Islamabad (Staff Report/Agencies): Minister of State for Revenue Hammad Azhar on Tuesday presented federal budget for the fiscal year 2019-20 in the National Assembly.
Salient features of FY2019-20 budget
Budget deficit to be Rs3,560 billion
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
Pensions increased by 10 per cent
Minimum wage set at Rs17,500
Ministers agree to voluntary 10 per cent cut in salaries
Rs1,863 billion fixed for Public Sector Development Programme
Tax revenue target set at Rs5,822bn
Non-tax revenue target set at Rs894bn
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
Government sets aside Rs271bn for subsidies
Inflation targets set at between 5 and 7 per cent
Rs40 billion subsidy to be given for electricity, gas
Development expenditure for tribal districts fixed at Rs152 billion
Increase in circular debt has fallen from Rs38 billion to Rs24 billion.
Govt aims to eliminate circular debt in coming years
Rs45.5 billion allocated for Karachi’s development programme
Stipend through BISP scheme increased from Rs5,000 to Rs5,500
According to Radio Pakistan, The new budget envisages total development outlay of 1,863 billion rupees for the next fiscal year.
The size of federal Public Sector Development Programme has been set at 951 billion rupees, which also includes foreign assistance of 127 billion rupees. Besides an amount of 912 billion rupees has been allocated for provincial Annual Development Plans.
During the next fiscal year, the government plans new initiatives such as District Equalization Plan, interventions in the agriculture sector to ensure food security, prioritization of construction of mega dams for water conservancy, interventions in the field of knowledge economy and skilled development on the youth.
An amount of 210 billion rupees has been earmarked to implement various physical planning and housing initiatives including Urban and Regional Planning Framework, Smart City Plans and Integrated Strategic Development Plans, including Prime Minister's Naya Housing Programme and slum upgradation programme.
Similarly, interventions in the conservancy of environment and improvement in environment through Clean and Green Pakistan and Ten Billion Tree Tsunami Programmes have been initiated.
The PSDP allocation for Climate Change Sector has been kept at 1102 million rupees for the next fiscal year. The National Agriculture Emergency Program intends to spend 290 billion rupees in the next five years to boost the sector.
The programme will be executed with the coordination of all provinces to ensure productivity of major crops, including wheat, sugarcane, cotton, rice, oil seed crops, improvement of water use efficiency and promoting high 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 has been allocated for the governance sector in the next fiscal year. Capacity of public sector will be enhanced for improved public service delivery.
The budget proposes allocation of 63.5 billion rupees for special areas including merged districts of Khyber Pakhtunkhwa, Azad Jammu and Kashmir and Gilgit-Baltistan.
Further, a special allocation for 75 billion rupees will be provided for equitable Regional Development in order to accelerate development of less developed areas and 22 billion rupees are set aside for 10 year development plan of merged districts.
The annual plan aims to improve the capacity of IT sector by enhancing infrastructure facilities, improving skill quality of human resource and accelerating implementation of public E services for citizens.
In the upcoming year, special emphasis will be made towards a robust advocacy and awareness campaign for adoption of family planning services and encouraging financing of population sector projects.
Higher Education Commission has been allocated an amount of over 28,646 million rupees for the ongoing and new schemes in the next fiscal year.
Allocation for the projects proposed by "Task Force on Technology Driven Knowledge Development" will be in addition to regular HEC budget. The HEC budget will be used to transform the universities into world class institutions and encourage innovative ideas of researchers.
Ministry of Science and Technology has been allocated an amount of over 6231 million rupees. This includes 921 million rupees for ongoing and 5310 million rupees for new projects.
The government's planned initiatives for employment and skill development during the next year will help alleviate unemployment in the country.
The plan focuses to provide and promote technical and vocational training by extending geographical access through the public private partnership in market demand trades.
In the health sector, the key initiatives to widen the coverage of health care spending and achieve health targets include increase in the number of paramedical staff, expansion of lady health workers programme, strengthening of primary healthcare with backup of skilled personnel including women, medical officers in basic health units, establishment of health emergency surveillance and response system, implementation of a national plan for vaccination and establishing a health information and disease surveillance system.
Micro health insurance schemes will be made part of existing social safety nets to extend health coverage to the vulnerable segments of the society.
An amount of over 516 million rupees has been allocated for digitization of production and transmission infrastructure of Pakistan Television and Radio Pakistan with thrust on reaching out to far-flung areas of the country.
An amount of over 128 million rupees has been allocated for conservation and promotion of rich and diverse cultural heritage of Pakistan.
The annual development plan also envisages upgradation of power transmission and distribution system in order to reduce line losses and check power theft. Since construction of large take substantial time, quick alternatives will be adopted like construction of medium and small dams.
Out of total water sector's development budget, amounting to 71.9 billion rupees, an amount of about 56.5 billion rupees has been proposed for system augmentation for the next fiscal year.
An allocation of over 237 billion has been made for development programme of Transport and Logistics sector.
Giving an overview of the economic situation when the PTI government came to power, Minister of State for Finance Hammad Azhar said the country was facing overall debt of 31000 billion rupees including 97 billion dollars of external debt.
The foreign exchange reserves had dropped to 10 billion dollars. He said trade deficit was 32 billion dollars while current account deficit touched 20 billion dollars all due to financial mismanagement of the previous government.
Circular debt had reached 1200 billion rupees at a rate of 38 billion rupees per month.
A loss of 1300 billion rupees was being faced by public sector institutions. This was unsustainable and as a result the rupee started falling in December 2017. He said the government took a number of steps to correct the course of economy.
Import duties were increased and imports reduced from 49 billion dollars to 45 billion dollars.
Circular debt was reduced by 12 billion rupees per month and it was brought down to 26 billion rupees from 38 billion rupees.
Financial aid from China, UAE and Saudi Arabia helped stabilize the economy. Incentives for export sector were increased for three more years. He said a programme of 6 billion dollars has been agreed with IMF.
This will help us gain 2 to 3 billion dollars loan more at very economical rates. Oil payment deferred facility from Saudi Arabia will also help reduce pressure on the government.
Seven billion dollars reduction in Current Account Deficit will be achieved this year, which will be 6.5 billion dollars next year.
The Asset Declaration Scheme will bring the undeclared assets into mainstream and help increase revenue of the government.
Tax policy has been separated from tax administration.
Pakistan Banao Certificates were issued in order to provide benefit to Overseas Pakistanis to invest in Pakistan. Billion Tree Tsunami and Clean and Green Pakistan initiatives were launched.
He said in Naya Pakistan, the culture of tax evasion will be overcome. Civil and Defense authorities have agreed to voluntary reduced in their budgets.
The Minister of State for Revenue said our aim during the financial year 2019-20 will be to increase the tax net.
Regretting the low tax to GDP ratio, he said the country cannot make progress without payment of taxes.
He appreciated the gesture of both the civilian government and the military leadership for voluntarily deciding to cut their expenditures. He said the civil expenditures will be reduced by five percent from 460 billion 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 of the country, and no compromise will be made on the defense capability of the country.
Given the current economic situation, Hammad Azhar said the government has acted with responsibility and taken steps for the economic stabilization.
We have increased import duty which helped us bring down imports from forty nine billion dollars to forty five billion dollars. He said remittances have witnessed an increase of two billion dollars. He said the IMF package will also help the country steer the economy towards stability.