Dar spells out salient features of FY24 budget
Business
FM Ishaq Dar will present a deficit budget with more taxes
ISLAMABAD (Dunya News) - Amid ongoing political and economic crises, Finance Minister Ishaq Dar on Friday tabled the budget for fiscal year 2023-24 (FY24).
Mr Dar started off by comparing the economic indicators of 2017 and 2022, followed by the bashing of the PTI's government.
Earlier, it was reported that the coalition government is all set to present today the federal budget for the fiscal year 2023-24, with an estimated outlay of more than Rs14.5 trillion.
Under the watchful eye of the International Monetary Fund (IMF), Finance Minister Ishaq Dar will deliver the budget speech at 4pm in the National Assembly. The NA Secretariat has issued four-point agenda of the budget session.
The federal deficit budget is expected to be 7.7 per cent of the Gross Domestic Product (GDP). Federal Minister for Finance and Revenue Ishaq Dar will present the "deficit" budget with the expected announcement of more than Rs700 billion new taxes.
The budget has been formulated while considering the existing challenges being faced by the economy at domestic and international fronts.
The government is expected to earmark Rs1,150 billion for annual development programme and Rs1,800bn for defense. The levy on petroleum products may be increased. The government employees and pensioners may get 20 per cent and 15pc raise respectively.
The finance ministry has proposed to allocate Rs7,300bn for paying debts and loans and Rs1,300 for subsidies. The proposed tax collection target for the Federal Board of Revenue (FBR) is Rs9,200bn and for non-tax revenue is Rs2,800bn.
Hence, mitigating people’s sufferings, transforming agriculture sector, promoting Information Technology (IT), boosting exports, promoting industrial growth and bolstering businesses, would be the main focus of the document, the sources said.
On the revenue side, the government would introduce measures for bringing improvements in the system of tax collection, broadening the tax base, and facilitation to tax-payers.
Keeping in view the robust growth of revenues during the current fiscal year (2021-22), the government is likely to set the revenue collection target at over Rs9 trillion for the fiscal year 2023-24.
The government is firmly committed to presenting a pro-people, business-friendly and progressive Federal Budget FY 2023-24. It will pursue policies aimed at fiscal consolidation to contain budget deficit.
Read More: Budget FY24: Govt employees likely to get up to 30pc increase in salaries
In addition to fiscal management, revenue mobilization, measures for economic stabilization and growth, reduction in non-development expenditures, job creation and people-friendly policies for the socioeconomic prosperity of the country, would feature in the budget.
It would also focus on social sector development besides introducing reforms for improving governance and boosting the private sector for investment.
The preparations for the announcement of the federal budget for fiscal year 2023-24 continued in full swing in accordance with the prescribed timeliness.
This is being prepared in close coordination between all departments and ministries involved in budget related events including the presentation of the budget in the Parliament and launching of the Economic Survey, they added.
According to Reuters, Pakistan's government will present its annual budget to parliament on Friday needing to satisfy the IMF to have any chance of securing the release of more bailout money, with the crisis-riven country due to hold elections by November.
The risk of default on sovereign debt is rising, with the economy creaking under twin deficits and record high inflation, which has further dented the popularity of Prime Minister Shehbaz Sharif's coalition ahead of the vote.
The economy could slide closer to the cliff edge as a result of the latest bout of political instability, with former Prime Minister Imran Khan, the main opposition leader, locked in a dangerous struggle with the country's powerful military.
Some budget figures were announced earlier this week, including development spending of 1,150 billion Pakistani rupees ($4 billion), and an economic growth target of 3.5% for the coming fiscal year.
Sources have also told Reuters that preliminary budget proposals envisaged a fiscal deficit of 7.7% of GDP, with total spending at 14.5 trillion Pakistani rupees ($50.7 billion) and revenue collection at 9.2 trillion Pakistani rupees ($32.2 billion). The proposals also set an inflation target of 21%, well below the record high of nearly 38% inflation recorded in May.
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On Thursday, the International Monetary Fund said that it has been discussing the budget with Pakistan.
Sharif's government is hoping to persuade the IMF to unlock at least some of the $2.5 billion left in a $6.5 billion programme that Pakistan entered in 2019 and which expires at the end of this month.
"The focus of discussions over the FY24 budget is to balance the need to strengthen debt sustainability prospects while creating space to increase social spending," Esther Perez Ruiz, the IMF's resident representative for Pakistan, said on Thursday.
Pakistan missed almost all of its economic targets set in the last budget, most notably its growth target, which was initially set at 5%, revised down to 2% earlier this year. Growth is now projected to be just 0.29% for the fiscal year ending June 30.
Foreign exchange reserves have dipped below $4 billion, according to data released by the central bank on Thursday, enough to cover barely a month of imports.
The government has no fiscal space to introduce popular measures that will win it votes or a stimulus to spur flagging economic activity, with limited avenues for raising revenue in the short term and domestic and international debt obligations continuing to mount.
Sharif's coalition could take some comfort the troubles surrounding opposition leader Khan, whose party has suffered a string of defections of key leaders following a crackdown by the military.
Khan was ousted in a parliamentary confidence vote last year, but polls show he remains Pakistan's most popular politician. He is now fighting numerous legal cases, ranging from corruption to incitement and abetting murder that could result in him being barred from contesting the election.
-- PM Shehbaz approves programmes for welfare of masses --
Prime Minister Shehbaz Sharif has approved incorporating in the budget 2023-24 revolutionary programs for the welfare of youth, women and farmers.
Funds have been earmarked for special projects pertaining to the youth, women and agricultural tubewells.
According to details, the youth will be provided with interest free loans while endowment funds will be established for education and sports.
On the pattern of Punjab Endowment Fund, approval has been given by the Prime Minister for the establishment of Pakistan Endowment Fund for Education. Under this fund, scholarships will be provided to the talented but poor students.
A substantial amount has been set aside for the PM Youth Program to extend small loans to the youth. Resources have also been allocated in the budget for provision of various skills to the youth including those relating to the field of IT.
An amount has also been allocated in the budget for provision of one hundred thousand laptops to the youth. The youth will be provided with financial assistance for the IT related start-ups.
Funds have been set aside for promotion of sports activities in the country. An amount has been earmarked for a program aimed at empowerment of women folk. A program has been approved to convert agricultural tubewells to solar energy.
