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Final Budget speech 2013 (entire text)

That Guy

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Mar 29, 2013
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Note, it took me a long time to edit this text so it's at least readable on the forums. If anyone finds any mistakes, please tell me and I'll fix them. Original and full text can be found in PDF form on the bottom of the page. Courtesy of GeoTV - That Guy

Bismillahir-Rehmanir-Rahim

PART-I

Mr. Speaker,

1. As I rise to present the first budget of the newly elected government
I want to thank Allah (SWT) for bestowing this singular honor on me. It is
not a mere occasion of presenting a budget. It is marking a major
transition in the country, where one elected government has completed its
full term and after holding the general elections, transition to a new
democratic government is being peacefully accomplished. The nation
should be proud of the fact that this one step is a leap forward in
establishing a democratic polity in the country.

2. As the Prime Minister, in his address to the nation has said, a new
beginning in Pakistan is about to start. He has given the message of
HOPE and OPTIMISM. He has declared that Pakistanis are second to
none and that our destiny is nothing but progress. He will lead the nation
to a new world, where Pakistan will regain its lost status in the comity of
nations, reassert its due respect and identity in the world and elicit due
reverence and dignity in return.

3. On the economic front he has laid out comprehensive a agenda of
reform to reinvigorate the economy, spur growth, maintain price stability,
provide jobs to the youth and rebuild the key infrastructure of the country.

Mr. Speaker,

4. My enthusiasm, however, is seriously dampened as I discover that
the new government is inheriting a broken economy. From economic
growth to prices, from revenues to expenditure, from public debt to circular
debt, from monetary expansion to interest rates, from exchange rate to
foreign exchange reserves and sustainability of balance of payments, I
wish I could identify one single area where their economic management
was in the best national interest. Indeed, there has been complete
absence of management rather the economy was run on autopilot and its
inherent strengths and weaknesses played out at their own without any
real contribution of policy. Viewed in this perspective, the verdict of the last
elections may be termed as the public accountability of the
mismanagement practiced at an unprecedented level by the outgoing
government.

Mr. Speaker,

5. I will point out four or five key indicators to allow the members to
appreciate how poorly the economy has performed in the last five years:

(1) The growth rate has averaged less than 3% in the last five
years, which is significantly below our potential;

(2) The inflation has averaged around 13%, which is
unprecedented in the last four decades;

(3) The exchange rate was around Rs.62/$ and it now stands at
about Rs.100/$ depreciating by a whopping 60%;

(4) State Bank Reserves were around $11.1 billion and they are
leaving behind $6.3 billion despite having obtained
significant support from IMF;

(5) There was virtually no circular debt of mentionable size;
today, and after paying about Rs1481 billion in tariff
differential subsidies, it is known to all that a gigantic circular
debt of more than Rs.500 billion is crippling the power sector
and fiscal system of the country.

(6) The average deficit in the last five years was recorded at
about 7%, which is unprecedented in country’s recent
history.

(7) The public debt stood at Rs.5,602 billion on 31st March
2008, which is now projected to rise to 14,284 billion by 30th
June, 2013, implying a 2.5 times increase in country’s
indebtedness. Even on the basis of Debt to GDP comparison
the ratio rose from 52.6% of GDP to 63.5% representing an
increase of nearly 10 percentage points in country’s debt
burden. I might add here that the total public debt of
Pakistan which accumulated between 1947 and 30th June
1999 was around Rs.3000 billion.

6. These are just a few glimpses of the economic landscape that PML
(N) has inherited. I have mentioned them for the sake of setting a
benchmark from where we are starting. We are dismayed by this
inheritance but not discouraged or disheartened. If any thing, our resolve
to put things right has only strengthened after realization of the severity of
challenges we are facing. Under the leadership of Mian Muhammad
Nawaz Sharif our party is determined to turn the tide and not just restore
the health of the economy but take it to new heights by enabling it to
realize its full potential.

Mr. Speaker,

7. The budget I have the honor to present today is not a mere
balancing of revenues and expenditures of the government. It is the
statement of economic policy of the PML (N) government that we will
pursue during the course of our tenure. It is based on the Manifesto our
party announced before it launched its election campaign. In this respect,
it is the declaration of our intent to fulfill all promises that we made to the
nation while seeking this broad-based mandate the nation has bestowed
on Mian Muhammad Nawaz Sharif.

Economic Vision

Mr. Speaker,

8. At the outset, I would like to articulate the economic vision that will
be guiding our efforts in rebuilding the economy. It comprises the following
elements:

(1) First, we want to build an economy that is not dependent on
others except through trade and investment, based on
competitive advantage and market considerations. We are a
strong nation of nearly 185 million people and a nuclear
power. As much as we need to defend our frontiers, we need
to protect our economic sovereignty also, which would only
be possible when we refuse to live on handouts and foreign
goodwill. Self-reliance has to be our real goal, for only then
we will earn the needed respect in the ranks of the nations.

(2) Second, the private sector has to be the lynchpin of
economic activities, shouldering the largest burden of
economic functions. A government too occupied in carrying
out business activities that can best be done by the private
sector through a market mechanism is indeed a prescription
for distorting the entire economic system and creating
inequities in its functioning. Of course, markets have to be
regulated so that competitive environment is ensured.
Indeed, because we were too occupied in managing
businesses we have grossly neglected the regulatory role of
the government, to the detriment of safeguarding
consumers’ interests.

(3) Third, the only areas where government’s presence in
economic affairs can be justified is where investments are
too large for private sector to undertake and/or markets are
unlikely to function for lack of adequate commercial returns
even though social returns will be very high, such as in
education, health, population welfare and large infrastructure
projects. Since social sector functions have been devolved
to provinces, and for whom we will make adequate
resources available, at the federal level our primary focus
would be to radically alter and upgrade the fast depleting
physical infrastructure of the country, most notably in the
case of power sector where widespread shortages are
seriously stifling the growth potential of our economy.

(4) Fourth, all segments of the population must share the
burden of resource mobilization for running the government.
The culture of exemptions and concessions must end to
build a self-reliant economy. By the same token, if for
reasons noted earlier, government has to undertake an
economic service, full cost of operations must be recovered.
Non-recovery of cost, through subsidies and non-payment,
may provide temporary relief, but it is an assured
prescription for disruptive supplies and unviable operations
for the companies providing those services.

(5) Fifth, government must limit itself within the broader limits
imposed by the available resources, primarily determined by
revenues collected through different taxes. On this account
government’s performance generally has been dismal, as it
has been incurring expenditures far in excess of our income.
I will say more on this later in my speech.

(6) Sixth, we have to protect our weak and poor segments of
population. People of this country or for that matter any other
nation, are our real strength. The marginalized groups
represent a reservoir of potentialities which if realized will
change the destiny of any nation. It is in this perspective that
we have to treat our poor and weak segments of population
with care and inclusion. Such are also the groups most
vulnerable to extremist ideologies if neglected. Building a
reliable and accessible social safety net for these peoples is
an imperative that we will be committed to fulfill.
Even though this is a simple vision we have strayed from this path
for a long period of time. In the meanwhile, powerful interest groups have
emerged who would like the country to continue to walk along the familiar
but distorted path. In our view, we have lost considerable time in failing to
give a predictable and stable path to our economy. We should not waste
any more time in creating a definite and unmistakable direction for our
economy so that investors can make long-term decisions, both domestic
and foreign and our identity, inherent in the above vision, is firmly
established in the eyes of the world.

10. This budget will unfold the implementation plan for this vision. This
vision will not be realized tomorrow rather it is a long journey that we have
to travel steadfastly. However, a journey of thousand miles starts with first
steps, and that is what, Mr. Speaker, this House will see that in this budget
we will be laying the foundations for realization of this vision.

Main Elements of Budget Strategy

Mr. Speaker

11. Let me turn to specific policy measures we are adopting in the
present budget to address challenges facing the economy and their
solutions:

(1) Reduction of fiscal deficit: At the outset, let me state that
the main plank of our budget strategy is to reduce fiscal
deficit so that its ill effects that pervade through the entire
economy can be avoided. The revised estimate for deficit for
2012-13 is Rs.2024 billion or 8.8% of the GDP and we plan
to reduce it to Rs.1651 billion or by nearly 2.5 percentage
points to 6.3% of the GDP. We need to further reduce it but
we have to do so gradually and in the medium term we do
plan to reduce it to 4% of GDP.

(2) Raising Tax Revenues: I will lay down tax policy and
specific measures in the second part of my speech.

(3) Arresting Inflationary Pressures: The following measures
will help in arresting the inflationary pressures:

i. Reduction in deficit will have salutary effect on
inflation.

ii. Regular price monitoring will be undertaken with a
view to ensure adequate supplies of all commodities.
Extensive networks of Juma and Itwar bazaars all
across the country will be established and wherever
required imports will be used to ward-off of domestic
shortages.

iii. We will be using public savings and cheap foreign
borrowings to finance deficit and reduce the burden of
debt servicing. New domestic saving schemes will be
introduced aimed at enhancing public access to
government securities which are presently heavily
concentrated amongst the banks and given their high
spreads much of the benefits of government
borrowings are flowing to banks than to general
depositors.

iv. Finally, we will be inducting professional managers in
debt management and taking advantage of numerous
opportunities to diversify our debts both domestic and
international.

v. Elimination of borrowings from State Bank will be
pursued vigorously. However, I am at pain to point out
that the SBP Act, 1956, which was amended by this
parliament in 2012 imposing two important constraints
on the government borrowings from the State Bank,
which is basically printing of money, has been
consistently violated by the government. First,
government could borrow from SBP only for a
maximum period of 3 months, and at the end of each
quarter those borrowings will have to be retired.
Second, the then existing stock of debt from the State
Bank, some Rs.1400 billion, was to be retired in a
period of 8 years. Rather than any retirement, this
stock of debt now stands at Rs.2300 billion. We are
now faced with this onerous responsibility to retire this
debt in 6 years at the rate of nearly Rs.400 billion
annually.

(4) Resolving the Energy Crisis: Not withstanding its enormity,
PML (N) government is fully committed to solving the energy
crisis facing the nation. We have chalked out a program and
we are inshallah putting it in operation forthwith. The plan
includes the following elements: First, I am pleased to
announce that Prime Minister Mian Muhammad Nawaz
Sharif has taken an historic decision to settle the entire
circular debt in 60 days, so that every available and
economically viable source of power could be brought on
line. Second, as a result of this, we are confident that the
duration of loadshedding in the country will begin to come
down. Third, for this monumental effort to have the desired
effect on the continued viability of the sector, it is imperative
that we must do all that is needed to stop its recurrence in
the future. I urge all consumers to pay their bills, for without
recovery of cost no service can be provided indefinitely.
Fourth, the office of the Federal Adjuster will be reorganized
and strengthened so that it will ensure expeditious recovery
of arrears of electricity from the provincial governments.
Fifth, Prime Minister will soon announce a comprehensive
plan to incentivize and encourage further investment in
energy projects in Pakistan.

(5) Nandipur Project: I would also like to inform this House that
a highly economical power project, Nandipur for 425 MW,
which initially had a cost of Rs.23 billion was a victim of
criminal negligence and its imported machinery has
remained stranded for the last three years for want of
clearance of certain documents from government
departments. Today its cost has risen to Rs.57 billion. We
have taken immediate cognizance of this situation and are
making necessary efforts to have the documents released
and obtain fresh approval from the competent forums. As
soon as these are in place in the next few weeks, work on its
reconstruction will start immediately and inshallah shall be
completed in 18 months. In the meanwhile, let me make it
abundantly clear that all those responsible for inflicting this
phenomenal loss on the nation shall be brought to justice.

(6) Reducing un-targeted subsidies: As I noted earlier, we
must save country’s finances by relieving it from the burden
of un-targeted subsidies. We are conscious of the need for
the weaker sections of the population to be helped by the
government. Accordingly, any scheme of subsidy, whether in
electricity, gas, fertilizer, sugar and wheat must be targeted
to reach to those weaker segments. We therefore plan to
rationalize the present subsidies and discourage their
indiscriminate use and evolve targeting mechanism to
ensure that deserving recipients should benefit from them.

(7) Improving Balance of Payments: Our biggest woe at the
moment is near absence of foreign resources, critically
needed to sustain our balance of payments and provide
additional resources for development. Inshallah, we are
giving an economic vision and implementing it in this budget
that will significantly raise the confidence of our development
partners. We will soon sort our issues with IFIs and normal
flows will begin to flow in the country. More importantly, we
will ensure a transparent auction of 3-G licenses that will
fetch about $1,200 million. We will also strive to secure the
payment of $800 million from the Etisalat that is due for more
than 5 years. On the back of improved relations with IFIs, we
will return to international capital markets so that additional
resources can be mobilized from this source also. We also
plan to reinvigorate the privatization program that will also
provide us requisite foreign resource and be a catalyst for
revival of foreign investment in the country.

(8) Creating New Jobs: As I have already stated, much of the
new jobs will have to be created primarily in the private
sector. However, government will also play its part in this
regard. In a short while I will give you more details of the
public sector development plan. For now, let me say that
despite reducing fiscal deficit we are raising the development
expenditure from a budgeted Rs.360 billion in the current
year to Rs.540 billion which is a significant increase of nearly
50%. The provincial governments will make another
investment of about Rs.615 billion taking the total public
sector investment to Rs.1,155 billion which is a healthy 4.4%
of GDP. Clearly, there is room for further increase in
development spending but given the resource constraint we
have protected development expenditure and increasing it
also as compared to current expenditures. This investment
will create numerous jobs in various sectors of the economy
and spur other economic activities, which will create further
opportunities for gainful pursuits by our people.

(9) Raising Investment for Growth: Our biggest economic
challenge is to radically increase the level of investment in
the economy. I have already noted some of the steps we are
taking to reduce budget deficit, bring down inflation and pave
the way for a reduction in the interest rate, all of which will
make room for private investment.

(10) Reforming Public Sector Corporations: We are
determined to fully reform and restructure public sector
corporations so that their bleeding is stopped. At the outset,
we have decided to appoint professional managers in all
public sector corporations through a competitive and
transparent process of recruitment. All such corporations
that can be profitably privatized will be put to a credible
process of privatization. Finally, where privatization is not a
possible option either a management contract will be
negotiated or fully independent management will be inducted
to run the corporations on pure professional grounds.
Alongside, full financial restructuring will be carried out to
enable them to run on sound commercial basis.

(11) Protecting the Poor: In its manifesto, the PML (N) has
outlined a detailed strategy for social protection. Indeed, I
am pleased that in 2008 when PML (N) was part of the
federal government for a brief period, as Finance Minister I
had designed a project of income support fund. It was a
program for supplementing the income of poorest of families
on totally apolitical basis with a clear methodology for
identifying the target population. However, the purity of the
program was compromised and it was also politicized. We
owe to our poor families that such a program should
continue with appropriate safeguards and should in fact be
extended to a larger portion of the target population. I am
pleased to announce that the Prime Minister Mian Nawaz
Sharif has decided that the Income Support Program will
continue and will also be expanded. From Rs.40 billion spent
under the program last year, we will be raising its size to
Rs.75 billion, which is nearly doubling of the program.
However, we will bring significant changes in its design and
build an explicit exit strategy for the recipients to ensure that
this support does not promote dependency rather it only
helps them break out from poverty and be able to find a job. I
am also pleased to announce that the amount of Rs.1000
per month under the income support program is increased
by 20% to Rs.1200 per month.

Medium-term macroeconomic framework


Mr. Speaker

12. These are immediate challenges and our responses as we tackle
them. But our vision requires deeper reflection on the problems of our
economy. There has to be a long-term view of enhancing country’s
productive capacity. Accordingly, this budget is part of a medium term
framework spanning 2013-14 to 2015-16 and hence we have a larger time
frame in mind while formulating our economic policy. The key features of
this framework are:

(a) GDP growth to gradually rise to 7% by FY 2015-16.

(b) Inflation will be maintained in single digit throughout the
medium term.

(c) Investment to GDP ratio will rise to 20% at the end of
medium term.

(d) Fiscal deficit to be brought to 4% of GDP by 2015-16.

(e) Pakistan’s foreign exchange reserves will be increased to
more than $20 billion at the end of medium term.

13. Evidently, these targets are ambitious but these are imperative for
the revival of the economy and quite consistent with its potential. Besides,
we have the determination to turn around the destiny of this nation and its
for this reason people have given us this mandate.

Development plan


Mr. Speaker

14. Let me now share some of the key initiatives that we are taking in
the development budget. I will keep my attention to only those sectors that
will contribute most to the economic development.
Water

15. Allah (SWT) has blessed Pakistan with one of the best water
resources in the world. We have also inherited an extensive network of
irrigation canals, water courses and barrages and our early leadership had
the vision of building such mega projects as Tarbela and Mangla that have
enabled us to support our agriculture, so central to our economic life. But
unfortunately we have failed to add to such critical projects or maintain
these precious assets. To meet the growing needs of water it is imperative
that we build new reservoirs and use every cusec of available water for
development of energy.

16. It is this vision in view that is reflected in our development plan
allocation for the water sector. We are investing Rs.59 billion for the water
sector projects that will include such projects as Katchi Canal (Dera Bugti
and Nasirabad), Rainee Canal (Ghotki and Sukkur), Kurram Tangi Dam
(North Waziristan), Extension of Pat Feeder Canal to Dera Bugti, Gomal
Zam Dam (South Waziristan), Ghabir Dam (Chakwal), completion of
Mangla Dam raising, lining of water courses in Sindh and Punjab, flood
protection and drainage schemes all over the country.

Power

Mr. Speaker

17. I need not underline the significance of the power sector in Pakistan
and what our people are suffering due to widespread shortages. Nothing
has consumed the time and energy of PML (N) leadership more than the
problem of energy and its immediate resolution. There are some urgent
but durable steps we are taking that I have announced in the budget to
resolve the central problem behind the energy crisis, namely the circular
debt. However, our real concern is to develop additional resources of
energy so as to permanently overcome the problem of shortages. The
largest amount of resources, accordingly, is being devoted to create more
economical capacity in the country. During the current year a sum of
Rs.225 billion will be invested in this sector of which Rs.107 billion will
come from the PSDP and the remaining will be mobilized by PEPCOWAPDA
through government support. The projects included in the
program include Neelum-Jehlum Hydro Power Project (1000 MW), Diamir-
Bhasha Dam and Hydropower Project (4500 MW), Tarbela Fourth
Extension Project (1410 MW), Thar Coal Gasification Project (100 W),
Chashma Civil Nuclear Power project (600 MW), Two Karachi Nuclear
Coastal Power Projects (2200 MW) with Chinese assistance, Keyal
Khawar Hydro Project (122 MW), Allai Khawar Hydro Project (122 MW),
Combined Cycle Power Projects at Nandipur and Chichiki Malian (950
MW), Upgradation of Guddu Power Project (747 MW gas-based),
conversion of oil based power projects to coal at Muzaffargarh and
Jamshoro (3,120 MW) and numerous projects to improve the transmission
lines, grid-stations and distribution systems.

18. It can be judged that we have a long-term plan to add cheap power
to the national grid and substitute the current dependence on fuel oil to
cheaper alternatives. The improvements in fuel mix will mean future tariffs
will not be rising as fast as they have been in the recent past.

Highways

Mr. Speaker

19. Since the time Mian Nawaz Sharif took the bold decision of building
the Islamabad-Lahore Motorway, no comparable project has been
undertaken, despite the fact that since its construction the size of the
economy has increased manifold and indigenous needs for connectivity
are also multiplying. It is with this urgency that we have carefully examined
the entire portfolio of national highways and have reprioritized it in
accordance with the needs of the country.

20. Both urban and rural populations need communications for their
economics. Farmers will not be able to get good prices for their produce
nor can urban producers be cost effective in the absence of
communication links that can efficiently transport their products to target
markets. Indeed, we must treat development of efficient communication
as an important instrument of poverty reduction, since a significant
number of poor people are disconnected with the places of economic
opportunities and remain poor for lack of access to such places.

21. It is amazing that Gwadar Port was constructed and no significant
effort was made to provide connectivity with the north even though nearly
a decade has passed since its completion. Coastal Highway was made to
bring things to Karachi, completely neutralizing the benefits that were
supposed to accrue with a new port at Gwadar.

22. We are according top most priority to connect the Gwadar Port to
the north by rapidly completing the various sections of Turbat-Basima-
Ratodero and other smaller sections of M-8 so that the real benefits of the
port will begin to flow to the people. We will also accelerate the work on M-
4 connecting Faisalabad to Khanewal and Multan. We plan to undertake a
fresh initiative to build M-9 linking Karachi-Hyderabad on Public Private
Partnership basis and we are confident that we will succeed in executing
this project within the shortest possible time. Let me announce the
commitment of our government regarding motorways: the entire system of
motorways planned by NHA will be completed during the next five years.
This network will guarantee vast expansion in domestic trade, significant
reduction in cost of transportation of goods from north to south, cheap
transport for people to move around in different parts of the country and
increased opportunities of tourism in the country.

23. Besides, the motorway network we have opened a preliminary
dialogue with the Chinese government for constructing a high quality
modern expressway linking Gwadar with Kashgar. This will be the modern
equivalent of ancient silk-route. This is a visionary project and will unleash
an historic progress in the region and provide a critical opening for
Pakistan with our northern neighborhood.

24. Apart from these strategic projects, we are investing in a large
number of national highways, bridges, rehabilitation and reconstruction of
national roads destroyed by the floods and regional roads for connectivity.
A sum of about Rs.73 billion has been kept in the budget for the road
sector. Numerous job opportunities will be created while undertaking the
above projects.

Railways

Mr. Speaker

25. One of the most unfortunate examples of wasting our inherited
infrastructure at the time of Partition can be found in the state in which our
railway is found today. Once a most effective, extensive and efficient
network of communication is not even a shade of its past. The speed with
which the railways’ significance in the transport sector has declined
indicates that it is headed for near extinction. This is simply unacceptable.
The world over, rail transport is regaining its lost glory as more
investments are made and faster trains are built for both passenger and
goods transport. What is more, this mode has been declared as
environment friendly and hence it should be preferable to vehicular traffic
that is degrading our road infrastructure and increases our dependence on
fossil fuels.

26. Our railway is the victim of bad governance, low investments in
maintenance, induction of new locomotives, upgradation of rolling stocks,
replacement and modernization of primitive signaling system, efficient
communication network, track maintenance and doubling of the track on
mainline. Stagnant tariffs, declining market share in both passenger and
goods transport, rapidly falling revenues have all contributed to bringing
railway to a point where its pay and pension, of nearly Rs.34 billion, is paid
through a subsidy from the government.

27. An inherently commercial and profitable organization today stands
in a state of huge losses, countless stores of precious amounts of refused
rails, rolling stocks, locomotives and rebuilding factories suffering from low
capacity utilization. It is, however, not a poor organization, as it owns
priceless lands, the main artery of rail link and large number of branches
connecting far flung areas of the country, numerous bridges, countless
buildings, factories, historic railway stations and a very large cadre of
technical and civil servants. They are highly skilled, but presently they are
demoralized and demotivated, as they see no hope for their betterment
tomorrow. The real problem, therefore, in a sense, is not lack of
resources, but their utterly inefficient utilization. All this can be changed
with leadership, vision, commitment and a plan, to be faithfully
implemented, that would aim at complete leveraging of railway assets,
infrastructure and improving incentives of employees to perform better.

28. We are committed to revive Pakistan Railways and lay the
foundation for restoration of its past glory. Minister for Railways is
developing a detailed plan for the above purpose, but let me outline the
basic features of the agenda we shall pursue:

(a) Through an Act of the Parliament, Pakistan Railways will
be converted into a proper corporation, with due security
of job and terms and conditions of the employment of the
existing employees;

(b) The railway shall be managed by an independent Board to
be drawn from amongst the professionals from the fields
of public transport, engineering, management,
accountancy, finance, law and public administration;

(c) With the approval of the Board and the Federal
Government, railway administration will design a policy for
public private partnerships for the profitable utilization of
all railway assets.

(d) Development funding for railway will be gradually
increased for locomotives, doubling of track, addition to
rolling stocks, rehabilitation of signaling system and
modernization of communication links. Next we are
allocating Rs.31 billion for different projects of railway
compared to the revised estimate of Rs.20 billion for 2012-13;

(e) Feasibility studies will be completed for linking Pakistan
through rail from Gwadar to Afghanistan, on one side, and
Gwadar to China, on the other;

(f) Karachi Circular Railway project will be expedited through
the help of Government of Japan;

Human Development

Mr. Speaker

29. The most precious resources of any nation are their people.
Indeed, it is said that the real development is embodied in the people, no
matter how much of its outer manifestation is reflected in physical
developments. Accordingly, we must treat expenditures on human
development as investments as they lay the foundation of future growth at
an accelerated pace.

30. Incidentally, the three main subjects of human development,
namely education, health and population welfare have been devolved to
the provinces under the 18th Constitutional Amendment. However, the
responsibility for higher education, regulatory responsibilities and
international coordination remain with the federal government. I would like
to mention the following. Initiatives that will be undertaken for the
promotion of this sector:

(a) A sizeable allocation of Rs.18 billion has been made for the
Higher Education Commission, which will support
development plans of different universities all over the
country. It may be noted that on the current side also a hefty
allocation of Rs.39 billion is made for HEC. Thus a combined
outlay of Rs.57 billion will be made for higher education.
(b) The enrollment in higher education will increase from 1.08
million students in 2012-13 to 1.23 million students in
2013-14, showing an increase of 14% in the population of
students pursuing higher education;

(c) The number of foreign scholarships will rise to 6,249 from
4,249, showing an increase of 2000 scholarships during
2013-14.

(d) Federal Government, despite devolution, is continuing to
fund a number of national health initiatives. This year we are
allocating nearly Rs.26 billion for these programs.

(e) The programs include Expanded Program of Immunization
(EPI), National Maternal Neonatal and Child Health
Program, National Program for Family Planning and Primary
Healthcare and several national programs for prevention and
control of important diseases such as blindness, TB,
Hepatitis and AVN Influenza.

(f) Most importantly, funding for the provincial programs for
population welfare will continue to be provided by the federal
government. This year an allocation of nearly Rs.9 billion is
made for this purpose.

Industry and Regional Trade

Mr. Speaker

31. It is now well known that over the last five years our industry has
been suffering from gross neglect of policymakers, lack of institutional
support, energy bottlenecks, absence of adequate credit facilities, and
poor state of infrastructure, poor governance and burdensome regulatory
regimes across both provincial and federal governments. These are very
serious impediments and not surprisingly, as a consequence, investment
has declined sharply in the country during the last five years and industrial
growth has averaged a paltry 1.8 percent. With this growth rate, we cannot
possibly hope to attain the overall growth rate of 7 percent that we have
targeted to achieve by the last year of our medium term budgetary
framework 2015-16.

32. We are conscious of the centrality of the manufacturing sector in
the overall socioeconomic development of Pakistan and its potential to
create jobs for our youth. Our plans will remain unrealistic unless we are
able to revive the industrial sector. I would like to announce the following
measures that we will undertake in the near future to accelerate industrial
development in the country:

(1) The policy of developing Export Promotion Zones with
comprehensive incentive packages, which we had earlier
supported with enthusiasm, will be reviewed and necessary
amendments made to make it more attractive.

(2) In collaboration with the provincial governments new
industrial estates will be established throughout Pakistan,
fully equipped to provide all the required infrastructure for
industrial undertakings.

(3) Even while in Opposition, we played a pivotal role in
introducing the Special Economic Zones Act 2012. This
legislation required earnest commitment and serious effort to
bear fruit. Not much has been done to put this Act in
operation. We will now bring this legislation to fruition by
implementing it in letter and spirit, backed by a strong public
policy commitment.

(4) We have a comprehensive plan to develop the Gwadar
Special Economic Zone, which will be watershed for the
economy of not just Balochistan, but of the whole country.
The Zone will be linked with major economic centers in
Pakistan as well as neighboring countries. Through Gwadar,
we hope to make Pakistan a regional center and conduit of
international trade, especially with China and Central Asia.
The potential of transformation of Pakistan becoming a
regional gateway of international trade is limitless.

(5) We will earnestly develop strong trade relationships with all
our neighbors, primarily to expand markets for industries and
to improve the regional terms of trade.

(6) State institutions will be strengthened to provide a healthy,
reliable, and conducive economic environment for the growth
of trade, commerce and industry.

(7) With improved macroeconomic framework, more credit will
be available for the private sector investment.

(8) The revival of privatization program will create more
opportunities for the private sector to invest and manage
newer assets that were previously run in the public sector.

Housing


Mr. Speaker

33. A ‘roof over the head’ is the right of every Pakistani. Unfortunately,
the housing gap is rising ever so fast in the country. While the private
sector land developers have catered for the needs of the middle and
upper-middle classes, nothing has been done to provide decent housing
for the low and lower-middle classes. With no prospect of profitmaking, it
is quite understandable that the private sector remained oblivious to the
needs of these otherwise very important societal groups. During our last
tenure, we introduced housing schemes for the poorest of poor throughout
the country, especially in the rural and semi-urban areas. Under these
schemes, land was provided free of cost. Although Ministry of Housing
and Works is developing the detailed plan, I would like to share the main
features of the policy on provision of housing to the poor:

(1) Wherever feasible, 3-Marla housing schemes will developed
on government land for the homeless, to whom plots will be
given free of cost

(2) At least 1,000 clusters of 500 houses each will be developed
for low-income families through public private partnerships

(3) To ensure cost-effective access to credit for housing,
government will be picking up a portion of the financing cost
on behalf of the borrower. A provision of Rs.3.5 billion is kept
in the budget for this purpose;

(4) Schemes on the model of Ashiyana Housing Scheme will
also be developed in which the government will provide
opportunities to low income families to own their house on
payment of easy installments.

Budget Estimates


Mr. Speaker,

34. Let me place before the House the estimates of revenues and
expenditures for the next fiscal year.

35. For 2013-14, the gross revenue receipts of the federal government
are estimated at Rs.3,420 billion compared to the revised figures of
Rs.2,837 billion for 2012-13, showing an increase of about 21%. This is
remarkable revenue effort we are projecting and I shall share more details
of this in Part-II of my speech.

36. The share of the provinces out of this amount will be Rs.1,502
billion compared to Rs.1,221 billion last year, and showing an increase of
about 23%. Net resources left with the federal government will be
Rs.1,918 billion compared to the revised estimates of Rs.1,616 billion for
last year, showing an increase of about 19%. The level of transfers to the
provinces is historic. We are happy to share this larger revenue as under
the new constitutional arrangements provincial responsibilities, particular
relating to social sectors have been significantly enhanced. We are sure
that higher resource transfer will enable them to bring the critical social
services and law and order facilities to the doorstep of our people.

37. Total expenditure for 2013-14 is budgeted at Rs.3,591 billion
compared to the revised estimates of Rs.3,577 billion for 2012-13,
showing a negligible increase. This is the first indication of an austere
budget in line with the imperatives of the economy. The current budget is
estimated at Rs.2,829 billion for 2013-14 against a revised estimate of
Rs.2,720 billion for 2012-13, showing an increase of 4%. However,
keeping in view the development needs, investment requirements of the
country and urgency of creating additional job opportunities, we have
provided adequate development resources. Against a budgeted estimate
of Rs.360 billion for PSDP, we have budgeted it at Rs.540 billion showing
an increase of nearly 50%.

38. The federal deficit is projected at Rs.1,674 billion for 2013-14
compared to the revised estimate of Rs.1,962 billion for last year. By
requiring a small surplus of Rs.23 billion from the provinces, compared to
a revised deficit of Rs.41 billion last year, we have projected an overall
fiscal deficit of Rs.1,651 billion for 2013-14 compared to the revised
estimate of Rs.2024 billion last year. This gives deficit to GDP ratio of
6.3% for 2013-14 compared to an alarmingly large deficit of 8.8% incurred
last year.

Mr. Speaker

39. It is evident that our government is laying the foundation of a sound
economy, which is the most important challenge our country is facing. We
have not gone for populism but have responded to the imperative of the
situation in hand. An adjustment of nearly 2.5% is not a mean
achievement and we are confident that we will deliver it.

PART-II


Mr. Speaker,

41. Allow me to start Part II of my speech, which relates to taxation
proposals.

42. As a nation, we need to make appropriate decisions so that
Pakistan can live within its own means, bring down deficit to reasonable
limit and mobilize requisite resources for development.

43. The PML (N) Government seeks to encourage overall economic
activity in the country and create an conducive environment which
facilitates genuine investors and business. As we all know, when business
flourishes, employment opportunities are created, investment flows into
the country and ultimately, there is peace and prosperity.

Mr.Speaker,

44. To achieve these objectives, the Government has decided not to
put additional burdens on those people who are already paying their due
share of tax, but to make efforts to ensure that those who are not paying
anything should be forced to contribute something to the national
exchequer. The revival of national economy is the main focus of the PML
(N) government. This requires fundamental and structural reforms in the
area of Taxation.

Mr. Speaker,

45. The earlier PML (N) government raised Tax to GDP ratio to 13%,
which was the result of simplification of tax laws, making taxes broad
based, plugging loopholes in the system and holding tax machinery more
accountable. The reform process was halted with the illegal and arbitrary
dismissal of the PML (N) government and as a result, the Tax to GDP ratio
declined gradually and is presently at alarming rate of 9%. The focus of
the budget 2013-14 is improvement in Tax to GDP ratio finally reaching to
15% by 2018.

Mr. Speaker,

46. The immense economic challenges being faced by the country
require a smooth flow of revenue generated through our own resources,
reducing reliance on aid and foreign loans. It is of utmost importance that
we become self reliant. The country is going through a severe energy
crisis. Mobilization of adequate resources is required to address this issue
so that suffering of our people are mitigated.

Mr. Speaker,

47. The broad themes of our government’s taxation policy are (i) taxing
those who are not paying any tax, (ii) enhancing efficiency of the tax
machinery, (iii) removing anomalies and distortions in the tax system, (iv)
simplifying the tax procedures, (v) broadening of the tax base, (vi)
rationalization of tax rates and exemptions, (vii) encouraging
corporatization and documentation (viii) taxpayers facilitation and (ix) to
eradicate maladministration and corruption in F.B.R.

Mr. Speaker,

48. A fair and equitable tax system lays more emphasis on direct taxes,
so that the affluent classes of society pay more. Unfortunately, in our
taxation system, indirect taxes have a major share, leading to tax burden
on common man. This year, a paradigm change has been made in
proposing tax measures, as the overwhelming revenue proposals relate to
direct taxes.

Income Tax:

Mr. Speaker,

Relief Measures

49. A number of relief measures are being proposed under the Income
Tax Ordinance through this Finance Bill. These measures are highlighted
below:

(1) With effect from fiscal year 2014-15, the maximum
corporate tax rate will be reduced by 1% annually to
coming down to 30% from the present 35%. This will
promote a culture of corporatization in the country;

(2) The income tax exemption of 5 years for investments
made in Special Economic Zones will be increased to 10
years. This will be helpful in increasing investments in
such zones;


(3) The facility of exemption certificate for the manufacturers
on import of raw material was withdrawn a few years back
which adversely affected the cash flow and resulted in
overpayments and creation of refunds. In order to facilitate
the manufacturing sector, facility of exemption certificate
on import of raw material is being reintroduced subject to
payment of tax liability determined for any of the preceding
two years, which is higher.

(4) Currently goods transport vehicles are subjected to
minimum tax on services and income tax paid at the time
of payment of provincial motor vehicle tax, which is final
tax. This renders the transport sector to double taxation,
which is unjustifiable. For the facilitation of the transport
sector, Income Tax paid along with provincial motor
vehicle tax is being made adjustable.

(5) The facility of carry forward of Unadjusted Minimum Tax
was restricted to the corporate sector which was
discriminatory to the non-corporate sector. In order to
provide a level playing field to all taxpayers, this facility is
also being extended to Individuals and AOPs.

(6) Likewise, reduction in Minimum Tax was restricted to the
distributors of cigarettes in corporate sector. Being
discriminatory to small taxpayers working in the status of
AOPs and Individuals of this sector, reduced rate of
minimum tax is also being extended to the individuals and
AOPs.

Broadening of Income Tax

50. It is well known that our tax base is extremely narrow. The most
important need of tax reforms is to broaden the net as widely as possible
to bring in all those people who have the ability to pay taxes. It is equally
desirable that those who are already in the net should face a rational,
predictable and simple regime for tax compliance. For all these objectives
following measures are being adopted:

(1) Huge expenses are incurred on functions such as
marriages etc. but remain un-documented, which restricts
a proper analysis of income earnings. In order to
document such expenses an adjustable withholding tax is
being introduced which the Hotels/Clubs/Marriage
Halls/Restaurants etc. shall collect from persons arranging
the functions. Being an adjustable tax, people shall be
encouraged to file income tax returns, which shall serve
the purpose of broadening of tax base;

(2) To align income tax and sales tax and to discourage fake
invoices, it is proposed that all persons registered under
the sales tax law shall be made withholding agents for
Income Tax purpose on payments on account of
purchases, services and contracts;

(3) To ensure that the taxpayers do not abuse the facilities
and reliefs provided in the Income Tax Law to avoid
proper taxation by consistently declaring losses and
contribute to the exchequer equitably, the rate of minimum
tax shall be enhanced from 0.5% to 1%.

(4) The construction sector contributes Rs.1 billion to the
national exchequer, which is not proportionate to its
potential. Its taxation is normally spread over multiple
years depending upon the period of construction. In order
to simplify taxation of construction sector minimum tax on
builders and developers is proposed. The tax shall be paid
at a the rate of Rs.50 per sq. ft. of the constructed area; or
Rs.100 per square yard of the developed land, as the
case may be.

(5) The rates of tax on salary introduced last year
overburdened the middle-income group. This anomaly has
been corrected through this Finance Bill by rationalizing
the rates of tax on salaries in way that each income group
pays tax according to its capacity.

(6) Rate of tax on Business individuals and AOPs shall be
rationalized with the addition of two new slabs. This will
gradually increase the rate from current maximum of 25%
for income exceeding Rs.2.5 million to 35% for income
above Rs.6 million.

(7) To encourage corporatization, separate rates of WHT for
non-corporate taxpayers i.e. commercial imports,
contracts, supplies and services are being proposed.

(8) New adjustable withholding tax is being proposed for
foreign-based films and dramas to make them competitive
with the local film industry.

(9) To bring dealers/Arhtis of commodities in tax net, WHT on
the basis of registration category is being introduced.
Market committees shall collect this adjustable tax from
such dealers.

(10) To tax affluent class on the basis of its expenses, it is
proposed that adjustable withholding tax may be
introduced @ 5% on annual fee of Rs.200,000 paid to an
educational institution.

(11) Traders are not contributing to the tax revenue in keeping
with their share in GDP. Adjustable withholding tax is
accordingly proposed to be collected from wholesalers
and retailers in specified sectors @ 0.1% and 0.5%. The
rate of tax to be collected from wholesalers and dealers is
being reduced to 0.1% from 0.5%. The manufacturers,
distributors and commercial importers shall collect this tax.

(12) Agriculture sector enjoys exemption from payment of
federal tax but this facility has been misused as untaxed
non agriculture income is concealed in the garb of
agriculture income. In order to check the misuse of law, it
is proposed that credit of agricultural income shall be
given only if provincial income tax on such income has
been paid. It will also facilitate in enhancing the revenue of
Provinces from agricultural income.

(13) The law for obtaining information from bank regarding its
customers is being aligned with international practices.
The objective is to strengthen the National data
warehouse at FBR for tax base broadening.

(14) In order to expand the tax base, it is decided to utilize data
collected by the Federal Board of Revenue and NADRA in
a systematic manner. In this regard profiling of 500,000
persons identified on the basis of financial transactions
traced shall be carried out. Besides, display of NTN at
business premises is also being made mandatory to
broaden the tax net. These measures will increase out
reach of the department and promote the culture of
voluntary compliance.

Introduction of Income Support Levy Act


Mr. Speaker,

51. It is incumbent on all of us who are blessed with exceptional favors
from Allah (SWT) to contribute to the welfare of those not so fortunate.
Many of us who may have earned our assets while working abroad have
negligible tax liabilities under the existing laws and double taxation
treaties. Yet we must share the burden of helping our weaker segments of
population. In order to mobilize additional resources for enhancing the
income support program for the poorest families in Pakistan, it is proposed
to impose a small levy on such persons. This levy shall apply on net
moveable assets of persons on a given date @ of 0.5%. The receipts
under this head will be credited to income support program of the
government. Voluntary contributions will be also be solicited to mobilize
additional resources. Let me admit that I shall be amongst the first ones
who will be hit by this levy. According to my estimation, I will have to pay
an additional Rs.2.5 million on this count this year, but I will be too happy
to make this contribution for the welfare of our poor people.

Sales Tax and Excise Duty

Mr. Speaker,

52. Several measures have been proposed for broadening the bases of
sales tax and excise duties for bringing into the tax net those who have
remained outside so far. Our policy is that persons who remain
unregistered will have to bear a greater burden than those who are
registered. These measures are highlighted below.

(1) An additional amount of sales tax of 5% is being
imposed through electricity and gas bills of those having
commercial or industrial connections but remain
unregistered. Once they get registered, it will no longer
apply to them.

(2) All taxable supplies made to unregistered persons will
include 2% further tax, for encouraging registration.
Again, once they get registered, they will no longer have
to bear this charge.

(3) The sales tax withholding agents will now withhold the
full amount of sales tax on purchases made from such
unregistered persons.

(4) Certain important measures are being initiated to
enhance the efficiency of the tax machinery and increase
its enforcement capacity. These measures are explained
here.

(5) To reduce leakage in sectors prone to evasion, the
government is planning to initiate electronic monitoring of
production processes through video links, tax stamps
and labels, electronic tracking, etc. Effective monitoring
without human intervention will help introduce a
transparent, automatic, and error-free way to ensure
proper payment of taxes by these sectors.

(6) FBR has already developed a sophisticated
computerized system, called CREST, which has recently
helped to detect and recover billions of rupees from the
textile sector. This system will be enhanced and
expanded, so that leakages of revenue in other sectors
can also be detected and recovered.

(7) It is also proposed to introduce a simplified and
centralized mechanism to block illegal refunds and input
tax adjustments, to stop fake and flying invoices, and to
prevent bogus registered persons from committing tax
frauds.

(8) To ensure proper monitoring of taxable activities, the
registration of registered persons will be placed in the
jurisdiction where its business premises are located.

(9) In view of serious resource constraint it is imperative that
additional resources should be mobilized immediately.
Accordingly, it is proposed to raise the standard rate of
sales tax from 16% to 17%.

(10) Supplies made under international tenders used to be
zero-rated, but were made exempt last year to stop
creation of refunds and associated malpractices.
However, this measure created a disadvantage for local
competitors, as they could no longer claim input tax
adjustment. To create a level playing field for both local
and foreign competitors for international tenders, it has
been decided to remove the disparity and place both
local and foreign competitors under the same standard
tax regime.

(11) Zero-rating of sales tax on local supplies tends to create
distortions and promotes malpractices. But since
ordinary people also use many of these zero-rated items,
sales tax is not being imposed on them and they are
being exempted from sales tax.

(12) It has been decided to expand the list of items in the
Third Schedule to the Sales Tax Act. The measures will
not only require manufacturers and importers to print
retail prices on consumer goods, but also enable the
government to capture the tax involved till the retail stage
instead of the benefit going to unregistered wholesalers
and retailers.

(13) The five export-oriented sectors were enjoying zerorating
on local supplies over the past several years,
which has recently been changed to a reduced rate
regime. However, even expensive imported goods like
branded clothes, leather bags, and sports goods are
enjoying the reduced rate of 2%. Some items enjoying
the reduced rates have multi-purpose use in other
industries, which creates distortions. To remove these
problems, finished goods and items having multi-purpose
use are being taken out of the reduced rate regime.

(14) In 2010, due to the prevailing situation, a general
exemption of duties and taxes was extended to the tribal
areas and some districts of Khyber Pakhtoonkhwa.
These were supposed to be time-bound exemptions, and
the income tax exemption has already expired. However,
the notifications for sales tax and federal excise
exemptions did not have any expiry clause. The
continued exemption is creating a distortion and
difficulties for businesses in other regions. It is, therefore,
proposed to be withdrawn.

(15) In case of federal excise, manufacturers of edible oil and
ghee complained of distortion, as those using locally
produced oil or imported oilseeds were not paying any
tax. To remove this anomaly, locally produced oil and
imported oilseed are being subjected to the similar tax
regime as imported edible oil.

(16) Presently, financial services offered by banking and nonbanking
sectors are subject to federal excise duty. There
is no duty if other persons provide the same services. To
remove this disparity, it is proposed that federal excise
duty at the same rate may be imposed on all such
financial services.

(17) At present, imported edible oil is subject to tax. However,
canola seed is being freely imported. This is not only a
disparity but also hurts the local oil seed production. To
remove this disparity, it has been decided to impose
federal excise duty @ 40 paisa per kilogram on imported
canola seed.

(18) The Federal excise duty on cigarettes is simplified and
re-structured, from three slabs based on a composite
formula, to two slabs based on a specific rate.

(19) It is proposed to allow the aerated beverage industry to
pay tax on capacity or fixed basis. It would not only
facilitate them, but would help them contribute a
handsome additional amount to the exchequer. It would
eliminate corruption and make the system transparent
and clear. It will also encourage the industry to expand.
The detailed notification for implementing the new
regime will be issued shortly.

Customs:

Mr. Speaker,

53. Let me say that Pakistan’s import regime over the decades has
become fraught with a complex system of discriminatory exemptions and
concessions. Every year national exchequer suffers a cost of Rs. 100
billion on account of these exemptions. In today’s world of free trade and
level playing field this cannot go on. We have to adopt a simple tax and
tariff structure by abolishing the culture of SROs.

54. In order to resolve this long protracted issue, a high level committee
headed by Chairman, FBR is being constituted. The committee will
examine and finalize its report after consulting all the stakeholders and
submit its recommendations to the ECC for tariff rationalization and
minimization of concessionary regime.

55. Power shortage has become a chronic problem for the whole
country. While major initiatives are being taken to address the power
generation and supply situation, a major shift towards the use of
renewable energy resources is also a need of the time. In this context
various measures are being included in the current budget to encourage
use of alternate energy resources by simplifying the procedure for duty
free import of solar and wind energy machinery and equipment. At the
same time, duty on energy saving devices like energy saving tubes, solar
water pumps etc. is also being exempted.

56. Despite prevailing economic situation, every possible effort is being
made to provide some respite to the suffering poor of Pakistan.
Availability of clean water is fundamental right of every Pakistani. In order
to address the spread of water borne diseases through use of filtered
water, rate of customs duties on water filtration equipment is being
reduced.

57. Use of imported POL products as a major source of energy has not
only led to high import bill, but has also created a negative environmental
impact. Therefore, use of alternate energy efficient Hybrid Electric
Vehicles (HEVs) needs to be encouraged. It is, therefore, proposed that
HEVs up to 1200cc will be exempt from duties and other taxes. From
1201cc to 1800cc 50% relief from duties and other taxes will be provided
and from 1801cc to 2500cc, 25% relief is proposed. No relief will be
available for vehicles beyond 2500cc.

58. Betel nuts and betel leaves are injurious to health. In order to
discourage their consumption, custom duty on both these items shall be
increased.

Mr. Speaker

59. The proposed tax measures are the most important need of the
economy. It will help us in reducing fiscal deficit and also reduce our
dependence on external resources. Thus this is an important move toward
achieving self-reliance.

PART-III

New Programs for Youth

Mr. Speaker

60. One of the key messages Prime Minister had given during election
campaign was his commitment to toward the welfare of our youth.
Amongst all sections of our population it is our youth that must not be
struck despair and despondency. It is in fulfillment of his promises with
the youth that following new programs will be launched in next year’s
budget:

(1) Prime Minister’s Youth Training Program: Amongst the
youth, the most vulnerable group are those who have
completed a 16-year degree program but have not been able
to find a decent job, mostly for lack of appropriate
experience and training. It is the most cherished desire of
the Prime Minister that the government must handhold this
group of highly educated youth to inspire confidence and
assurance in their lives. Accordingly, he has directed that a
comprehensive scheme be developed for such youth in
government offices, corporations, bodies and authorities at
all levels. All those completing a 16-year degree program
and below the age of 25 years will be eligible for selection
under the scheme. A one-year training program will be
designed for these graduates during which they will be
entitled for a stipend of Rs.10,000 per month. Ministry of
Education, Training and Standards for Higher Education will
administer the scheme and each applicant will apply on-line
and his/her degrees will be verified also on-line by HEC. I
am confident that this scheme will provide a useful training to
qualified youth nearer their homes and will enable them to
fare better in the job market.

(2) Prime Minister’s Youth Skills Development Program:
Under this program 25,000 young persons up to the age of
25 and will minimum qualification of middle, will be imparted
training in a number of trades across the country. National
Vocational and Technical Training Authority (NAVTEC) will
manage the program in collaboration with provincial TEVTA
authorities. Six months training will be given for which fee
will be paid by the government. Emphasis will be placed on
such trades as are in demand abroad or will enable the
graduates to become self-employed.

(3) Small Business Loans Scheme: With a view to enable our
youth to start their own business, small business loans will
be made available through the banking system. Under the
scheme loans ranging from Rs.100,000 to Rs.2,000,000 will
be available at a mark-up cost of 8%. The remaining cost will
be borne by the Government. In the first year of the scheme,
50,000 loans will be offered. The scheme will be
strengthened in the light of experience gained in first year of
operation.

(4) Prime Minister’s Scheme for Provision of Laptop: To
promote access to information and communication
technology it has been decided that provision of a laptop for
distinguished student pursuing higher education should be
made. All students pursuing a degree program from one of
the HEC recognized universities or institutions and meeting
merit criteria to be developed by HEC would be eligible to
get a laptop. HEC will announce the details of the scheme
shortly.

(5) Fee Reimbursement Scheme for Less Developed Areas:
Under an existing scheme bright students from less
developed areas are provided tuition fee support while
pursuing higher education at Master’s and Doctorate levels.
Presently, it is available to students from Balochistan, FATA,
Gilgit-Baltistan. There is no reason why this support should
not be expended to other less developed areas such as
those of Interior Sindh and Multan, Bahawalpur and D.G.
Khan Divisions of South Punjab, which are equally less
developed. Accordingly, students from these areas pursuing
higher education on merit will also be eligible for tuition fee
support.

(6) Prime Minister’s Micro Finance Scheme: To enable our
men and women to undertake micro enterprise activities, it is
decided to allocate Rs.5 billion to launch a scheme of Qarze-
Hassana (loans without mark-up). These will be made
available through selected micro finance providers including
Akhuwat, NRSP and Provincial RSPs. Fifty percent of the
beneficiaries of this scheme will be women.

(7) Prime Minister’s Housing Finance Scheme: Under this
scheme, a mortgage facility of Rs. 1.5 million to Rs. 5.0
million will be offered at a mark-up rate of 8%. Fifty thousand
people will benefit from this scheme.

Mr. Speaker

Good governance

Public Works Programs for Parliamentarians


61. Before I close budgetary proposals, let me announce a historic
decision taken by Mian Muhammad Nawaz Sharif. This relates to the
public works programs undertaken on the recommendations of the
parliamentarians. There were two programs for this purpose PWP-I and
PWP-II. The PWP-I was well structured and was based on equal amount
for all parliamentarians with an allocation of Rs.5 billion. This program is
being retained. However, the other program had no structure and
depended on the discretion of the Prime Minister.

62. This program will be stopped forthwith. Mr. Speaker, this one
decision is the forerunner of the new style of governance the Prime
Minister will bring to the job to move Pakistan ahead with dignity and
honor.

Secret Service Expenditures

63. In recent days the nation has also come to know that in the name of
secret service expenditures a long list of ministries and departments have
been incurring such expenditures, which are excluded from the
requirement of audit. This exclusion from audit was meant for such
expenditures incurred by agencies connected with the national security.
We have taken immediate cognizance of this matter and yesterday
Ministry of Finance has issued necessary instructions for immediate
ceasing of such of such expenditures and return of unspent balances.
Simultaneously, the allocations for the next year have been cancelled.
Henceforth, such secret service expenditures will be made only be
agencies connected with national security. Appropriate amendment in law
and rules is being made for this purpose.
Discouraging VVIP Culture

64. In 1997, the Prime Minister Mian Muhammad Nawaz Sharif had
withdrawn the exemption given to VVIPs for duty and tax-free import of
luxury vehicles for personal use. Consequently, in the Import Policy Order
1998, which I had announced, the Entry No 1.15 of the Import-Export
Procedure was deleted that allowed imports of such vehicles. However,
unfortunately such an exemption was accorded in violation of this
provision in 2005. Our government would like to reiterate that this ban on
duty and tax-free vehicles will continue without exception.

Austerity Measures

65. We are passing through difficult times and its incumbent on us that
we reduce our expenditures as much as possible. For this purpose, we
have decided to take the following austerity measures to be applicable in
the new fiscal year:

(a) The most pressing need of the government is to
consolidate its unwieldy size. Prime Minister has decided
not to use the full strength of the Cabinet that is provided
in the Constitution, which are 49.

(b) To conserve precious resources, the Prime Minister has
decided to start the exercise from his own Office. His
office will be lean and mean. Furthermore, he is also
applying significant cuts to the budgetary allocations for
his office. From the budget of Prime Minister’s Office,
against a revised expenditure of Rs.725 million during
2012-13, the budget estimate for 2013-14 is only Rs.396
million showing a decrease of 45%. From the budget of
Prime Minister House, excluding salaries and allowances,
44% budget has been cut.

(c) Other than the obligatory expenditures of debt servicing,
defense, pay and allowances of civil servants and grants,
there will be a 30% cut on all other expenditures in
accordance with the announcement of the Prime Minister.
This will save Rs.40 billion;

(d) With the exception of operational vehicles of law enforcing
agencies and critical development projects, no car will be
purchased;

(e) The discretionary grant of federal ministers is removed;
Relief measures for retired government employees
66. Despite austerity drive we are mindful of the difficulties being faced
by retired government employees. To mitigate their difficulties it has been
decided to increase pensions by 10% from July 1, 2013, with the
additional relief to low pensioners, whose minimum pension is increased
from Rs.3000 to Rs.5000.

Ramzan Package


67. The Holy month of Ramzan is just around the corner. To ease the
burden on our people, we are designing a comprehensive plan for
providing relief during this month by significant reduction in prices of major
kitchen items through the Utility Stores Corporation. An amount of Rs.2
billion has been allocated in the budget for this purpose. Additionally, we
are making efforts to (text missing, not included in the full text - That Guy)

Concluding Remarks

Mr. Speaker,

68. As I said at the beginning, we have inherited a broken economy but
we are determined to face the challenge of its reconstruction squarely.
There is no evasive action that we plan to undertake neither is we burying
our heads in the sand. Lofty ideals are never achieved by turning your
back on the adversities encountered on the way. Under the
circumstances, the nation should appreciate that the path we have
selected is tortuous but once traversed, it will lead the nation to prosperity
and progress that is consistent and in line with the possibilities and
potentialities possessed by us.

69. This is the lesson we can learn from our Great Quid Muhammad Ali
Jinnah, who under a serious medical condition chose to travel to Dhaka to
quell a disenchantment facing the nascent state. While concluding a long
but highly inspiring speech before one the most largely attended public
meetings on 21 March 1948, the Quid said, and I quote:

Finally, let me appeal to you – keep together, put up with
inconveniences, sufferings and sacrifices, for the collective
good of our people. No amount of trouble, no amount of hard
work or sacrifice contribution is enough for the collective
good of your nation and state. It is in that way, that you will
build a Pakistan as the fifth largest state in the world, not
only in population as it is but also in strength, so that it will
command the respect of all the other nations of the world.

70. Curiously, I find that Allama Muhammad Iqbal, who first conceived
the idea of Pakistan, had a similar message for us we he formulated this
powerful and apt description of our potentialities:
Mr. Speaker,

71. Let’s start our journey on the road identified by Quid-e-Azam and
Allama Iqbal the two great leaders of Pakistan movement. Allah (SWT) will
be our Guide and Supporter.

Pakistan, Paindabad.

FinalBudgetSpeech_13_14_english.pdf



thoughts? From what I can read, it's mostly all talk and no substance. There is very little information about how the money will be raised properly, and just promises without any real details.

@WebMaster @Aeronaut @fatman17 @RazPaK @RiazHaq @Pakistanisage @Pak-one
 
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batmannow

ELITE MEMBER
Jan 28, 2008
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ohh bhai khama khoi itni takleef ki hai?
buss yeh bata doo dollor kaa kiya rate nikla hai ajj?
saab pata chaal jaega?
 

johndavid1122

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New Recruit

Jun 13, 2013
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batmannow

ha ha ha ha ha ha i agree with you

pakistan oor mehngai na hoooo ha ha ha ha its very funny joke hmmmmmm
 

mr42O

SENIOR MEMBER
Aug 15, 2009
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SO pmln manifesto and promies made in election was totaly lies ??

Enjoy ROSHAN PAKISTAN lol....

Landlords, rich ppl of nation friendly budget and poor ppl lifes getting even worse.
 

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