A strong foundation for achieving overall inclusive growth has been laid in the budget for 2016-17 through strong incentives for all sectors of the economy including agriculture and industry, said Finance Minister Ishaq Dar.
Dar, while reiterating the government’s resolve for an uplift of the agriculture sector, said the government announced a special agricultural package last year and, keeping up with the spirit of helping out the farmers, has also announced a number of measures in the 2016-17 budget.
He said there has been a significant reduction in prices of fertilisers. Prices of fertiliser were brought down by Rs250 a bag during the last few months and have now been further reduced by Rs400 a bag. Prices of DAP have also been reduced by Rs300 a bag with effect from July 2016, he said.
Dar added that seven per cent duty on pesticides has been withdrawn while an off-peak rate of electricity for agricultural tube wells has been lowered from 8.85 rupees a unit to 5.35 rupee a unit.
Additionally, the agricultural delivery chain, which includes warehousing facilities for storage of produce, would get a three-year tax holiday.
The companies that set up `halal’ meat production plants and obtain `halal’ certification by December 31, 2016, will be exempted from income tax for four years. In order to promote farm mechanisation and raise productivity, it has been decided that non-adjustable sales tax at a reduced rate of seven per cent, instead of the existing 17per cent, may be charged on the local supply and import of certain agricultural equipment used for tillage and seed-bed preparation, seeding or planting, irrigation, drainage and agro-chemical application.
Customs duty, sales tax and withholding tax on import of agricultural machinery will be reduced to nine per cent from the current aggregate of 28per cent to 43per cent. Farmers with landholdings up to 12.5 acres will receive interest-free loans for setting up solar tube wells. Dar said that the government will actively pursue the objective of economic growth and development under the leadership of Prime Minister Nawaz Sharif with renewed vigour.
He added that functionalisation of Pakistan Development Fund and Exim Bank of Pakistan would be among his priorities in the first quarter of 2016-17. He hoped these two institutions would help spur infrastructure development and promote exports.
Dar also hinted at the next phase of reforms aimed at improvement in the financial sector.
