The Coalition Government has presented its second budget, which has aptly been described by Finance Minister Ishaq Dar as ‘responsible’ and not politically motivated budget during a year when general elections are due. Though the Minister, understandably, did not dilate upon the most sensitive aspect of the budgetary proposals i.e. taxation measures, what he did mention conveyed a vivid impression that despite financial constraints and economic challenges, the Government has prepared a balanced and people/business friendly budget.
The budgetary proposals, no doubt, have the potential to spur growth in different areas of the national economy and subject to proper utilization of allocations for development and judicious implementation of the incentives for various sectors the Government might achieve the GDP growth target of 3.5 percent, which otherwise is modest one. As non-stop inflation is the most serious concern of each and every citizen of the country but fixed income groups are worse affected, the most striking feature of the new budget is the relief that the Finance Minister announced for Government servants and pensioners. A salary increase ranging from 30 to 35% and 17.5 % hike in pensions would surely help mitigate sufferings of the civil servants and retired people. Minimum wage within Islamabad Capital Territory (ICT) has been increased from the existing 25000 to 32000 rupees and hopefully this would be replicated by the provinces, Azad Kashmir and GB. The EOIB would increase pension from the existing Rs. 8500 to 10000 but keeping in view the rate of inflation this needs to be enhanced further. The budget contains proposals to provide relief to disadvantaged segments of the society as the Government has pledged to pay back HBFC loan of widows upto one million rupee while investment limits for Shuhada and pension account under National Savings have been increased significantly. A pension fund is being instituted to take care of future liabilities on this account while various initiatives under BISP and PM’s Youth Programme have been expanded and improved upon. Extensive incentives have been proposed in the budget for agriculture, IT, SMEs, and industrial and export sectors, which would go a long way in exploiting the maximum potential of these sectors. IT has been given the status of SME sector enabling it to benefit from concessional rate of taxation while an Export Council of Pakistan is being set up to monitor export-related issues on a regular basis. The budget envisages liberal incentives for Overseas Pakistanis that would encourage them to remit more to their homeland. Laudable initiatives are also proposed for the education sector, especially higher education, women empowerment and construction sector. The budget has the potential to promote economic activities and provide much-needed relief to different segments of the society but much depends on actual implementation and whether or not there would be mini budgets or change of course during the year.
