Tuesday , June 25 2019
Latest News
Home / Latest news / PTI presents IMF made budget to bury the poor

PTI presents IMF made budget to bury the poor

Lahore : Pakistan Tehreek-e-Insaf government on Tuesday presented its first budget with total outlay of Rs 7.022 trillion for the fiscal year 2019-20, ,full of taxations in which Rs 512 billions extra taxes recommended but nothing was there for poor masses .

State Minister for Revenues Hammad Azhar presented the budget in the
National Assembly, amid protest by the Opposition parties.

The minister said that total federal revenues have been estimated at
Rs 6.717 trillion which is 19 percent higher than the previous year’s
revenues of Rs 5.661 trillion.

The collection of revenues by Federal Board of Revenue (FBR), he said
are estimated to be recorded at Rs 5.555 trillion which are 12.6
percent of Gross Domestic Product (GDP).

The minister of state said out of total revenue collections, an amount
of Rs 3.255 trillion would be distributed among the provinces under
7th National Finance Commission (NFC) Award which is 32 percent higher
than the current year’s share of Rs 2.465 trillion.

He said Net Federal Revenues for the upcoming fiscal year have been
estimated at Rs 3.46 trillion against the revenues of Rs 3.07 trillion
during current fiscal year which is 13 percent higher.

Similarly, he said the federal budget deficit would be Rs 3.56
trillion whereas the provincial budget surplus is estimated to be at
Rs 423 billion for the year 2019-20.

Minister of State for Revenues Hammad Azhar said the
consolidated fiscal deficit for the coming year is estimated at
Rs.3.137 trillion or 7.1% of the GDP as against 7.2% of the GDP in
financial Year 2018-19.

He said with respect to the worst economic situation, inherited by the
incumbent government around 10 months ago, when total debt and
liabilities had reached toover Rs 31,000 billion, foreign debt and liabilities were around US$97 billion, foreign exchange reserves with State Bank of Pakistan had fallen from $18 billion to less than $10 billion and Current Account Deficit touched the historical mark of $20 billion, it had to take
measures to control the situation.

Presenting the measures taken by the government to stabilize economy, Hammad Azhar said imports duties were increased to cut trade deficit by $4 billion in 10 months.

He said during the period, remittances were increased by $2billion, and electricity circular debt which had reached Rs.38 billion per month, was brought down by Rs.12 billion to Rs.26 billion per month.

Besides, he said the government also managed to mobilize $ 9.2 billion
from China, UAE and Saudi Arabia to support balance of payment
situation.

He said due to government’s measures to support industrial sector,
higher volumes of exports were witnessed as knitwear exports increased
by 16%, readymade garments by 29%, fruits by 11% and vegetables
increased by 18%, and basmati rice by  22%.

Similarly, he said an agreement has been reached with the
International Monetary Fund (IMF) for a $6 billion programme. Once
approved by the IMF board, this programme will have benefits such as
generating additional international assistance of $2 – $3 billion from
the World Bank and Asian Development Bank at relatively lower interest
rates and achieving stabilisation of the economy and build a
sustainable platform for growth.

“A deferred payment facility of $3.2 billion for purchase of oil and
gas products from Saudi Arabia was also acquired to reduce pressures
on foreign reserves besides operationalising  Islamic Development Bank
for deferred payment facility of $1.1 billion”, he said adding with
these measures, it is expected that the current account deficit for
the year will reduce by $7 billion this year.

With respect to targets of different economic indicators set by the
government for the year 2019-20, the minister of state pointed out
that by reducing imports and aiming for higher exports, the government
wants to bring current account deficit from $13 billion estimated this
year to $6.5 billion in 2019-20.

“A challenging target of Rs. 5,555 billion FBR revenue collection will
be combined with aggressive expenditure controls to reduce primary
deficit to 0.6% of GDP.

Hammad Azhar said in order to increase tax-to-GDP ratio from as low as 11% to over 12%, the government had to bring fundamental reforms in the taxation system. He said keeping in view the austerity measures, the running of civil government, which was Rs 460 billion this year, was being
budgeted at Rs.437 billion for the coming year, a decrease of 5% while
the defence budget was being maintained at the last year’s level of Rs
1,150 billion.

He said since the government borrowing from the State Bank was inflationary, therefore, the government would no longer use that
facility with effect from July 1, 2019. He said the medium-term inflation target would be in the range of 5 – 7%.

“The year 2019-20 shall continue to be the period of stabilisation.
This is a difficult transition that we want to achieve within a
minimum amount of time. We will try to minimise the adverse effects of
any difficult decisions on our citizens,” he added.

Hammad Azhar said the combined allocation of national development programme was proposed at Rs 1,863 billion, out of which the share of Federal Public Sector Development Programme (PSDP) was Rs
951 billion.

He said policy priorities were water management, building a
knowledge economy, fixing electricity transmission and distribution,
low-cost hydel power generation, China-Pakistan Economic Corridor,
investing in human and social development and “Public Private
Partnership” in eligible sectors such as highways.

The minister said for building dams, including Diamer Bhasha, Dasu and Mohmand dams, and drainage projects the government was setting aside Rs 70 billion.

For energy projects, he said, Rs 80 billion had been earmarked.

For agriculture sector, he said, the federal government was
investing record Rs 12 billion for multiple projects. The government
had also announced the second phase of “Quetta Development Package”
under which Rs10.4 billion was proposed to be allocated.

Similarly, he said under the Karachi development package,nine projects costing Rs 45.5 billion were being undertaken. Announcing the proposed relief measures for federal government sector employees, he said a 10 percent raise in the salaries of government employees from BPS 1–16 was being proposed,besides a five percent increase for those in BPS 17-20.

Similarly, he also announced 10% raise in the pensions of civil and military officials.

He, however, said there would be no raise of salary for officers in BPS 21-22.

He said the Special Conveyance Allowance for the disabled has been doubled to Rs 2000, while the Special Private Secretaries, Private Secretaries and Assistant Private Secretaries working for the Ministers, Ministers of State, Parliamentary Secretaries, Additional and Joint Secretaries got a big raise of 25 percent.  Hamad also announced to raise the minimum wage to Rs 17,500 per month.

Leave a Reply

Scroll To Top