ISLAMABAD: The Federal Budget for Fiscal Year (FY) 2021-22 with a total outlay of Rs8,487-billion has been announced.
Presenting the budgetary proposals for the next fiscal year in the National Assembly on Friday, Minister for Finance Shaukat Tarin said the budget focuses on Prime Minister Imran Khan’s vision of a strong and sustainable growth driven Kamyab Pakistan.
He said the main objectives of the budget are to strike a balance between fiscal deficits due to COVID-19 and boosting growth of economy besides keeping a primary balance at a sustainable level. He said the gross revenues for the next fiscal year have been estimated at 7909 billion rupees compared to revised estimate of 6395 billion rupees for the outgoing fiscal year.
This, he said, shows a handsome growth of 24 percent in gross revenues. He said the FBR revenues are projected to grow by 24 percent from 4691 billion rupees to 5829 billion rupees. Non-tax revenues are projected to grow by 22 percent.
The Finance Minister said the provincial share in federal taxes would increase from 2704 billion rupees last year to 3411 billion rupees. This means an additional 707 billion rupees or 25 percent increase.
He said this should enable the provinces to spend resources on development and critical social sectors like health, education, population welfare, youth, women development, sports and labour welfare.
He said, after provincial transfers, the net federal revenues are estimated at 4497 billion rupees compared to 3691 billion rupees under the revised estimate for last year. This shows a growth of about 22 percent.
The overall deficit for 2021-22 is estimated at 6.3 percent as opposed to the revised estimate of 7.1 percent for current fiscal year. Primary deficit is targeted at 0.7 percent. Despite COVID-19, the government has continued on the path of reduction of primary deficit, which he said is a great achievement.
Shaukat Tarin said the federal development spending are being increased from 630 billion rupees to 900 billion rupees, which is an increase of around 40 percent. He said it is imperative that government expenditures are minimized and their utility is ensured. Therefore, he said, we will continue to be austere throughout the government.
He said subsidies are projected at 682 billion rupees up from 430 billion rupees. These mostly comprise due payments of Independent Power Producers, tariff differential subsidies and concessions on food. He said Prime Minister Imran Khan wants to change the course of the history by uplifting four to six million low income households through bottom-up approach from next year.
He said every household will be provided 500,000 rupees interest free business loans. Every farming household will be given 2050,000 rupees interest free farming loan and 200,000 rupees for tractors and machineries. These families will be provided with low interest housing loans up to two million rupees so that they can build their houses.
Every household shall be provided with a Sehat Card and one percent from every household will be provided free technical training. Through this action we are giving a comprehensive package to the low-income group people; slogan of which was raised by many leaders in the past but nothing was delivered.
He said this is an essential requirement of Imran Khan’s promise of Riasat-e-Madina. He said the major initiative of the government for social protection and poverty alleviation is the Ehsaas Programme.
The Finance Minister said, for this program, 260 billion rupees are being proposed in the next budget, which is by far the largest allocation and reflects the vision of the Prime Minister to help the extreme poor segments of the society.
He announced the grant of ten percent adhoc relief allowance for all the federal government employees and ten percent increase in pensions with effect from next month. The orderly allowance has been enhanced from 14,000 rupees to 17,500.
The integrated allowance for employees in basic pay scale one to five has been doubled from 450 rupees to 900 rupees. Shaukat Tarin said the minimum wage is proposed to be increased to twenty thousand rupees to mitigate the inflationary pressures on the low income groups.
The Finance Minister said the government has fixed 4.8 percent growth target for the next financial year, which would be broad based as it would encompass all the key sectors of the economy. He said we intend to undertake a series of measures to achieve six to seven percent growth over the next two to three years.
He said an agricultural transformational plan has been devised to increase productivity. Under this plan, support will be provided from water to seeds, fertilizer, agri-credit, tractors and machinery, commodity warehousing, cold storage and food processing industry.
He said we are investing in establishment of Special Economic Zones, supporting new exports in IT sector and agro-based industries to increase our exports. He said we are endeavoring to make CPEC a platform where industries will be relocated.
This, he said, will provide employment opportunities and bolster our exports. In addition, we will expend earnest efforts in promoting Foreign Direct Investment in export sector. Shaukat Tarin said a package of tax incentives has specially been designed for the housing schemes undertaken under the Naya Pakistan Housing Authority.
He said the government is providing a subsidy of 300,000 rupees for low-income households to enable them to build their own houses. For this purpose, he said, an allocation of 33 billion rupees is proposed in the budget. He said banks are participating in a financing programme, which has so far attracted applications of more than one billion rupees. Of which, seventy billion rupees have been approved and disbursements have started, he added.
He said the government is placing highest priority to uplift the agriculture sector. He said 12 billion rupees are being allocated for various agri-related initiatives. These include one billion rupees for locust emergency and food security projects; two billion rupees for enhancing productivity of rice, wheat, cotton, sugarcane and pulses; one billion rupees for enhancing oil cultivation on commercial scale and three billion rupees for improvement of water courses.
The Finance Minister said a total of 91 billion rupees are proposed in the budget for ensuring water security, excluding hydel energy generation projects. Fifty-seven billion are being allocated for Dasu Hydropower project, 23 billion rupees for Diamer-Bhasha, six billion rupees for Mohmand Dam and 14 billion rupees for Neelum-Jhelum hydropower project.