ISLAMABAD: The Pakistan Tehreek-e-Insaf (PTI) government on Friday presented its second budget with total outlay of Rs7.14 trillion for the fiscal year 2020-21.
Minister for Industries Hammad Azhar announced the budget. He said the PTI government inherited financial crisis from the previous government.
“I would like to inform the respected House that the previous government had left the current account deficit to its peak, the value of Pakistani currency was pumped through fake reserves, budget deficit had climbed to its historical summit, and innumerable loans were taken from the state and international banks,” he said.
He said the current government paid 5000 billion rupees interest on the loans taken by the previous governments. The PTI government created 10,000 jobs abroad, he maintained.
The government began structural reforms in different sectors, he said, which ensured fair and transparent governance.
Pakistan was put in the grey list in June 2018 and the incumbent government took rigorous measures to improve its economic condition, Hammad Azhar said.
He said amid coronavirus situation the government was ensuring provision of basic necessities to poor. All industries and businesses had been affected due to it, he added.
“The PTI government allocated 150 billion rupees for the deserving people. The PM gave special package for affected people. Direct increased by Rs2.15 billion in the country. Rs 280 billion given to farmers. Rs70 billion relief package given to masses by cutting petroleum product prices,” he said.
The minister said that no new tax had been introduced. Subsidy system will be improved to provide subsidy to the deserving segment of the society, he said.
Different measures taken to improve remittances.
Current account deficit will be maintained at 4.4 percent.
Foreign Direct Investment to be increased by 25 percent. Inflation will be brought down to 6.5% from 9.1%.
The government is paying special attention to water projects and reserved Rs70 billion for this purpose.
The minister pointed out that Pakistan is faced with severe water shortage. He said the government this year will give special emphasis to the water related projects and in this connection 69 billion rupees have allocated.
Ample resources have been allocated for big projects such as Diamer Bhasha dam, Mohmand and Dasu dams.
The Minister said these projects will not only help increase water storage capacity and power generation but will also provide thirty thousand additional job opportunities.
Balochistan will be given a special grant of 10 billion rupees.
55 billion rupees have been allocated for Azad Kashmir.
650 crore to be given to public sector development.
Education sector will be improved by mainstreaming madressahs and introducing uniform syllabus in schools.
Higher education is a focus of the government. HEC’s funds worth Rs60 billion have now been increased to Rs64 billion. Rs 5 billion allocated for educational reforms.
Tax defaulters would have to pay taxes on school fees while the tax payers would be exempted from it.
20 billion rupees allocated for the health sector. 13 billion rupees to be spent on government hospitals of Lahore and Karachi including Jinnah hospital Karachi and Sheikh Zayed Hospital Lahore.
70 billion rupees kept for dealing with Corona and other natural calamities.
Exemption of duty extended by three more months on supply of medical equipments.
Viewing climate change, Pakistan is gearing up to cope with this situation. Rs6 billion allocated to cope with climate change.
Rs24 billion set for sustainable development goals.
The Minister said the gross revenue receipts have been estimated at 6573 billion rupees.
The FBR tax collection target has been set at 4963 billion rupees while the non-tax revenue is estimated to be about 1610 billion rupees.
Under the NFC Award, 2874 billion rupees will be transferred to the provinces. The provincial share in federal taxes is estimated at 2873.7 billion rupees.
The net revenue receipts have been estimated at 3699.5 billion rupees indicating an increase of 6.7 percent over the budget estimates of the outgoing fiscal year.
The net capital receipts have been estimated at 1463.2 billion rupees, which are 75.93 percent higher than the outgoing fiscal year.
The Minister said the external receipts for the next year are estimated at 2222.9 billion rupees. The development expenditure outside PSDP has been estimated at 70 billion rupees in the budget.
The total federal expenditures are estimated at 7,137 billion rupees with a budget deficit of 3437 billion rupees, which is seven percent of the GDP. The primary balance will remain -0.5 percent.
Giving salient features of the new budget strategy, the Minister said no new tax has been levied in the new budget in order to provide relief to the people.
He said the proposed tax incentives will help spur the economic activities in the country.
Hammad Azhar said the new budget aims at striking a balance between corona expenditures and fiscal deficit. It also aims to achieve primary balance.
The size of Public Sector Development Program for 2020-21 is 1324 billion rupees. Out of this, 676 billion rupees have been allocated to provinces.
Federal PSDP has been estimated at 650 billion rupees, out of which 418.7 billion rupees for federal ministries and divisions, 100.4 billion rupees for corporations, 3 billion rupees for Earthquake Reconstruction and Rehabilitation Authority and seven billion rupees for COVID response and other natural calamities program.
The government has increased artists welfare fund from Rs25 crore to one billion rupees on request of the president.
“We are grateful to the Pakistan army for supporting the austerity campaign of the government and not increasing its budget,” the minister said. 1,289 billion rupees to be spent on Defence sector, which is the same amount which was announced last year.
He said significant attention has been given on defence and external security of the country.
For the development of Railway’s ML-I project 24 billion rupees are to be spent.
Rs100 billion set for bills of electricity and gas.
27 percent increase in the collection of domestic taxes targeted.
48 billion rupees allocated for development of KPK.
20 billion rupees allocated for Science and Technology projects.
We are presenting such as budget which can be termed as relief budget.
Customs Act 2019 changes: rebates scheme to be made automated.
Rs800 subsidy given for individual and business loans.
Funds allocated for Naya Pakistan Housing Scheme.
Rs10 billion set for eradication of locusts. Rs12 billion specified for food and agricultural sector.
Hotel and hospitality industry has taken a huge hit due to COVID-19 lockdowns. Therefore, reduction of 0.5% tax on hotel industry has been proposed.
Rs50 billion set for uplifting of small medium enterprises.
100 percent tax to be imposed on all tobacco related products.
Total expenditure of the federation estimated to be Rs3700 billion.
Duty on luxury items including vehicles increased.
Duty on medical supplies to be maintained at 3 percent for another three months.
Rs2 billion allocated for Afghan reconciliation process.
Sales tax on the mobile phones being produced in Pakistan will be reduced.
A new system of central tax refund is being introduced.
Federal Excise Duty on Energy Drinks to be increased from 13% to 25%.
Volume of development projects will be kept at more than Rs 1320 billion.
The government announced no mention about increase in salaries and pensions of the government employees.
The session of National Assembly began with recitation of Tilawat e Quran followed by national anthem on Friday. The Pakistan Tehreek-e-Insaf (PTI) government presented federal budget 2020-21.
Advisor to Prime Minister on Finance Abdul Hafeez Sheikh has termed it the corona-budget as it is being announced at the time when the government is tackling with the ongoing novel COVID-19 pandemic, which has shaken the economy. The budget proposal was finalized after discussion with the International Monetary Fund (IMF). The government had agreed to freeze size of its expenditures.
A special meeting of the Federal Cabinet chaired by Prime Minister Imran Khan was held in Islamabad on Friday, prior to the budget announcement. The meeting discussed and approved the budgetary proposals for the next fiscal year. PM Imran signed the budget 2020-21 documents. The meeting could not decide about increment in salaries and pensions. The federal cabinet approved no new taxation in budget 2020-21.