Pakistan’s new budget is targeting a 16% rise in tax revenues, Finance Minister Ishaq Dar said unveiling the budget
ISLAMABAD – Finance Minister Ishaq Dar has unveiled a budget with a total outlay of Rs 4.4 trillion for the fiscal year 2016-17. Dar said Pakistan would target a fiscal deficit of 3.8 percent of gross domestic product for the coming financial year, down from the 4.3 percent envisaged for this year.
Pakistan’s new budget is targeting a 16% rise in tax revenues. Pakistan’s financial year runs from July to June.
According to the minister, the government has protected national economy from global fluctuations. He also underlined that poverty rate had declined to 28.4pc.
The federal government unveiled Rs800 billion development budget, an amount that is Rs100 billion higher than last year but still comes across as less given the huge financing requirements of about 866 projects including the pressing needs of the China Pakistan Economic Corridor (CPEC).
Economic growth in the past two years has increased by 4.7per cent, hitting an eight-year high. “This would have been better if the cotton crop hadn’t suffered a fall in growth of 28per cent,” finance minister said.
The Agriculture sector will be provided loans worth Rs. 700 billion in Budge 2016-17. The PM has announced a Rs341-billion Kisan package in September 2015 to help farmers who suffered due to floods. Beginning from July 1, off-peak tariff for agriculture tubewells will go down from Rs8.85 per unit to Rs5,35 per unit. The government will bear a burden of Rs27 billion due to this measure.
There is an 11 per cent increase in the country’s defense budget next year. The defense budget has been increased from existing 776 billion rupees to 860 billion rupees for the next year, showing an increase of about eleven percent.
Minimum wage has been increased to Rs 14,000, indicating an Rs 1,000 increase from the previous year. Last year, the amount was hiked up from Rs 12,000 to Rs 13,000.
Rs. 22.4 billion have been set aside for Health in the budget for FY 2016-17, compared to Rs. 11 billion allocated for health sector expenditures in the previous fiscal year.
Announcing the budget for the education sector, Dar said, Rs21.5 billion has been set aside for the Higher Education Commission projects. Over Rs79.5b has been set for higher education only, said Dar, adding, this is 11% higher than last year and highest ever in Pakistan’s history.
Telecom sector investment has been allocated Rs. 11.4 billion for Fiscal Year 2016-17.
Government salaries, pensions:
The government increased the basic salary for federal government employees by 10%. Pensioners older than 85 years will see a 25 per cent increase in compensation. The salary for Grade 1-15 employees of the Federal Government has been increased by 50%, whereas the pension for Federal Government employees has been raised by 10% in the FY 2016/17 budget. Those over the age of 85 will, on the other hand, receive an increase of 25% to their current pension.
Fiscal deficit has been proposed to be restricted at 4.3pc for the next fiscal year of the GDP. Dar said the oil import bill goes down by 40pc due to lower oil prices.
Concession of customs duty:
Concession of customs duty for dairy, livestock and poultry sectors as well as fish farming announced in the budget speech. The existing seven percent sale tax on pesticides is proposed to be abolished.