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Pakistan - Budget 2018 - 2019

Discussion in 'Pakistan Economy' started by ghazi52, Apr 27, 2018.

  1. ghazi52

    ghazi52 ELITE MEMBER

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    Newly appointed Finance Minister Miftah Ismail announces Budget 18-19


    The outgoing PML-N government's newly appointed Finance Minister Miftah Ismail is presenting a sixth full-term budget in the National Assembly on Friday amid opposition protests calling for a budget covering only the remaining three months of the federal government's tenure.

    "This is a historic moment for the parliament that the 6th budget is being presented. A government cannot run for a day without the budget. The provincial government's cannot decide their budgets without approval of the federal budget," Ismail explained.

    "We cannot interrupt the 5.8 per cent GDP growth. However the next government will have the right to make changes to the budget," he assured the opposition.

    "Today's budget is a reflection of Nawaz Sharif's vision. We are missing him here today."

    "In 2013 the PML-N government came to power and set up a programme for the economy. We faced certain challenges under the leadership of Nawaz Sharif. Serving the public was our only motivation," he added.

    During Ismail's address, members of the opposition continued their protests through uninterrupted chanting. They surrounded his dias and threw papers in the air. Opposition members ripped apart copies of the budget while PML-N members encircled Ismail's dias to keep the protesters at a distance.

    The budget speech began with the finance minister recounting the government's new tax package, through which it has lowered tax rates considerably.

    Ismail said the government is using data mining and other technologies to catch tax thieves.

    "We have given people one last chance to declare their domestic assets. We will catch them and prosecute them if they do not avail our tax amnesty package," he asserted.

    "Due to high economic growth in the last five years, the size of the economy has increased unusually. It has risen from Rs22,385 billion in 2013 to Rs34,396 billion in 2018. The per capita income during this time has risen from Rs129,005 to Rs180,204," Ismail announced.

    Budget 2018-2019

    The target GDP growth rate for the upcoming fiscal year has been set at 6.2pc against FY17-18's target of 6pc.

    Agricultural production is slated to increase, Ismail said, with the government intending to continue implementing an agricultural policy in FY18-19 "until we end the tradition of subsidies".

    Loans to the agriculture sector will increase to Rs1,100bn, he said.

    The government intends to restrict inflation to below 6pc, he said.

    "The objective of the medium term macroeconomic policy, besides improved economic growth, is to correct the balance in the external account," Ismail said. "The fiscal deficit will be reduced in the next three years and the environment for investment will be improved."

    "The following budget strategy will be used to achieve these targets," he added.

    "The tax target for the Federal Board of Revenue (FBR) has been fixed at Rs4,435bn. This target will be achieved through improved tax steps and improved tax administration. The tax base is being expanded and the per cent of tax is being reduced," Ismail said.

    "The government will continue investment in social protection and the Benazir Income Support Programme, and will take steps for the underprivileged communities through targeted subsidy schemes. Rs125bn has been allocated to the BISP, while Rs189bn has been set aside for total subsidies. Rs10bn has been proposed for PM's Youth Scheme," he said.

    The finance minister estimated forex reserves to come to about $15bn in FY18-19, with the steps of the social safety net to continue.

    The target tax to GDP ratio is 13.8pc, the target budget deficit 4.9pc and the target net public debt to GDP ratio 63.2pc, he announced.

    In the aftermath of the 7th NFC, the provinces have been issued an extra Rs2,500bn in eight years, and the federal government will have a reduced share in the NFC, he said.

    Karachi package

    The government announced a Rs25bn special package for development in Karachi.

    A large-scale desalination plant will be set up in Karachi to end the city's water woes, Ismail said.

    Rs5bn will be allocated for the construction of roads, fire brigades and bridges in the coming fiscal year. Rs8bn will be set aside for expansion of the Expo Centre, he added.

    Packages for children

    A special package called the 100,100,100 programme focusing on children's development was announced by Ismail. Under the package, the government is targeting 100pc admission, attendance and graduation of children in schools.

    The government will pay for the transportation of female students to school, he added.

    "This is a promise made by the Parliament to the people of Pakistan. We have failed for the past 70 years, but it will not happen anymore, although education is a provincial subject," Ismail asserted.

    Another special package amounting to Rs10bn ─ along with a supplementary grant ─ was announced for children's health. "40pc of children experience stunted growth," the finance minister said. "It will be tolerated no more," he said, adding that stunting would end by 2020. "This is the prime minister's promise."

    Review of PML-N's performance

    "Today we are the 24th largest economy in the world," Ismail told the lower house.

    "The GDP growth rate was 5.4pc last year ─ it has now grown to 5.8pc, the highest in 13 years," he recalled.

    "In the last five years, inflation has been kept below 5pc which was up to 12pc when we took over. The budget deficit will remain restricted to 5pc this year," he said.

    "The State Bank policy rate was 5.7pc which was the lowest in decades, coming down from over 9pc. The lowest interest rate in history has brought an increase in businesses" he explained.

    "Exports have been under pressure... Imports have increased 17pc because of high machinery imports," he said, adding that the current account deficit had increased Rs12bn in the first nine months of FY17-18.

    "The government has made all efforts, and I am sure that foreign exchange reserves will be higher in June than they are today. In the ongoing year, foreign investment has risen from $1.9bn to $2.1bn."

    Opposition's reservations
    The opposition wants the government to present a budget only for one quarter, saying that the rulers cannot snatch the right of deciding a budget from the next government expected to come into power in August, after the general elections.

    "I understand the pain for democracy and Constitution," said Prime Minister Shahid Khaqan Abbasi while addressing the Parliament. "We want to present the budget for continuity of the system. Whichever party comes can change the budget."

    Addressing the opposition's reservation about Miftah Ismail, the newly appointed finance minister, presenting the budget, he said: "It is the cabinet's decisions and nothing unconstitutional about this."

    'No right to present full-term budget'

    At the outset of the session, Opposition Leader in the National Assembly Syed Khursheed Shah protested against the outgoing PML-N presenting a full-term budget instead for the remaining three months of its tenure.

    [​IMG]
    Opposition Leader in the National Assembly Syed Khursheed Shah speaks in National Assembly on Friday. — DawnNewsTV


    "Unfortunately, the government is snatching the right of the next assembly with today's budget," said Shah. "My wish is that whichever party wins the elections, has the right to present the budget."

    "This government has no ethical right to present the budget for the entire year."

    "This mandate is given when a person comes into Parliament after being elected," he continued. "What pains me is that Nawaz Sharif champions the narrative 'vote ko izzat do' [respect the vote], yet you [PML-N] are destroying the honour of vote."

    "You had an elected minister, Rana Afzal, but you brought in a person with no mandate through wrong interpretation of the Constitution," said Shah referring to the appointment of Miftah Ismail as the finance minister on Friday morning.

    "I always say respect the Parliament and make it supreme; but once again, you are making decisions outside the Parliament. This is the first time an un-elected person is presenting the budget."

    "Could PM Abbasi not have presented the budget? Even the chief minister has presented budget in the past," pointed out Shah.

    Shah Mehmood Qureshi of Pakistan Tehreek-i-Insaf (PTI) shared the same sentiments as Shah, saying: "Instead of an elected minister, you [PML-N] are giving the mandate to present the budget to an un-elected person."

    "A new tradition is being set," he alleged. "The leader of the opposition has said there is no moral justification for the government to present the full-year budget."

    He highlighted that the budget being presented had not been endorsed by the National Economic Council (NEC). "Three CMs — of Sindh, KP and Balochistan — walked out from the meeting. What kind of democracy and government is this where three provinces are strongly expressing their distrust of the Public Sector Development Programme (PSDP), yet you want to endorse it."

    Speaker Ayaz Sadiq urged the opposition leaders to keep their statements short so that the "group picture of MNAs" could be taken while there was still light.
     
  2. ghazi52

    ghazi52 ELITE MEMBER

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    Budget 2018-19:
    Historic high of Rs1.03tr allocated for PSDP



    ISLAMABAD: The federal government has unveiled a Rs1.03-trillion Public Sector Development Programme (PSDP) for the next fiscal year with 62% proposed to be spent on infrastructure including allocations for projects under the China-Pakistan Economic Corridor (CPEC).

    The proposed PSDP for fiscal year 2018-19 is Rs29 billion or 2.9% higher than the outgoing fiscal year’s original development outlay. The PSDP includes Rs100 billion in block allocations for the next government.

    About 17.4% of the PSDP will be funded by taking Rs180.3 billion worth of foreign loans in the next fiscal year.

    Textile sector top priority in budget

    The infrastructure sector has been allotted Rs575 billion or 62% of the proposed budget, social sector has been allotted Rs135 billion or 14%, science and technology has been allotted Rs12 billion or 1%. Special areas have been given Rs72 billion or 8% of the proposed PSDP.

    Out of Rs1.03 trillion, the share of Planning Ministry-administered PSDP will be Rs 825 billion, down from outgoing fiscal year’s level of Rs 866 billion.
    Total allocations for federal ministries are estimated at Rs 450.3 billion as against Rs 377.8 billion in the outgoing fiscal year. The federal ministries allocations are about 43.6% of the total proposed PSDP. The corporations have been given Rs 346.2 billion, Rs 34.4 billion or 9% less than the outgoing fiscal year.

    The infrastructure sector has been given Rs575 billion or 62% as against 67% of the total development allocated for the outgoing fiscal year. The National Highway Authority will get Rs310 billion as against Rs319 billion in the outgoing fiscal year. Pakistan Railways will get Rs39.4 billion in the next fiscal year as against Rs43 billion in the outgoing fiscal year.

    The energy sector, mainly the National Transmission and Dispatch Company and Pakistan Electric Power Company, has been given Rs36.2 billion, down from outgoing fiscal year’s level of Rs61 billion.

    An amount of Rs105 billion has been proposed for Finance Ministry administered PSDP. This includes Rs90 billion for security enhancement and relief for Temporarily Displaced Persons affected by Operation Zarb-e-Azb. However, the nature of this spending falls under the current expenditures but the government has clubbed it with development, which has diverted significant portion of the budget for non-development activities

    The Ministry of National Health Services, Regulations and Coordination has seen major cut in its allocation. As against Rs48.7 billion, the government has proposed only Rs25 billion for next fiscal year. The Kashmir Affairs & Gilgit Baltistan Division will get Rs51.2 billion in the next fiscal year as against Rs43.6 billion in the outgoing fiscal year.

    Higher Education Commission’s development budget has been enhanced to Rs46.7 billion as against Rs35.7 billion in the outgoing fiscal year. Housing and Works Ministry will get Rs5.4 billion as against Rs10.4 billion in the outgoing fiscal year.

    The Planning Ministry will get Rs27.5 billion as against 16.8 billion budget in the outgoing fiscal year. The Water Resources Division will get Rs79.5 billion in the new fiscal year as against its Rs36.5 billion in the outgoing fiscal year.

    The government has abolished the PM’s Energy for All and Clean Drinking Water initiatives.

    For PM’s Global SDG’s Goals, an amount of Rs5 billion has been proposed as against Rs30 billion in the outgoing fiscal year. This money is being spent on the recommendations of parliamentarians.

    The Special Federal Development Programme has also been abolished. In the outgoing fiscal year, Rs40 billion had been allocated under this head which were spent on the PM’s Directives.

    The Interior Division has been given Rs24.2 billion as against Rs15.7 billion. The Pakistan Atomic Energy Commission has been given Rs30.4 billion as against Rs15 billion in the outgoing fiscal year. The Ministry of States & Frontier Regions would get Rs28.2 billion as against Rs26.9 billion in the outgoing fiscal year.

    An amount of Rs10 billion has been given for the first time for the FATA Development Plan.

    For construction of the Sukkur-Multan section of CPEC’s eastern route, Rs30.8 billion has been proposed against the remaining requirement of Rs121.9 billion. The total cost of the project is Rs298 billion.

    For the construction of Hakla-Yarik-Dera Ismail Khan motorway of CPEC’s western route, the Planning Commission has proposed Rs25 billion for the next fiscal year as against Rs38 billion for outgoing fiscal year. The total cost of this scheme is Rs110.2 billion.

    For land acquisition of the Sukkur-Hyderabad section of CPEC Rs10 billion have been proposed for the next fiscal year as against the requirement of Rs22 billion. For land acquisition of Islamabad Raikot section for CPEC Rs1.5 billion have been proposed.

    For construction of the Eastbay road project of Gwadar Rs6 billion have been proposed for the next fiscal year. For Pak-China technical and vocational centre Rs625 million have been proposed.
     
  3. ghazi52

    ghazi52 ELITE MEMBER

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    Budget 2018-19: K-P seeks 10-year tax break for its energy companies

    ISLAMABAD: The government of Khyber-Pakhtunkhwa (K-P) has asked the federal government to exempt provincial oil and gas holding companies from income tax payment for 10 years and allow provinces to impose excise duty on crude oil production in their territories in the upcoming budget for 2018-19.

    “Provincial holding companies, incorporated after the petroleum policy of 2012, can play a pivotal role in bringing rapid economic stability and energy security in the country through fast-tracked exploration and production of oil and gas reserves,” said the K-P administration in a letter to the central government.

    “Provincial governments have very rightly pleaded the federal government to strengthen all the provincial holding companies.”
     
  4. AZADPAKISTAN2009

    AZADPAKISTAN2009 ELITE MEMBER

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    ? 6th budget

    Budget is made by new government

    Supreme court needs to halt this bogus budget
     
    Last edited: Apr 28, 2018