Budget with Rs7294.9bn outlay and Rs3,437bn deficit unveiled
ISLAMABAD: The Pakistan Tehreek-e-Insaf government presented its second budget with a total outlay of Rs7,294.9 billion on Friday.
Federal Minister for Industries and Production Hammad Azhar unveiled the corona-influenced budget in a special session of the National Assembly.
Minister for Industries and Production Hammad Azhar presented the budgetary proposals, saying it is a tax-free and relief-oriented budget.
The total federal expenditures are estimated at Rs 7,137 billion with a budget deficit of Rs3,437 billion, which is seven percent of the GDP. The primary balance will remain -0.5 percent.
The minister said that gross revenue receipts have been estimated at Rs6,573 billion. The Federal Board of Revenue (FBR) tax collection target has been set at Rs4,963 billion while the non-tax revenue is estimated to be about Rs1,610 billion.
Under the National Finance Commission (NFC) Award, Rs2,874 billion will be transferred to the provinces. The provincial share in federal taxes is estimated at Rs2873.7 billion.
The net revenue receipts have been estimated at Rs3,699.5 billion indicating an increase of 6.7 percent over the budget estimates of the outgoing fiscal year.
The net capital receipts have been estimated at Rs1463.2 billion, which are 75.93 percent higher than the outgoing fiscal year.
The minister said that external receipts for the next year are estimated at Rs2,222.9 billion. The development expenditure outside PSDP has been estimated at Rs70 billion in the budget.
The size of Public Sector Development Program (PSDP) for 2020-21 is Rs1,324 billion. Out of this, Rs676 billion have been allocated to provinces.
The federal PSDP has been estimated at Rs650 billion, out of which Rs418.7 billion for federal ministries and divisions, Rs100.4 billion for corporations, Rs3 billion for Earthquake Reconstruction and Rehabilitation Authority (ERRA) and Rs7 billion for Covid-19 response and other natural calamities program.
Giving salient features of the new budget strategy, the minister said that no new tax has been levied in the new budget in order to provide relief to the people. He said that proposed tax incentives will help spur the economic activities in the country.
Hammad Azhar said the new budget aims at striking a balance between corona expenditures and fiscal deficit. It also aims to achieve primary balance.
The minister said that the budget seeks to continue social expenditures for the assistance of vulnerable and weaker segments of society under Ehsaas program, besides continuing assistance of people during the next financial year to cope with coronavirus.
Hammad Azhar said that budget document also attempts to keep development budget on appropriate level so that objectives of economic growth are achieved as well as jobs are created.
He said that significant attention has been given on defence and external security of the country. The budget aims to achieve improvement in revenues without unnecessary changes in taxes.
Giving the targets set for next fiscal year, Minister for Industries Hammad Azhar said that GDP growth target has been set at 2.1 percent, which remained negative four percent in the outgoing fiscal year.
He said the current account deficit will be confined to 4.4 percent. The inflation will be brought down from 9.1 percent to 6.5 percent.
The foreign direct investment will be enhanced by 25 percent. The minister said 73 percent of the PSDP have been allocated for the ongoing schemes and 27 percent for the next projects.
He said special emphasis has been given to the social sector. For this, allocations have been enhanced to 249 billion rupees from 206 billion rupees. He said the government has formulated a special development programme worth 70 billion rupees to offset the negative impact of Coronavirus pandemic and other calamities and improve the living standard of the people.
Hammad Azhar said the government is focused to improve the power transmission system and reduce the circular debt. He said sufficient resources have been allocated for the provision of electricity to the special economic zones (SEZs) and the projects to be executed with foreign funding. For this purpose, the government has earmarked Rs80 billion. These funds will especially be used to reduce the gap between electricity demand and supply.
The minister pointed out that Pakistan is faced with severe water shortage. He said the government this year will give special emphasis to the water related projects and in this connection Rs69 billion have allocated.
Ample resources have been allocated for big projects such as Diamer Bhasha Dam, Mohmand and Dasu dams.
The minister said these projects will not only help increase water storage capacity and power generation but will also provide thirty thousand additional job opportunities.
Hammad said the projects under National Highway Authority have also been given priority to promote businesses and industrial development in the country.
In particular, sufficient resources have been earmarked for the CPEC-related projects including its western route. For this purpose, Rs118 billion have been allocated.
Similarly, Rs24 billion have been earmarked for ML-1 and other projects of Pakistan Railways and additional funds of Rs 37 billion for other projects of communication sector.
Referring to the challenge posed by COVID-19 for the health sector, Hammad said that Rs20 billion have been allocated to improve the capacity of health institutions and production of health equipment with the aim to provide better health services and check diseases in the country.
He expressed the confidence that the provincial governments will also play their part in the fight against COVID-19.
Turning to the education sector, Hammad Azhar said Rs5 billion have been allocated for reforms in this sector. He said that steps will be taken to introduce a uniform curricula and quality examination system as well as establish smart schools and bring the seminaries into the national mainstream.
He said that higher education is one of the top priorities of the government. He said Rs30 billion have been allocated to bring innovation in higher education sector with the aim to improve research and development in subjects such as artificial intelligence, automation and space technology.
He said the government has increased budgetary allocations for Higher Education Commission from existing Rs59 billion to Rs64 billion.
The minister said assistance to poor and vulnerable segments of society is top priority of the government and for this purpose an integrated system has been devised under which all relevant institutions have been merged into newly constituted Poverty Alleviation and Social Security Division.
He said budget for Ehsaas Programme has been increased to Rs208 billion from the existing Rs187 billion. The amount will be spent on vulnerable segments of society in a transparent way.
A sum of Rs179 billion has been allocated to provide different subsidies in energy, food, and other sectors.
The minister said the government has provided Naya Pakistan Housing Authority a sum of Rs30 billion to provide low-cost housing to the people.
In addition, through Qarze-e-Hasana Scheme Rs1.5 billion will be dispersed through Akhuwat Foundation for low-cost housing.
Hammad Azhar said Rs55 billion have been allocated for Azad Kashmir and Rs32 billion for Gilgit-Baltistan under grants.
A sum of Rs56 billion has been allocated for merged districts of Khyber Pakhtunkhwa.
Moreover, Sindh has been provided a special grant of Rs9 billion and Balochistan Rs10 billion, which are in addition to their shares in NFC.
The minister said that under the steps to improve remittances, a sum of Rs25 billion has been set aside for receipts through banks.
He said in order to provide affordable transportation services to the people of Pakistan, a sum of Rs40 billion has been specified for Pakistan Railways.
Regarding empowering youth, the minister said Rs2 billion have been allocated for Kamyab Jawan Programme for capacity building of the youth. He said a sum of Rs13 billion has been reserved for federally administered hospitals in Lahore and Karachi. He said over Rs1 billion have been earmarked for e-governance to improve public service delivery.
The minister said on the suggestion of President Dr Arif Alvi, sum for Artists Welfare Fund has been increased from existing Rs250 million to Rs1 billion. – TLTP