Pakistan Today

Govt to unveil Rs 3.8tr consolidated budget

The government is likely to unveil a consolidated budget of Rs 3.8 trillion, envisaging a total revenue of Rs 2.7 trillion, fiscal deficit of Rs 837 billion, provincial transfers of Rs 1.275 trillion, and development spending of Rs 730 billion on projects along with continuation of austerity measures during the next fiscal year.
The size of the federal budget would be Rs 2.5 trillion and provincial budgets of Rs 1.3 trillion. The GDP growth target for the next fiscal is set at 4.2 percent as compared to the current fiscal year’s estimated GDP growth of 2.4 percent, fiscal deficit is projected at 4 percent of the GDP as compared to the current year’s estimated of 5.9 percent while major efforts would be made to increase the tax to GDP ratio close to 10 percent as compared to the present ratio of below 9 percent.
The major worry for the government would be inflation that is estimated on the average to remain at 12 percent during the next fiscal as against the estimate of 15 percent for the current fiscal.
The government is likely to reduce regulatory duties on the import of food items and concession duties for promoting investment in the auto sector and alternate fuel cars. The government has finalised a proposal on salary increase that proposes merging all existing allowances in the basic salary. An increase of 10 percent would be given to employees. The raise is necessary as after doubling the pay of the employees of the armed forces, police, the Federal Board of Revenue (FBR) and the Supreme Court during the current fiscal year a disparity was created in the salary of same grade government employees. The final decision would be made by the federal cabinet today.
The total development spending allocation for the next fiscal is Rs 730 billion. The federal Public Sector Development Programme (PSDP) has been allocated Rs 300 billion while the provincial government would be spending another Rs 430 billion on development projects. Under the PSDP an allocation of Rs 155 billion is made for the infrastructure, Rs 122 billion for social sectors and Rs 23 billion for other important projects.
The government has set a total revenue collection target of Rs 2.7 trillion as compared to the current fiscal year’s revised target of Rs 1.71 trillion. This includes Rs 1.952 trillion tax target of the FBR against the revised target of Rs 1.588 trillion for the current fiscal. The non-tax revenue is estimated to increase by 30 percent to Rs 687 billion during the next fiscal as compared to the revised estimate at Rs 526 billion. No new taxes would be imposed for meeting the next fiscal year’s revenue target. Additional powers would be given to the FBR to hound the rich tax evaders and bring all exempted sectors under the 17 percent GST regime.  Steps would be taken to automate and streamline the Afghan transit trade, curb smuggling, under invoicing and frauds in refunds. Documentation of the economy is aimed through the implementation of RGST but if it still faced resistance then alternate mode would be pursued. In the next fiscal, the provinces would be getting Rs 1.275 trillion from the federal government as compared to this fiscal year’s transfers of around Rs 1.050 trillion.
The allocation for the federal government is Rs 1.513 trillion. The interest payment next fiscal is estimated to increase by Rs 60 billion to Rs 790 billion as compared to Rs 730 billion for debt servicing this fiscal.  The total expenditure of the Centre would be close to Rs 2.549 trillion, up from current year’s revised estimate of Rs 2.314 trillion. The government has allocated Rs 495 billion for defence, 12 percent more than the current fiscal’s allocation of Rs 442 billion.

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