June 11, 2019 (MLN): Minister for Revenue, Hammad Azhar presented the country’s Federal Budget 2019-20 in the National Assembly on June 11, 2019.
He started off by describing the economic situation of the country before PTI’s regime. He mentioned that Pakistan’s total debt has reached Rs. 31 trillion because of high-interest debts taken by previous government.
Moreover, he mentioned that foreign exchange reserves had dropped below $10 billion, Current Account Deficit (CAD) had reached $20 billion, whereas trade deficit had reached $32 billion.
“Pakistan received a bailout package from International Monetary Fund (IMF), along with financial assistance worth $6 billion from Saudi Arabia in the form of deferred oil payments to alleviate the burden on foreign exchange reserves” he said.
Salient Features of Budget 2019 – 20 are as follows:
- Budget outlay has been stated to be 30% higher than last year at Rs. 7,022 billion
- Federal revenues to be 19% higher than the previous year at Rs. 6,717 billion
- Amount disbursed to provinces via the 7th National Finance Commission (NFC) award will be 32% higher than the previous year i.e. Rs. 3,255 billion
- CAD will be reduced to 6.5%
- Exports will be enhanced via a revised duty structure
- Power and gas rates will be lowered and Free Trade Agreements will be re-evaluated
- Pakistani will be made a part of the International Value Chain
- Defense budget will remain the same i.e. Rs. 1.15 trillion
- With regards to social welfare programs, four key policies will be introduced
- Rs. 200 billion will be allocated to provide power to consumers belonging to low-income slabs at subsidized rates
- Around one million people shall be provided ration cards under the Ehsas program
- The government’s running expenses will be reduced from Rs. 460 billion to Rs. 437 billion
- Rs 110 billion will be allocated to provide Rs. 5,000 as income support to nearly 5.7 million households every month under the Benzair Income Support Programme (BISP)
- Federal Board of Revenue (FBR) as well as government’s first and foremost priority would be to increase tax revenue in upcoming fiscal year to nearly Rs. 5,550 billion
- Corporate Tax to be maintained
- Approval and implementation of Treasury Singly Account (TSA)
- Fiscal deficit would be 7.1% of GDP i.e. Rs. 3137 billion, while overall fiscal deficit would be Rs. 3.56 trillion
- Tax to GDP ratio targeted at 12.6%
- $2 billion will be generated via privatization of LNG plants to generate, whereas $1 billion will be generated from auction of mobile licenses
- Rs. 152 billion to be reserved for Federally Administered Tribal Areas (FATA)
- Strategies to eliminate money laundering to be formulated
- 80,000 deserving people will be given interest free loans each month
- Civil government expenditure has been cut down from Rs. 460 billion to Rs. 437 billion
- General Sales Tax (GST) on goods will remain static at 17%
With regards to Development budget, he made the following points
- The National Development Programme will be allocated Rs. 1,800 billion, out of which Rs. 950 billion will be spent by federal, Rs. 70 billion on dam projects;
- Rs. 55 billion will be spent on Dasu hydro power project
- Rs. 24 billion will be allocated to Havelian Thakot motorway
- The construction of Samrial Kharian motorway shall be commenced
- Rs. 60 billion will be allocated for human development
- Rs. 45 billion will be spent on higher education
- Rs. 1.2 trillion will be provided for Agriculture
- Rs. 45.5 billion will be earmarked for nine projects in Karachi
- Rs. 10.4 billion and Rs. 30 billion will be provided for water projects under the Balochistan development package
In relation to minimum wages, he made the following points;
- The minimum wage will be increased to Rs. 17,500
- Federal government employees from Grade 1-16 shall be given a 10% pay raise, whereas employees from Grade 17-25 shall be given a 5% pay rise
- Salaries of cabinet members will be slashed by 10%
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