment as Pakistan is a country of youth and the number of young peopleis rising.
He said 28 industries will benefit from 5 million housing program of PrimeMinister Imran Khan and create a number of jobs for the youth.
He said work on this project is gaining pace and land has been acquired inIslamabad, Lahore and Faisalabad.
He said the Prime Minister has already inaugurated the project ofconstructing 25000 housing units in Rawalpindi/Islamabad and 110000 unitsin Balochistan.
The state minister said loans worth 100 billion rupees will be granted toyouth to start their businesses under Kamyab Jawan Program.
The Minister of State said the government is giving incentives andsubsidies for the promotion of industrial sector in order to createemployment opportunities for the youth.
The steps include 40 billion rupees each subsidies for energy and exportsector.
He said the government will maintain the long-term trade financing facilityfor the industrial sector.
The Minister of State said the government is commencing 280 billion rupeesfive year programme for the uplift of agriculture sector.
On agriculture tube wells, 6.85 rupees per unit subsidy will be given tothe farmers.
The federal and Balochistan governments have started a joint scheme with aratio of 40:60 for the farmers of Balochistan.
Under this scheme, monthly bill of 10,000 rupees is received from thefarmers while the remaining burden of 75,000 rupees is being borne by boththe governments.
He said the government is also providing insurance scheme to small famersin case of destruction of their crops due to any calamity.
For this purpose, the new budget envisages an amount of 2.5 billion rupees.
Hammad Azhar said the government will introduce a comprehensive programmefor the restructuring of the state institutions in order to improvegovernance and reduce burden on the national exchequer.
This year, he said, two LNG-powered power plants and some smallorganizations will be privatized, which will help generate 2 billiondollars.
He said contacts have been made for foreign investment in Pakistan SteelMills.
Hammad Azhar said the main focus of the development budget is water relatedprojects including dams.
For this purpose, seventy billion rupees has been earmarked.
Twenty billion rupees are being allocated for the land acquisition ofDiamer Basha Dam and fifteen billion rupees for Mohmand Hydro power project.
About rail and road infrastructure projects, the Minister of State saidthat multi-billion dollar China Pakistan Corridor Project will be given duefocus about two hundred billion rupees are being earmarked for this purpose.
Out of this amount 156 billion rupees will be spent through Nationalhighway Authority.
Giving a breakdown of road infrastructure, he said twenty four billionrupees are being allocated for Havelia-Thakot, thirteen billion rupees forBurhan-Hakla motorway and nineteen billion rupees for Sukkur-Multan sectionof Peshawar-Karachi motorway.
In addition, Swat expressway will be extended from Chakdara to Bagh Deheriunder public private partnership.
Sambrial-Kharian Motorway will be constructed while dualization ofMianwali-Muzafargarh road will also be carried out.
The Minister of State for Finance said 58 billion rupees are beingallocated in the budget for the human resource development.
He said health, education, development targets and coping with climatechange are amongst our priorities. For this purpose, funds will beearmarked.
The Minister of State for Finance said our aim during the financial year2019-20 will be to increase the tax net.
Regretting the low tax to GDP ratio, he said the country cannot makeprogress without payment of taxes.
He appreciated the gesture of both the civilian government and the militaryleadership for voluntarily deciding to cut their expenditures.
He said the civil expenditures will be reduced by five percent from 460billion rupees to four hundred and thirty seven billion rupees.
The defense expenditure will be maintained at 1150 billion rupees.
The Minister of State said we are firm for the defense and sovereignty ofthe country, and no compromise will be made on the defense capability ofthe country.
Given the current economic situation, Hammad Azhar said the government hasacted with responsibility and taken steps for the economic stabilization.
We have increased import duty which helped us bring down imports from fortynine billion dollars to forty five billion dollars.
Read Top Stories
He said remittances have witnessed an increase of two billion dollars.
He said the IMF package will also help the country steer the economytowards stability.
Government did not opt the option to increase General Sales Tax at the rateof 17 percent to collect revenue.
The Minister said it has been recommended to decrease the sales tax onbrick kilns from existing rate of 17 per cent and to replace it with inaccordance with space and capacity.
It has also been proposed that sales tax on bakeries and restaurants bereduced from existing 17 percent to 7.5 percent.
The Minister recommended to impose a uniform tax rate of 10 percent onmilk, cream, dry milk and unflavored milk.
Hammad Azhar said exemption on provision of power industries in erstwhiletribal areas has been extended to industrial raw material and import ofplant and machinery.
In the new budget, it has been proposed to impose 17 percent Federal ExciseDuty as sales tax on various steel products.
The budget envisages increase from 64.80 rupees per kilogram to 74.04rupees per kilogram in the rates of CNG for dealers of value region I.
In region II, rates have been increased from 57.60 rupees per kilogram to69.57 rupees per kg.
The budgetary proposals ask for increase of sales tax on sugar fromexisting 8 percent to 17 percent which will likely to raise the price ofthis commodity by mere 3.65 rupees per kilogram.
A seventeen percent sales tax has been recommended on semi processed andcooked products of chicken, mutton, beef and fish.
Seventeen per cent sales tax on marble industry has also been in thefederal budget.
In order to discourage the consumption of sugary drinks, federal exciseduty has been proposed to be 14 percent from existing 11.25 percent.
It has been recommended that the Federal Excise Duty on cooking oil/ghee beincreased to 17 percent.
The FED on cement should be increased from existing 1.2 rupees per kg to 2rupees per kg.
The budget proposals introduce 2.5 percent FED on 1000 cc cars, 5 percenton up to 2000 cc and 7.5 percent on more than 2000 cc cars.
The upper slab of FED on sale of cigarettes has been increased from 4500rupees to 5200 rupees for 1000 sticks.
A tax rebate has been proposed for those employers who will provide jobs tofresh graduates.
Tax limit on salaried class has been set at 600000 rupees per annum whileit will be 400000 rupees per annum for non-salaried class.
It has been proposed that tax rate for companies should be fixed at 29percent for the next two years.
Hammad Azhar said the government believes that rationalization of CustomsTariff is important to promote exports and manufacturing sector.
He said the government is finalizing a reforms package for the Customstariff, which will be implemented in a phased manner.
He said textile machinery and its parts will be exempted from duties togive impetus to this important sector of the economy.
He said raw material used for the production of paper will also be exemptedfrom Customs duty.
He said duty on different types of paper is being reduced to 16 per centfrom 20 per cent, which will help bring down the prices of books in thecountry and encourage the printing industry.
Special measures are also being taken for the publication of Quran.
The Minister of States said different schemes are being simplified topromote exports. He said incentives worth 124 billion have been given tothe industrial sector under different schemes during the first 11 months ofthe current financial year.
The Minister of State said duty on wood is being brought to zero from threepercent in order to protect the domestic forests and encourage themanufacturers of furniture.
Duty on artificial panels of wood is also being reduced to 3 per cent from11 per cent. He said plant and machinery used in the big industries forrefining oil is also being exempted from duty.
There is a proposal to exempt 19 basic items of raw material used inproduction of medicines from three percent duty.
The new budget envisages total development outlay of 1,863 billion rupeesfor the next fiscal year.
The size of federal Public Sector Development Programme has been set at 951billion rupees, which also includes foreign assistance of 127 billionrupees.
Besides, an amount of 912 billion rupees has been allocated for provincialAnnual Development Plans.
During the next fiscal year, the government plans new initiatives such asDistrict Equalization Plan, interventions in the agriculture sector toensure food security, prioritization of construction of mega dams for waterconservancy, interventions in the field of knowledge economy and skilleddevelopment on the youth.
An amount of 210 billion rupees has been earmarked to implement variousphysical planning and housing initiatives including Urban and RegionalPlanning Framework, Smart City Plans and Integrated Strategic DevelopmentPlans, including Prime Minister’s Naya Housing Programme and slumupgradation programme.
Similarly, interventions in the conservancy of environment and improvementin environment through Clean and Green Pakistan and Ten Billion TreeTsunami Programmes have been initiated.
The PSDP allocation for Climate Change Sector has been kept at 1102 millionrupees for the next fiscal year.
The National Agriculture Emergency Program intends to spend 290 billionrupees in the next five years to boost the sector.
The programme will be executed with the coordination of all provinces toensure productivity of major crops, including wheat, sugarcane, cotton,rice, oil seed crops, improvement of water use efficiency and promotinghigh value fish farming.
It also includes calf saving and promoting backyard poultry.
An amount of five billion rupees, including foreign aid of 2.4 billion hasbeen allocated for the governance sector in the next fiscal year. Capacityof public sector will be enhanced for improved public service delivery.
The budget proposes allocation of 63.5 billion rupees for special areasincluding merged districts of Khyber Pakhtunkhwa, Azad Jammu and Kashmirand Gilgit Baltistan.
Further, a special allocation for 75 billion rupees will be provided forequitable Regional Development in order to accelerate development of lessdeveloped areas.
The annual plan aims to improve the capacity of IT sector by enhancinginfrastructure facilities, improving skill quality of human resource andaccelerating implementation of public E services for citizens.
In the upcoming year, special emphasis will be made towards a robustadvocacy and awareness campaign for adoption of family planning servicesand encouraging financing of population sector projects.
Higher Education Commission has been allocated an amount of over 28,646million rupees for the ongoing and new schemes in the next fiscal year.
Allocation for the projects proposed by “Task Force on Technology DrivenKnowledge Development” will be in addition to regular HEC budget.
The HEC budget will be used to transform the universities into world classinstitutions and encourage innovative ideas of researchers.
Ministry of Science and Technology has been allocated an amount of over6231 million rupees.
This includes 921 million rupees for ongoing and 5310 million rupees fornew projects.
The government’s planned initiatives for employment and skill developmentduring the next year will help alleviate unemployment in the country.
The plan focuses to provide and promote technical and vocational trainingby extending geographical access through the public private partnership inmarket demand trades.
In the health sector, the key initiatives to widen the coverage of healthcare spending and achieve health targets include increase in the number ofparamedical staff, expansion of lady health workers programme,strengthening of primary healthcare with backup of skilled personnelincluding women, medical officers in basic health units, establishment ofhealth emergency surveillance and response system, implementation of anational plan for vaccination and establishing a health information anddisease surveillance system.
Micro health insurance schemes will be made part of existing social safetynets to extend health coverage to the vulnerable segments of the society.
An amount of over 516 million rupees has been allocated for digitization ofproduction and transmission infrastructure of Pakistan Television and RadioPakistan with thrust on reaching out to far-flung areas of the country.
The services of Radio Pakistan will be expanded to the uncovered areas.
An amount of over 128 million rupees has been allocated for conservationand promotion of rich and diverse cultural heritage of Pakistan.
The annual development plan also envisages upgradation of powertransmission and distribution system in order to reduce line losses andcheck power theft.
Since construction of large take substantial time, quick alternatives willbe adopted like construction of medium and small dams.
Out of total water sector’s development budget, amounting to 71.9 billionrupees, an amount of about 56.5 billion rupees has been proposed for systemaugmentation for the next fiscal year.
An allocation of over 237 billion has been made for development programmeof Transport and Logistics sector.
Giving an overview of the economic situation when the PTI government cameto power, Minister of State for Finance Hammad Azhar said the country wasfacing overall debt of 31000 billion rupees including 97 billion dollars ofexternal debt.
The foreign exchange reserves had dropped to 10 billion dollars.
He said trade deficit was 32 billion dollars while current account deficittouched 20 billion dollars all due to financial mismanagement of theprevious government.
Circular debt had reached 1200 billion rupees at a rate of 38 billionrupees per month.
A loss of 1300 billion rupees was being faced by public sectorinstitutions. This was unsustainable and as a result the rupee startedfalling in December 2017.
Minister-in-Charge for Finance, Revenue and Economic Affairs Hammad Azharintroduced “The Finance Bill, 2019” in the National Assembly.
The Bill is aimed at giving effect to the financial proposals of theFederal Government for next fiscal year and to amend certain laws.
The House has been adjourned to meet again on Friday at 10:30 a.m.
Earlier, the Federal Cabinet meeting chaired by Prime Minister Imran Khantoday gave approval to the budgetary proposals for fiscal year 2019-20.
The cabinet discussed the proposals that focused on economic stability andsustainable growth, with an emphasis on austerity, revenue generation anduplift of down-trodden.
Meanwhile, People belonging to different walks of life especiallybusinessmen and industrialists have hailed Federal Budget for the nextfiscal terming it a a good omen for solution of current economic crisis.
