Federal Finance Minister Muftah Ismail presented a budget of Rs 95 trillion for the financial year 2023-22. In the National Assembly sitting...
Federal Finance Minister Muftah Ismail presented a budget of Rs 95 trillion for the financial year 2023-22.
In the National Assembly sitting chaired by Speaker Raja Pervez Ashraf, Finance Minister Muftah Ismail started presenting the budget.
The PTI did not enter the House as usual and the opposition seats remained vacant.
Highlights of the budget
The total expenditure is estimated at Rs. 9,502 billion.
Rs 3,144 billion has been set aside for debt repayment.
Rs 800 billion has been earmarked for Public Sector Development Program.
Rs 1,523 billion has been earmarked for national defense.
Rs 550 billion has been earmarked for civil administration expenditure.
Rs 530 billion has been set aside for pensions.
Rs 699 billion has been earmarked for subsidies.
Small businesses with an annual income of 600,000 will not be taxed.
Rs 364 billion has been earmarked for Benazir Income Support Program.
One crore students will be given unparalleled scholarships.
Rs 109 billion has been allocated in the budget for education.
At least one lakh monthly salary will be taxed.
Those earning less than Rs 40,000 per month will be given Rs 2,000 per month.
The salaries of government employees have been increased by 15%.
Taxes on vehicles of 1600 cc and above have been increased.
Zero sales tax will be levied on solar panel imports.
Rs 10 billion has been earmarked for climate change.
Introducing the budget speech, the finance minister said that all the federal units were represented in this government and therefore the decisions taken on the national economy had the broad support of the nation.
He said that the government was facing a difficult challenge to rectify the deteriorating economic situation created due to poor performance of last four and a half years. During this period economic mismanagement was on the rise due to which the common man was badly affected and the rupee depreciated sharply and the price of everything went up.
Criticizing the PTI government, the finance minister said that an inexperienced team had brought the country to the brink of disaster during the last four and a half years, adding a new budget every year and As policy changed, hurting investor confidence, they became accustomed to changing positions in front of the international community and international financial institutions, so the IMF's program, which was due to end this year, was in February. Was suspended and the fundamental reforms that were supposed to take place in 2019 have not yet taken place.
The Finance Minister said that fundamental reforms are needed to rectify the structural deterioration of the economy, which has an immediate negative reaction but the economy is on a strong footing, the previous government refrained from such measures. However, all those reforms have been delayed due to which the economy has not been able to stand on its own feet today and the prosperity has gone away.
The Finance Minister said that we have always given priority to the national interest over our political interests. Even now our first priority is economic stability. The current account deficit gets out of control when the economic growth rate goes above 5 or 6%, which is why we run the economy. They give incentives to the rich class which increases imports while exports remain the same.
The Finance Minister said that in order to tackle this problem we have to adopt new thinking and find a solution as a nation, we have to give incentives to the low income and middle class to run the economy so that the local Production will increase and agriculture will also develop.
Muftah Ismail said that we have to improve the economic condition of the poor, provide facilities to the poor so that their income increases. The money spent does not increase imports, but the process of economic development begins within the country, by doing so we can make comprehensive development on a permanent basis.
He said that we have to lay the foundation of economic growth, a strong foundation on which the magnificent edifice of stable economic growth can be built and which is sustainable in its entirety, we need to increase exports, agriculture, IT sector and industry. Exports will have to increase.
"We need to increase the productivity of the agricultural sector and increase the competitiveness of our exports so that the world market can compete with the products of other countries. We need to facilitate and improve business opportunities so that local and foreign investment Invest as much as you can.
The Finance Minister said that after importing machinery and raw materials, we have to increase its value and export it, thus increasing the imports will also increase the exports.
Muftah Ismail said that we are facing a difficult challenge to get the crippled economy back on track, economic instability has been going on for the last four and a half years, historical inflation, difficulties in foreign exchange, relentless borrowing at high cost. The previous government failed to find solutions to the problems of load shedding and made the lives of the people miserable and broken.
The Finance Minister said that due to mismanagement of last 4 years, Pakistan is ranked 3rd among the major countries in the world in terms of inflation. Pune happened in 4 years when 6 million people lost their jobs during the same period. In its 4 year period, the previous government borrowed Rs. 20,000 billion from Liaquat Ali Khan and Khawaja Nazimuddin to Ayub Khan, Zulfiqar Ali Bhutto, Bay. Nazir Bhutto, Mian Muhammad Nawaz, Shahid Khaqan Abbasi and Raja Pervez Ashraf, including all the Prime Minister's governments in 71 years, 80 percent of the loans taken.
He said that the reason for this was that they spent more than the revenue and presented the budgets of the 4 highest deficits in the history of Pakistan. The debt of Rs. Has been increased and a deficit of Rs. 5,100 billion is expected in the current financial year.
He said that the revolving credit of electricity has increased from Rs. 1,062 billion which we left in May 2018 to Rs. 2,500 billion and for the first time in the history of the country, revolving credit in the gas sector Which has reached Rs. 1,400 billion in March 22-2021.
The Finance Minister said that during the Nawaz Sharif regime, inflation was kept to a minimum, the inflation rate was close to 5 percent while the minimum inflation rate was recorded at 3.9 percent, the worst in the last four years. Due to the administration, Pakistan is in a wave of constant inflation because the previous Prime Minister used to say that I did not come to see the rates of onion and tomato but to make the country great. I do not know of any country How can it be great?
Muftah Ismail said that I do not understand why the prices of sugar and flour went up as soon as Imran Khan came to power. In 2013, the price of sugar was Rs 55 per kg and in 2018 when we went, the price of sugar was Rs 53 but Then after 2018, the price of sugar went up and its price exceeded Rs. 140.
Growth rate
The Finance Minister said that then came Prime Minister Shahbaz Sharif who brought the price of sugar to Rs 70 per kg, similarly we left the price of flour at Rs 35 per kg in 2018 which increased to Rs 80 per kg in the new Pakistan. Gone, then Shahbaz Sharif started providing flour at Rs 40 per kg at utility stores and many shops.
He said that when our government left in 2018, Pakistan was exporting wheat and sugar but now we are importing both things due to wrong decisions of previous government.
"Our LNG contracts have been falsely accused and many leaders have been jailed," he said. She is teaching us to buy expensive LNG.
Muftah Ismail said that when Imran Khan felt that our government was leaving at the end of February, he reduced petrol and diesel prices while Pakistan's treasury was running on debt. This decision plunged Pakistan's economy into crisis. An attempt is being made to remove it.
The Finance Minister said that Prime Minister Shahbaz Sharif decided to provide protection to the poor in view of the high prices of petroleum products, giving Rs. 40,000 per month to low income families and Rs.
The Finance Minister said that between 2013 and 2018, the Pakistani currency showed stability but then due to economic mismanagement, the rupee depreciated between 2018 and 2022, the dollar rose from 115 to 189 against the rupee and the offer Crossing the 200 mark due to shocks, we have taken steps to stabilize the currency.
The Finance Minister said that the Prime Minister wants maximum relief to the people, for this purpose aid and subsidy measures have been taken, for this purpose it has been decided to impose tax on rich people while agricultural production. We will increase, we will develop industries, we will increase exports which will generate foreign exchange.
The Finance Minister said that along with the new revenue, the management of revenue would be improved, austerity is the priority of the government, reduction of government expenditure is part of this budget, vehicles, furniture, cabinet and The petrol limit for government officials will be reduced by 40 per cent, in addition to the mandatory visits will be banned.
He said that the budget has estimated Rs 530 billion for pensions in the next financial year. At least 5% growth will be achieved next year without upsetting the balance, thus increasing the GDP from Rs. 67 trillion to Rs. 78.3 trillion during the next financial year.
He said that the current inflation rate is 11.7% which is the highest level in the last ten years. Will be reduced to 11.5%.
He said that the tax rate in emerging market countries is about 16% of GDP but in Pakistan it is 8.6%. It is proposed to increase this rate to 9.2% during next financial year. It was left at 11.1%.
The Finance Minister said that the gross deficit of GDP this year is 8.6%, it will be reduced gradually, next year it will be reduced to 4.9%, as well as the gross primary balance of GDP. The negative is 2.4 percent. By improving it, it will be brought to positive zero point 19 percent in the next financial year.
The Finance Minister said that the government is taking steps to increase exports, imports are currently expected to reach 76 76 billion, next year they will be reduced to 70 70 billion, exports are currently ع 31.3 billion. In the next financial year, measures will be taken to increase them to 35 35 billion. The current account balance will be reduced from minus 4.1% of GDP to minus 2.2% of GDP in the next financial year.
The finance minister said remittances would reach a record 31 31.1 billion this year.
Remittances are expected to grow to ع 33.2 billion in the next fiscal year.
He said that the total interest payments this year will be Rs. 3, 144 billion, of which domestic interest payments are estimated at Rs. 2,770 billion, external interest payments are estimated at Rs. It is estimated to be Rs 9,950 billion, of which Rs 3,439 billion will be spent on domestic and Rs 511 billion on foreign loans.
The finance minister said that the public debt, which was Rs 25,000 billion in 2017-18, reached Rs 44,365 billion in March 2022, which is 72.5% of GDP. Debt growth has been slowed down by the reduction in debt. According to the law, the government's borrowing limit has been set at 60% of GDP.
Addressing the budget session in the House, Finance Minister Muftah Ismail said that before giving the budget estimate, I would review the revenue and expenditure.
Performance for the current financial year
In the current financial year, FBR revenue was Rs 6,000 billion, the share of provinces was Rs 3,512 billion and the net income of the federation was Rs 3,803 billion.
The non-tax revenue of the federal government will be Rs 1,315 billion while the total expenditure will be Rs 9,118 billion.
Expenditure on public service development program will be 550 billion.
3,144 billion will be spent on debt servicing.
1,450 billion will be spent on defense.
The federal government's expenditure will be 530 billion.
The pension will cost Rs 525 billion.
1,515 billion was spent on subsidies and 1,090 billion on grants.
Targets for Budget 23-2022
Estimates of FBR revenue for the next financial year
The FBR is estimated at 7,004 billion, the share of the provinces will be 4,100 billion.
The net income of the federation will be Rs. 4,904 billion which includes non-tax revenue of Rs. 2,000 billion.
The total volume of the federal budget is estimated at Rs. 9,502 billion.
Debt servicing will cost Rs 3,950 billion.
800 billion has been allocated for the Public Service Development Program.
Rs 1,523 crore has been allocated for defense.
550 billion has been earmarked for civil administration expenditure.
530 billion has been allocated for pensions.
Rs 699 billion allocated for targeted subsidies.
Rs 1,242 billion has been earmarked for the grant, which includes grants from Benazir Income Support Program, Bait-ul-Mal and other departments.
The allocation for Benazir Income Support Program (BISP) has been increased from Rs. 364 billion in 2023 to Rs. 250 billion in 2021.
Under BISP, 266 billion has been allocated to 9 million families under Benazir Cash Transfer.
Rs 35 billion has been earmarked to increase the Benazir Scholarship Program to 10 million children.
Rs 9 billion has been allocated for Benazir Undergraduate Scholarship to 10,000 students.
Rs 12 billion has been allocated for subsidy on Utility Store Corporation.
Rs 5 billion has been set aside for Ramadan package.
Presenting the budget speech, the Federal Minister further said that
Rs 570 billion has been earmarked for industry and trade energy.
Rs. 71 billion has been provided for payment of arrears of petroleum sector.
Education
An amount of Rs. 65 billion has been allocated for Higher Education (HEC).
Rs 44 billion has been set aside for HEC development schemes.
The HEC budget includes 5,000 benefits for Balochistan and the amalgamated districts.
One lakh laptops will be provided to the students in easy installments.
Agriculture and food security
Rs 21 billion has been allocated to increase crop and livestock production.
Steps for teens:
Under the 'Youth Employment Policy', 2 million youth will be provided access to employment opportunities.
Interest free loans of up to Rs. 500,000 will be provided to the youth for the promotion of business.
To promote business, we will launch a scheme to provide loans to the youth on easy terms up to Rs. 25 million.
25% quota for women in loan scheme.
Youth development centers for women with high tech and other skills will be set up.
250 mini sports stadiums will be built.
Industry and trade
Federal Minister for Finance Muftah Ismail said that Mr. Speaker said that industry is very important for any country and it is a source of employment for millions of people.
He said that all the claims of DLTL would be paid to the exporters immediately, Rs.40.5 billion certified by the Central Bank of Pakistan was due while the industrialists would be given exemption from load shedding for uninterrupted power supply.
PSDP
He said that 9 special economic zones would be created on China-Pakistan Economic Corridor.
He said investors from China and other countries would be facilitated to set up factories, adding that the previous government had obstructed the pace of work and so far not a single special economic zone had been set up.
Promotion of culture and film industry
The Federal Minister of Finance said that the first 'Film and Culture Policy' in the history of the country was approved by the Cabinet in our time in 2018. Unfortunately, it has not been implemented for four years.
He said that the film has been given industry status and a 'Binding Film Finance Fund' has been set up at an annual cost of Rs 1 billion and a medical insurance policy will be introduced for the artists.
He said that five years tax holiday, five years income tax on establishment of new cinemas, production houses, film museums and tax rebate on export of film and drama for ten years.
He said that income of cinema and producers was being exempted from income tax.
Muftah Ismail said that apart from 'National Film Institute' and 'Post Film Production Facility', National Film Studio is being set up at a cost of Rs. 1 billion.
He said that foreign filmmakers were being given rebates on joint film and drama projects at the local level but 70 per cent of the material would have to be shot in Pakistan.
He said that 8% 'holding tax' imposed on distributors and producers was being abolished.
He said that 5 years exemption from customs duty was being given on import of machinery, equipment and supplies for films, dramas while zero sales tax and internet duty were being abolished.
Public Sector Development Program
Muftah Ismail said that Rs. 800 billion has been earmarked for the Public Sector Development Program (PSDP) for the next financial year. We had released Rs. Half done
"We will focus on completing the ongoing projects so that the money spent on them is not wasted," he said. He said that more money would be spent on the development of Balochistan so that Balochistan could be brought on par with the rest of the country.
The Finance Minister said that Rs. 136 billion has been increased in PSDP for Special Provinces (Azad Kashmir and Gilgit-Baltistan).
Additional funds have been allocated for early completion of Dam and Dia Mir Bhasha Dam.
He said that the cities connecting the two ports with the Chinese border would be completed.
He said that under C-Pac, the focus has been on accelerating growth and increasing exports by accelerating infrastructure and economic zones projects.
He said that Rs. 395 billion has been earmarked for infrastructure.
He said that improving energy / power transmission and distribution is the priority of the government, Rs 73 billion will be provided for power sector out of which Rs 12 billion will be spent for early completion of Mohmand Dam. ۔
Muftah Ismail said that Rs 100 billion has been earmarked in the budget for major dams for water resources, Diamer Bhasha, Mohmand, Davos, Nai Gaj Dam and Command Area projects.
He said that Rs. 183 billion has been earmarked for small dams, drainage schemes, energy and water resources projects.
Transport and communication
He said that Rs. 202 billion has been allocated for highways and ports, while in addition to government investment, non-government funds are also being used for construction of major highways. Will be promoted.
He said that Rs.70 billion has been allocated for the purpose of SDGs and to make life easier for the people, besides Rs.40 billion has been set aside for other schemes.
He said that Rs.51 billion has been allocated for completion of ongoing projects and higher education projects.
He said that Rs 24 billion has been set aside for providing better health services to the people.
The Federal Minister said that Rs. 10 billion has been earmarked for tackling climate change in difficult times, including tree planting and projects to improve the natural environment.
He said that Rs 17 billion has been earmarked for training in information technology (IT), provision of laptops and promotion of IT exports.
He said that Rs. 11 billion has been allocated for increasing the use of modern machinery in agriculture, laser leveling, innovation in irrigation, supply of quality seeds and export of agricultural produce for agriculture and food security.
He said that Rs 5 billion is proposed in the budget for investment in special economic zones for infrastructure, exports, effective marketing, minerals and other sectors of industry.
Inland Revenue
Muftah Ismail said that these are the basic principles of tax policy this year.
Relying more on direct tax ie income tax and capital value tax.
Imposition of tax on non-productive assets
Progressive tax promotion
Protection of productive assets
Taxes on wealthy people
He said that the environment for investment in Pakistan is not conducive, the current tax system does not encourage employers, while encouraging investment in real estate which is an unpleasant aspect and hinders economic growth.
He said that the project leads to increase in the value of real estate, which in turn causes the middle class to........
Pakistan Customs
Customs duties on agricultural machinery, including irrigation, drainage, farming, harvesting and processing, greenhouse farming and plant protection equipment have been abolished.
Customs duties are also being abolished for other agro-based industries, machinery and agro-based industries.
Customs duty, additional customs duty and regulatory duty have been rationalized on about 400 tariff headings pertaining to different manufacturing sectors.
The tariff structure on synthetic yarn has been rationalized.
More than 30 active pharmaceutical ingredients were given complete exemption from customs duty.
Raw materials for the first aid bandage industry have also been further exempted from customs duty.
Relief measures for government employees
Announce 15% increase in salaries of government employees
The long-standing demand for integration of ad hoc relief into basic pay was accepted
After the budget speech, Muftah Ismail introduced the Finance Bill 2022 in the House.
Following the presentation of Finance Bill by the Finance Minister, Speaker National Assembly Raja Pervez Ashraf adjourned the House till 4 pm on Monday, June 13.
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