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Ishaq Dar eyes 7pc growth by tenure end
Dawn.com | Irfan Haider — Updated 18 minutes ago
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ISLAMABAD: The federal cabinet on Friday approved the budget for the fiscal year 2015-16 (FY2015-16), with a total outlay of Rs4.313 trillion, which is 9.1 per cent higher than the revised 2014-15 outlay of Rs3.9 trillion.
Finance Minister Ishaq Dar while presenting the budget for fiscal year 2015-16 on the floor of the National Assembly said a growth rate target of 5.5pc had been set for the upcoming year, which he said is budgeted to reach 7pc by the end of PML-N government's tenure in 2017-18
Before announcing the budget, the minister briefed the cabinet about the salient features of the budget and said measures have been proposed which may enhance exports, industrial growth, and employment.
Meanwhile opposition in the National Assembly decided not to create any uproar during the budget speech.
"We will listen to the budget speech and will not create any problem," Khursheed Shah told reporters in Parliament.
Budget 2015: Between push and pull
5.5% targeted growth for 2015-16
This year the government is promising to continue walking down the path of stabilisation while moving towards stimulating growth in the economy.
Dar is also promising to hike the growth rate to 5.5 per cent, more than a percentage point increase over the current financial year’s accomplishment.
Prime Minister Nawaz Sharif last week had cautioned his economic team against setting unrealistic targets for the next financial year, 2015-16 when he chaired a budget strategy meeting for the upcoming financial year.
A day earlier, Dar presented the Pakistan Economic Survey (PES) which charts the country's economic progress each year. The story told by the survey was also a humbling one for the minister who prides himself on his business credentials. All targets – from growth to revenues – were missed.
Main elements of budget strategy
The main elements of the budget strategy are as follows:
In order to achieve target growth of 5.5%, sector contributions in the upcoming fiscal year has been projected at as follows: agriculture 3.9pc, manufacturing sector growth has been budgeted at 6.1pc, and services sector growth at 5.7pc.
Dar says the overall growth rate has been budgeted at 7% by 2017-18.
Growth rate target missed for 2014-15
Ishaq Dar lays out reasons for missing the growth target in 2014-15— which include floods in September 2014 and political protests from August to December 2014.
The minister says fiscal deficit target of 5% for the year 2014-15 will be met by June 30, 2015.
Highlighting his government's achievement in significantly bringing down inflation, Dar also brought to notice the historically low interest rate in recent months.
Ishaq Dar speaking on the assembly floor.- DawnNews screengrab
Exports fall in 2014-15
Dar said in the first 10 months of the ongoing fiscal year, exports fell 3.2% from $20.89 bn despite volume being higher.
Special security funds for Chinese workers
According to a ‘Budget in Brief’ document available with DawnNews, Rs3.5 billion have been allocated for special security forces to protect Chinese engineers, project directors, experts and workers employed on various Chinese funded projects across Pakistan for 2015-16.
KSE rises
The Karachi Stock Exchange rose 70% to 34,000 level from Jun 2013, says Dar.
Fiscal deficit target 2015-16
For the upcoming year, the finance minister says fiscal deficit target has been set at 4.3%, significantly down from last year's budgeted 5%.
Dar says the improvement in fiscal deficit over the year is the result of improved tax collection that resulted in higher revenue in addition to disciplined expenditure. He says tax collection increased 3 per cent in the past 11 months.
BISP
Dar says funds allocated to the Benazir Income Support Programme have increased to $102 billion for the upcoming year. He says 5 million families will be covered under the BISP.
Tax-to-GDP
The finance minister says tax collection target as a percentage of GDP to be increased to 13.5pc by the end of fiscal year 2015-16.
Foreign exchange reserves
Dar says foreign exchange reserves had surged to $17 billion which will further grow to $19 billion during the next financial year (2015-16).
Scholarships for rural students
The government has allocated Rs125mn for scholarships to rural students for 2015-16.
PSDP allocation 2015-16
The government has allocated Rs700bn for annual federal development programmes and Rs814bn for provinces, which translates into a total outlay of Rs1,514bn.
Dar says Rs3bn has been allocated for an international airport in Gwadar.
The government has allocate Rs100bn to Special Development Programme funds in order to enhance existing security apparatus, rehabilitate affected areas and resettle temporarily displaced persons.
WAPDA
Dar says Rs112.28bn have been allocated for the Water and Power Development Authority for fiscal year 2015-16.
Defence expenditure for 2015-16 to rise 11pc
Dar says Rs781bn have been allocated for expenditure on defence, which is 11pc higher than last year's allocation, with Rs39.415bn budgeted expenditure on civil armed forces for the next fiscal year.
Railways budget 2015-16
A total of Rs78bn has been budgeted for Pakistan Railways, of which Rs41bn has been allocated for development programmes and Rs37bn for employees.
Electricity and power projects
For 2015-16, Rs141.42bn has been allocated for electricity and power projects, announces Ishaq Dar.
Budget for CPEC routes
Dar announces Rs10bn for Islamabad and DI Khan route of the China-Pak Economic Corridor (CPEC), and Rs19.5bn for the Raikot-Islamabad stretch of the CPEC.
Loans for solar tubewells
Dar says loans will be given out for solar-powered tubewells on low markups, and will significantly reduce costs for farmers who have to run tubewells on diesel-powered generators.
Funds for HEC 2015-16
Dar says Rs20.5bn has been allocated for the completion of 143 Higher Education Commission projects targeting development of Pakistani universities.
In addition, Rs51bn is allocated to the HEC, bringing combined allocation to Rs71.5bn
Sales tax and federal excise duty
Increase in tax on cigarettes
Rates of federal excise duty (FED) on cigarettes are proposed 58pc to 63pc. For making informal sector pay due taxes on cigarettes, adjustable FED is proposed to be levied on filter rods at Rs0.75 rupees per filter rod.
Tax on imported mobile phones upped
Sales tax applicable on various categories of imported mobile phones is proposed to be increased from Rs150, Rs250 and Rs500 to Rs300, Rs500 and Rs1,000, respectively. On the implementation of new rates, regulatory duty imposed on import of mobile phones will be withdrawn.
Support for widows of men killed in suicide attacks
The government has decided that loan, including a markup to Rs1 million as on June 30, 2015, obtained by the deceased husband in his own name will be borne by the government.
This is applicable to a woman who has not remarried after the death of the victim.
Minimum wage increased
Dar announced that minimum wage has been increased for Rs12,000 per month to Rs13,000.
Ishaq Dar eyes 7pc growth by tenure end - Pakistan - DAWN.COM
Dawn.com | Irfan Haider — Updated 18 minutes ago
34 Comments
PrintISLAMABAD: The federal cabinet on Friday approved the budget for the fiscal year 2015-16 (FY2015-16), with a total outlay of Rs4.313 trillion, which is 9.1 per cent higher than the revised 2014-15 outlay of Rs3.9 trillion.
Finance Minister Ishaq Dar while presenting the budget for fiscal year 2015-16 on the floor of the National Assembly said a growth rate target of 5.5pc had been set for the upcoming year, which he said is budgeted to reach 7pc by the end of PML-N government's tenure in 2017-18
Before announcing the budget, the minister briefed the cabinet about the salient features of the budget and said measures have been proposed which may enhance exports, industrial growth, and employment.
Meanwhile opposition in the National Assembly decided not to create any uproar during the budget speech.
"We will listen to the budget speech and will not create any problem," Khursheed Shah told reporters in Parliament.
Budget 2015: Between push and pull
5.5% targeted growth for 2015-16
This year the government is promising to continue walking down the path of stabilisation while moving towards stimulating growth in the economy.
Dar is also promising to hike the growth rate to 5.5 per cent, more than a percentage point increase over the current financial year’s accomplishment.
Prime Minister Nawaz Sharif last week had cautioned his economic team against setting unrealistic targets for the next financial year, 2015-16 when he chaired a budget strategy meeting for the upcoming financial year.
A day earlier, Dar presented the Pakistan Economic Survey (PES) which charts the country's economic progress each year. The story told by the survey was also a humbling one for the minister who prides himself on his business credentials. All targets – from growth to revenues – were missed.
Main elements of budget strategy
The main elements of the budget strategy are as follows:
- Reduction of fiscal deficit: Dar says the government will continue to consolidate gains it made in reducing fiscal deficit. In 2015-16 he is targeting fiscal deficit at 4.3% of GDP compared to 5% in 2014-15.
- Raising Tax Revenues: The minister says that the proposed reduction
in deficit will be achieved through a combination of better tax
collection and tight expenditure controls.
- Continued Focus on Energy: Energy is a key government priority, which Dar says can be judged by the fact that the prime minister is
devoting considerable time to oversee developments in the sector. A
Cabinet Committee on Energy has been constituted which is headed by
the Prime Minister himself.
- Keeping in view the current gap in demand-supply of power in the face of GDP target, the government plans to bring 7,000 MW on stream
besides setting up 3,600 MW LNG-based projects. By December 2016 the government aims to bring 10,600 MW in the system. Beyond December
2017, other projects such as Dasu, Diamer Bhashah, Karachi Civil
Nuclear Energy and many other projects will also be completed.
- Exports Promotion: The government announces additional measures to incentivise exports and taking other measures to ease the cost of doing business and improving the overall regulatory regime to facilitate exporters.
- Investment to GDP Ratio: The investment-to-GDP ratio, which was registered at 12.4% during 2012-2013, improved to 13.4% during 2013-14 and is provisionally estimated at 13.5% for the current fiscal year. The combined effect of increased public sector investments has also played a role in reversing the declining trend. Government projects this ratio to rise to 16.5% during 2015-16.
- Public debt Management: Debt Management has received special attention in our overall efforts for fiscal management. The fiscal consolidation we have achieved has paved the way for a reduction in public debt, which fell from 63.9% in 2012-13 to a now projected level of 62.9% at the close of current fiscal year. In the next three years, Debt-to-GDP ratio will be brought down to less than 60% in accordance with the provisions of the Fiscal Responsibility and Debt Limitation (FRDL) Act, 2005.
In order to achieve target growth of 5.5%, sector contributions in the upcoming fiscal year has been projected at as follows: agriculture 3.9pc, manufacturing sector growth has been budgeted at 6.1pc, and services sector growth at 5.7pc.
Dar says the overall growth rate has been budgeted at 7% by 2017-18.
Growth rate target missed for 2014-15
Ishaq Dar lays out reasons for missing the growth target in 2014-15— which include floods in September 2014 and political protests from August to December 2014.
The minister says fiscal deficit target of 5% for the year 2014-15 will be met by June 30, 2015.
Highlighting his government's achievement in significantly bringing down inflation, Dar also brought to notice the historically low interest rate in recent months.
Ishaq Dar speaking on the assembly floor.- DawnNews screengrab
Exports fall in 2014-15
Dar said in the first 10 months of the ongoing fiscal year, exports fell 3.2% from $20.89 bn despite volume being higher.
Special security funds for Chinese workers
According to a ‘Budget in Brief’ document available with DawnNews, Rs3.5 billion have been allocated for special security forces to protect Chinese engineers, project directors, experts and workers employed on various Chinese funded projects across Pakistan for 2015-16.
KSE rises
The Karachi Stock Exchange rose 70% to 34,000 level from Jun 2013, says Dar.
Fiscal deficit target 2015-16
For the upcoming year, the finance minister says fiscal deficit target has been set at 4.3%, significantly down from last year's budgeted 5%.
Dar says the improvement in fiscal deficit over the year is the result of improved tax collection that resulted in higher revenue in addition to disciplined expenditure. He says tax collection increased 3 per cent in the past 11 months.
BISP
Dar says funds allocated to the Benazir Income Support Programme have increased to $102 billion for the upcoming year. He says 5 million families will be covered under the BISP.
Tax-to-GDP
The finance minister says tax collection target as a percentage of GDP to be increased to 13.5pc by the end of fiscal year 2015-16.
Foreign exchange reserves
Dar says foreign exchange reserves had surged to $17 billion which will further grow to $19 billion during the next financial year (2015-16).
Scholarships for rural students
The government has allocated Rs125mn for scholarships to rural students for 2015-16.
PSDP allocation 2015-16
The government has allocated Rs700bn for annual federal development programmes and Rs814bn for provinces, which translates into a total outlay of Rs1,514bn.
Dar says Rs3bn has been allocated for an international airport in Gwadar.
The government has allocate Rs100bn to Special Development Programme funds in order to enhance existing security apparatus, rehabilitate affected areas and resettle temporarily displaced persons.
WAPDA
Dar says Rs112.28bn have been allocated for the Water and Power Development Authority for fiscal year 2015-16.
Defence expenditure for 2015-16 to rise 11pc
Dar says Rs781bn have been allocated for expenditure on defence, which is 11pc higher than last year's allocation, with Rs39.415bn budgeted expenditure on civil armed forces for the next fiscal year.
Railways budget 2015-16
A total of Rs78bn has been budgeted for Pakistan Railways, of which Rs41bn has been allocated for development programmes and Rs37bn for employees.
Electricity and power projects
For 2015-16, Rs141.42bn has been allocated for electricity and power projects, announces Ishaq Dar.
Budget for CPEC routes
Dar announces Rs10bn for Islamabad and DI Khan route of the China-Pak Economic Corridor (CPEC), and Rs19.5bn for the Raikot-Islamabad stretch of the CPEC.
Loans for solar tubewells
Dar says loans will be given out for solar-powered tubewells on low markups, and will significantly reduce costs for farmers who have to run tubewells on diesel-powered generators.
Funds for HEC 2015-16
Dar says Rs20.5bn has been allocated for the completion of 143 Higher Education Commission projects targeting development of Pakistani universities.
In addition, Rs51bn is allocated to the HEC, bringing combined allocation to Rs71.5bn
Sales tax and federal excise duty
Increase in tax on cigarettes
Rates of federal excise duty (FED) on cigarettes are proposed 58pc to 63pc. For making informal sector pay due taxes on cigarettes, adjustable FED is proposed to be levied on filter rods at Rs0.75 rupees per filter rod.
Tax on imported mobile phones upped
Sales tax applicable on various categories of imported mobile phones is proposed to be increased from Rs150, Rs250 and Rs500 to Rs300, Rs500 and Rs1,000, respectively. On the implementation of new rates, regulatory duty imposed on import of mobile phones will be withdrawn.
Support for widows of men killed in suicide attacks
The government has decided that loan, including a markup to Rs1 million as on June 30, 2015, obtained by the deceased husband in his own name will be borne by the government.
This is applicable to a woman who has not remarried after the death of the victim.
Minimum wage increased
Dar announced that minimum wage has been increased for Rs12,000 per month to Rs13,000.
Ishaq Dar eyes 7pc growth by tenure end - Pakistan - DAWN.COM
