–Govt expects deficit of Rs3 trillion as opposed to previous Rs1.8tr
–Budget envisages fiscal management, revenue mobilisation besides providing relief to masses, job creation and pro-people socio-economic policies
ISLAMABAD: Mired in financial crises amid high inflation rate, the Pakistan Tehreek-e-Insaf (PTI) government led by Prime Minister Imran Khan is all set to roll out its first finance bill on June 11, Tuesday.
The budget brings with itself an expected deficit of Rs3 trillion as opposed to the Rs1.8 trillion in the previous budgets. It will be approved by the federal cabinet on Tuesday in a meeting hours ahead of its formal presentation in the National Assembly (NA).
In order to meet the challenges the premier chaired multiple meetings of his party leaders and kitchen cabinet members at Bani Gala on Sunday, sources said.
As per the earlier announcement, the federal budget will be presented on June 11 (Tuesday) at the Parliament House. The meeting is expected to give approval for Rs6.8tr federal budget with the deficit estimated for the next financial year at historic high contrary to the previous government which had intended to restrict the overall fiscal deficit to Rs1,890.2 billion or 4.9 per cent of the GDP in the last budget.
According to documents, the next budget envisages fiscal management, revenue mobilisation, measures for economic stabilisation and growth, reduction in non-development expenditures; boosting exports besides providing relief to the masses, promoting investment for job creation and people friendly policies for the socio-economic prosperity of the country.
The main focus of the budget would be on fiscal consolidation, revenue mobilisation while the government is likely to enhance allocations for the social safety net for providing maximum relief to vulnerable segments of the society, sources said.
Sources claim that the finance ministry is going to propose Rs1.2 trillion for the defence sector, unlike the original budgetary allocation for the outgoing fiscal year (2018-19) which was Rs1.1 trillion. However, since the military has ‘voluntarily agreed’ to cut its expenditures due to ‘critical financial situation’ the real picture of the defence budget will be clear once all budget is formally announced.
The budget figures of defence sector usually do not give the complete picture as it is not included Rs260 billion pension fund of retired soldiers, Rs45 billion of security enhancement and undeclared allocations for major weapon procurements and strategic programme.
The government has proposed to allocate more than Rs2,500 billion for debt servicing while a total of Rs925 billion would be allocated for the development programme of the federal government. On the revenue side, the government would introduce measures for bringing improvements in the system of tax collection, broadening the tax base, and facilitation to taxpayers, they said and argued that a strong revenue generation will play a crucial role in achieving the targets for economic growth. The government is likely to set the revenue collection target at Rs5.55 trillion for the fiscal year 2019-20.
As per the budget documents, the government is going to propose Rs1,250 billion non-tax revenue during the next fiscal year. In a move to meet the revenue target the government is likely to increase the sales tax on sugar from 8 to 17 per cent. Besides the increase in taxes and duties on poultry products, electronic and dozens of other items is also being proposed in the next budget.
The duty on import of luxury items is also being increased from 2 to 3 per cent. The incumbent government is also going to introduce a tax on the income of middlemen in the business.
Though the government is still in fix over abolishing the zero-rated tax regime in the export sector after the protest of textile sector, the federal cabinet will also be deciding about the future of tax exemptions for exports oriented sector.
In a move to provide relief to the public, the government is going to introduce a programme of easy loan for the unemployed youth. The federal cabinet may also approve the nominal increase in salaries and pension of the employees by 10 to 15 per cent against skyrocketing inflation.
For the agriculture sector, the incumbent government is going to introduce an Rs5 billion agricultural technology fund besides decreasing prices of fertilizers.