National Assembly
State Minister for Revenues Hammad Azhar presented the budget in the National Assembly
  • The collection of revenues by Federal Board of Revenue (FBR), he said are estimated to be recorded at Rs 5.555 trillion.
  • Minister of State for Revenues Hammad Azhar said the consolidated fiscal deficit for the coming year is estimated at Rs.3.137 trillion.
  • He said the government also managed to mobilize $ 9.2 billion from China.

ISLAMABAD: Pakistan Tehreek-e-Insaf government on Tuesday presented its first budget with total outlay of Rs 7.022 trillion for the fiscal year 2019-20, registering growth of 30 percent against the revised budget of Rs 5.385 trillion for current fiscal year (2018-19).

State Minister for Revenues Hammad Azhar presented the budget in the National Assembly, amid protest by the Opposition parties.

Read More: NAB Arrests Hamza Shahbaz After Bail Plea Rejected

The minister said that total federal revenues have been estimated at Rs 6.717 trillion which is 19 percent higher than the previous year’s revenues of Rs 5.661 trillion.

The collection of revenues by Federal Board of Revenue (FBR), he said are estimated to be recorded at Rs 5.555 trillion which are 12.6 percent of Gross Domestic Product (GDP).

Minister of State
The minister of state said out of total revenue collections, an amount of Rs 3.255 trillion would be distributed among the provinces

7th National Finance Commission (NFC) Award, which is 32 percent higher than the current year’s share of Rs 2.465 trillion.

He said Net Federal Revenues for the upcoming fiscal year have been estimated at Rs 3.46 trillion against the revenues of Rs 3.07 trillion during current fiscal year, which is 13 percent higher.

Similarly, he said the federal budget deficit would be Rs 3.56 trillion, whereas the provincial budget surplus is estimated to be at Rs 423 billion for the year 2019-20.

Minister of State for Revenues Hammad Azhar said the consolidated fiscal deficit for the coming year is estimated at Rs.3.137 trillion or 7.1% of the GDP as against 7.2% of the GDP in financial Year 2018-19.

He said with respect to the worst economic situation, inherited by the incumbent government around 10 months ago, when total debt and liabilities had reached to.

State Bank of Pakistan
State Bank of Pakistan had fallen from $18 billion to less than $10 billion

over Rs 31,000 billion, foreign debt and liabilities were around US$97 billion, foreign exchange reserves with State Bank of Pakistan had fallen from $18 billion to less than $10 billion and Current Account Deficit touched the historical mark of $20 billion, it had to take measures to control the situation.

Presenting the measures taken by the government to stabilize economy, Hammad Azhar said imports duties were increased to cut trade deficit by $4 billion in 10 months.

He said during the period, remittances were increased by $2 billion, and electricity circular debt which had reached Rs.38 billion per month, was brought down by Rs.12 billion to Rs.26 billion per month.

Besides, he said the government also managed to mobilize $ 9.2 billion from China, UAE and Saudi Arabia to support balance of payment situation.

He said due to government’s measures to support industrial sector, higher volumes of exports were witnessed as knitwear exports increased by 16%, readymade garments by 29%, fruits by 11% and vegetables increased by 18%, and basmati rice by 22%.

Similarly, he said an agreement has been reached with the International Monetary Fund (IMF) for a $6 billion programme. Once approved by the IMF board, this programme will have benefits such as generating additional international assistance of $2 – $3 billion from the World Bank and Asian Development Bank at relatively lower interest rates and achieving stabilisation of the economy and build a sustainable platform for growth.

“A deferred payment facility of $3.2 billion for purchase of oil and gas products from Saudi Arabia was also acquired to reduce pressures on foreign reserves besides operationalising Islamic Development Bank for deferred payment facility of $1.1 billion”, he said adding with these measures, it is expected that the current account deficit for the year will reduce by $7 billion this year.

With respect to targets of different economic indicators set by the government for the year 2019-20, the minister of state pointed out that by reducing imports and aiming for higher exports, the government wants to bring current account deficit from $13 billion estimated this year to $6.5 billion in 2019-20.

“A challenging target of Rs. 5,555 billion FBR revenue collection will be combined with aggressive expenditure controls to reduce primary deficit to 0.6% of GDP. Both the civil and military governments have announced unprecedented reduction in expenditures”, he said.

Key Features of the Budget 2019-20

  • Ministers have agreed for 10 per cent cut in salaries
  • Rs 40 billion subsidy will be provided on gas and electricity
  • Salaries of civilian employees from grade 1-16 have been increased by 10 per cent
  • GST to remain unchanged at 17 per cent
  • 5.2 per cent federal excise duty on 1000 CC locally developed vehicles
  • 5 per cent federal excise duty on the 1001 to 2000 CC locally developed vehicles
  • Sales tax on sugar increased from 8 per cent to 17 per cent
  • Rs 100 billion for soft loans under Kamyab Jawan Program
  • Rs 1,000 mln for Kartarpur development
  • Rs Rs 1,266 million allocated for 16 projects for Aviation Division
  • 5 per cent ad hoc relief for government employees from grade 17 to 20
  • 10 per cent ad hoc relief for armed forces employees
  • Tax net will be increased as only 20,00,000 people in Pakistan file tax returns of them 600,000 are employees.
  • Higher Education Commission has been allocated an amount of over Rs 28,646 million for the ongoing and new schemes.
  • Pakistan’s Defence budget will remain Rs1150 billion

Withdrawal of 3% Value Addition Tax on Petroleum Products and Mobile Phones

  • No increase in civil servants of grade 21 and 22
  • Rs3955 billion will be given to the provinces
  • Pensions for retired employees increased by 10 per cent
  • Minimum wage set at Rs17,500
  • Rs 210 billion 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.
  • Rs 45.5 billion has been allocated for Karachi’s development programmes
  • The PSDP allocation for Climate Change Sector has been kept at Rs1102 million .
  • Rs 63.5 billion for special areas including merged districts of Khyber Pakhtunkhwa, Azad Jammu and Kashmir and Gilgit-Baltistan.
  • A special allocation for Rs 75 billion will be provided for equitable Regional Development in order to accelerate development of less developed areas and Rs 22 billion are set aside for 10 year development plan of merged districts.
  • The National Agriculture Emergency Program intends to spend Rs 290 billion in the next five years to boost the sector.
  • 80,000 deserving people will be provided interest-free loans every month
  • Rs271 billion has been allocated for subsidy
  • Trade deficit was reduced by $4 billion.
  • Trade deficit stands at $22 billion.
  • The government has taken measures to boost exports.
  • Rs2891 billion has been allocated to pay the interests
  • Rs70 billion has been allocated for water reservoirs
  • BISP stipend has been increased from Rs5,000 to Rs5,500
  • Rs 1,800 billion kept for development programmes including Rs 950 billion kept for federal development programme.
  • PTI government will not receive any loan from State Bank of Pakistan to bridge budget deficit
  • Government expenses will be cut from Rs460 billion to Rs 437 billion
  • Pakistan facing $ 97 billion debt
  • Trade deficit reached $32 billion
  • Circular debt reached 1200

LEAVE A REPLY

Please enter your comment!
Please enter your name here