Pakistan
PTI govt presents its third annual budget with Rs8.48tr outlay amid opposition uproar
Islamabad: The Pakistan Tehreek-e-Insaaf-led government has presented annual budget of fiscal year 2021-22 with total outlay of Rs8.48 trillion (Rs8,487 billion).
Federal Finance Minister Shaukat Tarin, who is presenting the third budget of the incumbent government, began his speech amid opposition uproar.
As the minister began his budget speech, opposition benches started shouting slogans and taunting the minister while laughing loudly as he praised PM Imran Khan's economic policies.
Tarin said it was an honour for him to present the PTI's third budget, there were a lot of difficulties but this government had laid the ground for the economy to revive and now "it is going towards development and prosperity".
He recalled that when the PTI took reigns of the government, the economy had gone almost bankrupt. "Everyone knows we were under the burden of so many loans," he said, adding that the current account deficit was at a historic high of $20 billion.
"During this time, exports were contracting and there was over a 100 per cent increase in imports," Tarin added. "Despite this context, a 5.5pc growth rate was harped on about."
Revealing details of the budget document, the minister said the total outlay of the budget had been kept at Rs8,478 billion and tax collection target at Rs5,829 billion.
The overall budget deficit is expected to remain around 6.3 percent during FY22 as compared to revised estimates of 7.3 per cent.
He said the federal expenditures were budgeted at Rs8,487 billion for next year as compared to the revised ones of Rs7,341 billion for 2020-21, showing an increase of 15 per cent.
Tarin said the current expenditure was projected at Rs7,523 billion for next year against Rs6,561 billion for last year, reflecting an increase of 14 percent.
Excluding interest and non-off expenditure on Covid-19 and settlement of IPP (Independent Power Producers) dues, the current expenditure was projected to increase by 12 percent, he added.
The subsidies, he said, were projected at Rs682 billion for next year against revised estimates of Rs 430 billion last year, mostly comprising payments of dues of IPPs, tariff differential subsidies and subsidies on food.
He said the foreign exchange reserves stood at $6 billion in 2013,while the current account deficit was at historic high of $20 billion.
“The government has brought down the CAD deficit with $800 million surplus,” the minister told the House, adding the government managed to overcome the CAD.
According to the minister, the previous government used to obtain loans without any justification that led to the economic disaster.
The budget deficit remained 6 per cent and tax receipts witnessed 18 per cent growth. The govenrment has earmarked Rs1.3 trillion for defence and Rs66 billion for higher education.
The minister announced 10 per cent increase in pays and pensions of serving and retired government employees.
“The exports have surged 14 per cent in the previous fiscal year, while remittances are expected by the end of month to reach up to $29 billion after 25 per cent increase.”
Train said the foreign exchange reserves stood at $16 billion that are almost equal to three months payments.
“We have set the annual growth at 4.8 per cent for the current fiscal year and will not let the poor and destitute at the mercy of inflation.”
He said the government would provide farmers with Rs200,000 subsidy for tractors and parts, adding the government had decided to provide interest-free loans of up to Rs500,000 to the poor.
The government has allocated Rs260 billion for Ehsaas Programme. The minister said Rs2,000 Daily wage have been fixed for daily wage earners.
The government has earmarked Rs100 billion to overcome corona pandemic crisis, the minister said, adding the govenrment has reduced sales tax on locally manufactured cars from 17 per cent to 12.5 per cent.
Accoridng to Train, Pakistan has witnessed historic growth in agriculture sector apart from Cotton, all other crops saw extraordinary increases.
The Public Sector Development Programme will be increased from Rs630 billion to Rs900 billion to counter the adverse impact of the coronavirus pandemic, Tarin said, adding the government is earmarking Rs1.1 billion to procure coronavirus vaccines.
Tarin told the House that Pakistan has introduced mortgage financing for the first time ever, saying the passing of the foreclosure law had enabled banks to start lending to people.
The government has porposed two percent reduction in withholding tax on mobile phones from 12 per cent to 10 per cent.
According to the minister, the government has slashed sales tax on locally manufactured cars from 17 per cent to 12.5 per cent besides exempting Federal Excise Duty (FED) on 850cc cars. The government will also slash duty on electric cars.
The finance minister said no new tax is being imposed on the salaried class in the budget, adding to support small businesses, the annual turnover tax ceiling has been increased from Rs10 million to Rs100 million, while sales tax is being reduced.
The government has allocated Rs20 billion for the Pakistan International Airline (PIA) and Rs16 billion for Pakistan Steel Mills.
Regarding agriculture, he said during the next fiscal year, Rs1 billion would be spent on the Locust Emergency and Food Security project, Rs2 billion for enhancing productivity of rice, wheat, cotton, sugarcane and pulses, Rs1 billion for enhancing olive cultivation on commercial scale, and Rs3 billion for improvement of water-courses.
Tarin said the government was evolving a comprehensive strategy, under which the farmers would be provided seeds, fertilizers, loans, tractors and machinery, besides setting up cold storages and commodity warehousing to help increase their income.
As soon the finace minister concluded the budget speech, the National Assembly session was adjourned to meet again on Monday, June 14, at 4pm.