- Govt gets ambitious with Rs 3.9 trillion ‘anti poor’ budget with Rs 3.1 trillion allocated for current expenditures and revenue collection estimated at Rs 3.943 trillion
- Budget allows Rs 215 billion for pension, Rs 700 billion for defence affairs and services, Rs 371 billion for grants and transfers, Rs 203 billion for subsidies, Rs 291 billion for running of civil government and Rs 25 billion for provision for pay and pension
- Under NFC Award, Punjab will get Rs 812.786 billion, Sindh Rs 464.007 billion, Khyber Pakhtunkhwa Rs 283.675 billion and Balochistan Rs 159.714 billion
- For broadening tax net, customs slabs reduced from eight to six, maximum customs duty reduced from 30 to 25 per cent
The Pakistan Muslim League-Nawaz (PML-N) government on Tuesday unveiled a Rs 3.945 trillion ambitious budget for the fiscal year 2014-15, introducing more taxes to the poor taxpayers and providing relief to the super-rich.
Before the introduction of budget in the National Assembly by Finance Minister Ishaq Dar, the federal cabinet formally approved it.
Experts have, however, slammed the budget, terming it “anti-poor” as new taxes have been introduced while the taxes on corporate sector have been reduced significantly.
During the budget speech, the minister stated that Rs 3.130 trillion have been allocated for current expenditures, which consists of Rs 1.325 trillion as interest payment, Rs 215 billion for pension, Rs 700 billion for defence affairs and services, Rs 371 billion for grants and transfers, Rs 203 billion for subsidies, Rs 291 billion for running of civil government and Rs 25 billion for provision for pay and pension.
“The government has allocated Rs 806 billion for development, which consists of Rs 525 billion as Public Sector Development Program (PSDP), Rs 120 billion as Net Lending, and Rs 162 billion as Other Development Expenditures,” he added.
The minister said that Rs 205 billion have been earmarked for investment in various power projects to overcome the energy crisis on priority basis. Privatisation of the state-owned organisations will be undertaken and the proceeds will be spent for the development of the people, he maintained.
The finance minister said that the PSDP has been kept at Rs 525 billion – hinting that the development budget had not been increased in defence and energy sector from its initial proposals despite repeated requests from the Babus concerned.
Dar, while making his second budget speech in succession, however, gave good news to the government employees that a 10 percent ad-hoc relief had been proposed for the salaries of federal government employees and the minimum monthly wage had been increased to Rs 11,000 from Rs 10,000. The minimum pension is being raised from Rs 5,000 to Rs 6,000, he added.
The minister said that the allocation for defence has been proposed at Rs 700 billion for 2014-15 while under the Benazir Income Support Programme (BISP) the poorest of the poor will now be provided Rs 1,500 per month. He also stated that 5.3 million families will be supported instead of 4.1 million.
TAXES:
The minister said that under the government’s vision of broadening the tax net, the numbers of customs slabs are being reduced from eight to six. The maximum customs duty is being reduced from 30 to 25 percent, he added. The total volume of revenue collection is estimated at Rs 3.943 trillion for FY 2014-15 while the FBR tax revenue collection is estimated at Rs2.810 trillion.
FISCAL DEFICIT:
Moreover, Fiscal Deficit will be kept to 4.9 percent in 2014-15 while total foreign loans Pakistan expects to receive are Rs 869 billion. Provincial share in federal revenue receipts is estimated at Rs 1.720 trillion while external receipts in 2014-15 are estimated at Rs 869 billion.
DAMS:
For Diamer Bhasha Dam, Rs 10 billion had been allocated for the acquisition of land while Rs 15 billion are being earmarked for the next fiscal year. Funds for other dams in different provinces are also being allocated.
Dar claimed that efforts will be made to reduce the fiscal deficit from 5.8 percent of GDP to 4.9 percent of GDP during 2014-15. This claims looks farfetched as the government had also failed in such claims last fiscal.
During the next fiscal year, the government has projected external resources as Rs 868.610 billion, against the previous year’s Rs 714.112 billion, showing an increase of 21.6 percent over last year, the minister maintained.
NFC:
The minister said that under the National Finance Commission (NFC) Award, Punjab will get Rs 812.786 billion; Sindh Rs 464.007 billion, Khyber Pakhtunkhwa Rs 283.675 billion and Balochistan Rs 159.714 billion.
SUBSIDIES:
The allocation under subsidies has decreased to Rs 203.248 billion for 2014-15 against the previous year allocation of Rs 240.434 billion.
RAILWAYS:
The minister said that Rs 77 billion are being allocated for 45 different schemes for Railways besides salaries and pension of its employees.
HEC:
For higher education Rs 63 billion have been allocated, 10 percent higher than the previous year. Through the auction of 3G and 4G technologies, as many as 900,000 people will get employment opportunities. The foreign exchange reserves of the country will soon be raised to 22 billion dollars.
EXPENDITURE:
Expenditures have been kept at Rs 3.937 trillion while the current expenditures are estimated at Rs 3.130 trillion.
The overall expenditure during 2014-15 are estimated at Rs 4.302 trillion, out of which the current expenditure is Rs 3.463 trillion and development expenditure is Rs 839 billion.
The share of current expenditure in total budgetary outlay for 2014-15 is 80.5 percent as compared to 78.8 percent in revise estimates for 2013-14.
To meet expenditure, bank borrowing has been estimated for 2014-15 at Rs 228 billion, which is lower than the budget and revised estimates of 2013-14.
Dar also said Pakistan would invest at least Rs 205 billion ($2.08 billion) in power projects in the next fiscal year as part of a plan to reform the struggling sector.
Spelling out the revenue generation plans of the government, the minister said the share of provincial governments in the taxes would be Rs 1.72 trillion against Rs 1.41 trillion last year. Net resources left with the federal government would be Rs 2.22 trillion against the revised estimate of Rs 2.18 trillion for last year.
The finance minister said the expenditure for the next fiscal year had been budgeted at Rs 3.937 trillion, 2 percent higher than the previous year’s, which was much lower than the inflation rate.
The minister said the budget deficit had been reduced to 4.9 percent and estimated at Rs 1.71 trillion for the next fiscal year. By requiring surplus of Rs 183 billion last year, the government had projected an overall fiscal deficit of Rs 1.422 trillion for the next year, he added.
Dar also announced measures to simplify the existing tax regimes and remove inequities created by SROs-based concessions, which would be carried through a phased plan.
The finance minister said that to ensure continued stability in the stock market, it was proposed that from July 1, 2014, the Capital Gains Tax (CGT) rate would be 12.5 per cent for securities held up to 12 months and 10 per cent for those held for 12 to 24 months.