Home Top News PTI govt unveils Rs7.02tr budget Opposition’s protest mars budget session; Current account...

PTI govt unveils Rs7.02tr budget Opposition’s protest mars budget session; Current account deficit to be reduced to 6.5pc; Govt’s running expenses slashed to Rs437b from Rs460b; Defence budget to be kept static at Rs1.15tr; NDP total size Rs1,800b; Federal revenues to be Rs6,717b; GST to remain at 17pc

Staff Reporter

Islamabad

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, registering growth of 30 percent against the revised budget of Rs 5.385 trillion for current fiscal year (2018-19).
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, he said are estimated to be recorded at Rs 5.555 trillion which are 12.6 percent of Gross Domestic Product.
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 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.
The Pakistan People’s Party and lawmakers from other opposition parties held protest during the budget speech of Minister of State for Revenues Hammad Azhar in the National Assembly.
The PPP lawmakers were wearing black armbands and holding placards to record their protest. The opposition lawmakers gathered in front of the National Assembly speaker’s dice and chanted slogans. They also tore down the copies of budget document.
Prime Minister Imran Khan was present in the house during the first budget of his government. Minister of State for Revenue Hammad Azhar in his budget speech announced 10 per cent ad hoc relief on the running basic pay scales of government employees serving in grade 1 to grade 16.
Hammad Azhar further informed that 5 per cent ad hoc relief would be provided to government employees in grade 17 to 20 whereas there would be no raise for the government servants in grade 21 to 22 as they had voluntary decided against it.
The ad hoc relief would be based upon basic pay scales of 2017. The pensioners would also get an ad hoc relief of ten per cent.
Earlier, Prime minister Imran Khan chaired a meeting of the cabinet before the presentation of the budget. The meeting discussed and approved the budgetary proposals for the next fiscal year. Adviser on Finance Hafeez Sheikh briefed the cabinet about the budgetary proposals.
The Minister of State for Revenue told, “There has been no increase in exports in the last five years. The circular debt has peaked to Rs1200 billion – it is increasing by Rs38 billion per month.”
Azhar said the country witnesses a $20 billion current account deficit while the trade deficit touched $32 billion in the outgoing fiscal year. “The economy has deteriorated due to expensive imports and subsidised exports.”
The minister explained that heavy borrowing was done to keep rupee at a higher rate which could not be sustained for long. Consequently, the rupee depreciated in December 2018 and the economic growth slowed resultingly.
Azhar then went on to outline measures taken by the Imran Khan-led government to sustain the economy. “We reduced trade deficit while remittance saw an increase of $2 billion. The current account deficit dropped by $4 billion.”
“We borrowed a total of $9.2 billion from China, Kingdom of Saudi Arabia, and the United Arab Emirates.” Azhar said the government empowered State Bank of Pakistan. “We created the Single Account Treasury, launched the Billion Tree Tsunami project. We made Federally Administered Tribal Areas part of Khyber Pakhtunkhwa.”
“Keeping in view that the Tax-to-Gross Domestic Product ratio is significantly lower in the region, our focus is on increasing tax collection. Only two million people, including the salaried class, paid taxes. Currently, there are at least 3.1 billion commercial customers registered out which only 1.4 million customers are tax-return filers. Similarly, there are 50 million bank accounts in the country but only 10 per cent of them are tax payers.”
The Asset Declaration Ordinance 2019 will allow undeclared assets to be entered into the economy. The computerized tax paying system will smoothen the process as it will also lessen the cost of tax compliance.
“The government is maintaining a centralised treasury account at the SBP to deposit government funds.” He added that the federal and provincial government will not be allowed to park their deposits at any commercial bank. The move is to curtail money laundering.
The government will not be borrowing from the central bank to tackle budget deficit as it fuels inflation. Azhar underscored that the government’s aim was to shift the burden from the common man.