By News Desk
ISLAMABAD: A day after claiming ‘V-shaped’ economic recovery, the Pakistan Tehrik-e-Insaf (PTI)-led government on Friday unveiled Rs 8.4 trillion federal budget for the fiscal year 2021-22, with focus on pursuing “all-inclusive, sustained and robust economic growth”.
Presenting the budgetary proposals in the National Assembly amid jeers and sloganeering from Opposition benches, Minister for Finance and Revenue Shaukat Tarin said the government steered the economy out of crisis and put it on the growth trajectory by pursuing prudent policies under the dynamic leadership of Prime Minister Imran Khan. Opposition lawmakers taunted the minister by laughing as he praised Prime Minister Khan’s economic initiatives.
Tarin said the country was now out of danger as the government took initiatives for its economic sustainability, pointing to 3.94pc GDP growth rate during the current fiscal year. He said the current account was now $800 million in surplus, as compared to deficit of $20 billion at the end of last government. He said previous governments manipulated exchange rate, which adversely affected the economy, resulting into depletion of foreign reserves to $10 billion. However, they increased the reserves by taking loans, which were now being repaid by the incumbent government, he added.
Tarin said the government had successfully fulfilled all the international commitments, besides putting the economy on growth trajectory. The minister said one of the top priorities of incumbent government was to uplift the downtrodden segments. For the purpose, he said 40 per cent of the total population was given cash transfers, besides providing relief to 15 million households across the country.
The minister announced the total budget outlay had been kept at Rs8,478 billion, with the tax collection target set at Rs5,829 billion. About various allocations, he said Rs900 billion had been set aside for the federal Public Sector Development Programme (PSDP); Rs480 billion for pensions of both civilians and retired military officials; Rs1,370 billion for defence, while Rs1,168 had been earmarked for development and non-development grants for provinces. The federal government employees would get 10 per cent ad hoc relief in their salaries and pensions.
He further said the government had allocated Rs682 billion for subsidies to various sectors of the economy, adding Rs479bn had been allocated to run the civil government. Tarin said the government was serious in stemming the spread of coronavirus and keeping its adverse effects at bay. For the purpose, he said the government had set aside Rs100 billion.
Tarin said a mountain of circular debt amounting to Rs1 trillion was inherited by the incumbent government due to the botched policies of its predecessor. “We made the [capacity] payments otherwise the country would have defaulted,” he explained.
The minister said Prime Minister Khan’s government did not hesitate from taking difficult decisions, as it turned around the current account deficit into a surplus in 2021 through its sound economic policies. As he spoke, Opposition members continued to bang desks and shouted slogans of “Go Niazi Go!”
Tarin announced the government had set aside Rs260 billion for Ehsaas programme, as he lauded government’s steps to deal with coronavirus pandemic. “The government, through the Ehsaas Emergency Cash Programme, provided cash to 12 million people across the country,” he added.
He said remittances had increased in Pakistan to record levels, adding these were expected to rise to $29 billion by the end of the current month. Tarin said the economy had grown and as a result, more people had secured jobs over the years. He said despite the coronavirus pandemic, the per capita income of the common man had increased by 15 per cent.
Speaking about tax collection, he said it had grown by 18 per cent and had crossed Rs4,000 billion, adding critics had no response to the government’s impressive performance in that regard. The minister announced the country’s economy was now entering the growth period, adding almost every sector was growing.
Tarin said Pakistan had become a food deficient nation, thanks to the policies of the previous governments. “We will have to become a food sufficient nation and for this, we will have to provide lots of incentives to farmers,” he said.
“We will need to bring back administrative controls which were removed during the Musharraf era,” he added.
Tarin said the government had kept the growth target at 4.8 per cent for the fiscal year, adding the government would not leave the poor and the destitute at the mercy of inflation. He said the government had decided to provide interest-free loans of up to Rs500,000 to the poor.
About the importance of boosting exports, the minister said the government was focused on the creation of economic zones to facilitate industries, create jobs and boost exports. He announced Pakistan had introduced mortgage financing for the first time ever, adding the passing of the foreclosure law had enabled banks to start lending to people. He said the PSDP would be increased from Rs630 billion to over Rs900 billion to counter the adverse impact of the coronavirus pandemic. The minister was interrupted by Speaker Asad Qaiser as he urged Opposition lawmakers to observe silence.
Tarin announced a development package for 14 districts in Sindh, adding those would focus on improving education, solving the province’s water issues and carrying out development in those districts.
The minister announced the government had slashed sales tax on locally manufactured cars from 17 per cent to 12.5 per cent. The government had also exempted Federal Excise Duty (FED) on 850cc cars and would slash duty on electric cars.
He announced the government’s initiative to earmark $1.1 billion to procure coronavirus vaccines, adding the government aimed to vaccinate 100 million people by July 2022. Tarin said the government was introducing third-party audits which would thwart the FBR harassing any individual or business entity. He said those who were found guilty of evading taxes or deliberately hiding their income would be fined severely. “The rich will be asked to pay taxes in accordance with their wealth,” he said, adding the salaried class would not be burdened with additional taxes. The minister said the track-and-trace systems would be strengthened so that undocumented trade did not flourish in the country.
The minister said the government was slashing withholding taxes on mobile phones, adding it would be reduced to 10 per cent at first and then 8 per cent.
He said the government was intent on eliminating the menace of corruption, adding Pakistan Customs was focused on curbing sale of illegal trade. “The western borders of the country and the coastal strips should be made safe so that these practices end,” he said. The National Assembly session was adjourned to meet again on Monday at 4pm.