July 1, 2019: Prime Minister's Advisor on Finance Dr Abdul Hafeez Shaikh says handling current account deficit, strict austerity measures, helping downtrodden, facilitating industry, and mobilizing revenues are the five fundamentals of next year's budget.
He was addressing a news conference, flanked with Prime Minister's Special Assistant on Information Dr Firdous Ashiq Awan, Minister of State for Revenue Hammad Azhar, and Chairman FBR Shabbar Zaidi in Islamabad on Sunday.
The Advisor said Pakistan's total debt has mounted to around 31,000 billion rupees, whereas the foreign loans have touched the figure of 100 billion dollars.
He said there was a great stress on Pakistani rupee due to growing gap between exports and imports. He said several measures have been proposed in the new budget to control this external threat.
The Advisor said current account deficit has been brought down from 20 billion dollars to 13.5 billion dollars by imposing tariffs to decrease the imports, and this policy will continue in the next budget as well. He said steps have been proposed in the next budget to reduce that deficit from 13.5 billion to 7 billion dollars.
The Advisor said 9.2 billion dollars were mobilized bilaterally from friendly countries, in addition to a three billion dollars' oil facility from Saudi Arabia on deferred payments.
He said 1.5 billion dollars have been promised by Islamic Bank and an agreement of three billion dollars has been signed with Qatar, while about six billion dollars will come from IMF.
Hafeez Shaikh said the government has to repay debt taken by the previous regimes up to 2.9 trillion rupees, while over 50 percent of federal taxes will have to be given to provinces as a constitutional obligation.
He said, to meet all this, in the new budget, 50 billion rupees less have been allocated for expenditure of the civilian government under austerity drive of the Prime Minister. He said that the austerity has started from the top by decreasing salaries of cabinet members by 10 percent, while a raise of just 10 percent has been announced for government employees from grade one to 16. He said employees of grade 17 to 20 will get five percent increase in their salaries, while senior officers of grade 21 and beyond will get no increment.
The Advisor said expenditure of Prime Minister House has been brought down drastically.
The Advisor said armed forces have volunteered to freeze their budget for next fiscal year.
He said budget to help the downtrodden under social safety net has been doubled from 100 billion to 191 rupees. He said cash transfers for needy women will be ensured under this initiative and poor people will also get health cards to cater their medical needs.
Sheikh said 216 billion rupees have been reserved to protect interests of electricity consumers, who use less than 300 units and they are 75 percent of the total consumers.
He said 152 billion rupees have been allocated for the development of newly merged tribal districts with Khyber Pakhtunkhwa, while 925 billion rupees have been ensured for development projects under Public Sector Development Programme.
The Advisor said special priority has been given to Balochistan, South Punjab, and other less developed areas in the PSDP.
Dr Abdul Hafeez Shaikh said industry will get gas and electricity on subsidized rates and tariff on the import of raw material for the industrial sector has been made zero rated. He said all kinds of taxes have been abolished on over 1650 tariff lines so that industry can flourish and ease of doing business can be facilitated in the country.
The Advisor said the government has set a revenue target of 5,500 billion rupees for the next fiscal year as country cannot progress without enhancing tax net.
He also announced to extend the date of Asset Declaration Scheme till Wednesday. He said the extension has been made in view of heavy rush as a large number of people are trying to take benefit of the scheme at the last-minute expiring today.
He urged the people to take benefit of the scheme by documenting their benami assets till expiry of banking hours on Wednesday. He said that a Benami Commission has been formed, which will go after the benami assets after Wednesday.
Dr Abdul Hafeez Shaikh mentioned that the National Assembly passed the budget after a following a democratic process.
He said supplementary grants of just 220 billion were approved in comparison of 600 billion rupees previous supplementary grants.
He said business community, parliamentarians, and other stakeholders were taken onboard regarding the budget under which several changes were made in the finance bill.