Federal Budget worth Rs 3.259 trillion presented in NA
Pakistan
Federal Budget worth Rs 3.259 trillion presented in NA
The newly appointed Finance Minister Dr. Abdul Hafeez Sheikh presented the budget to the house. The total outlay of the federal budget being announced today Fiscal Year 2010-11 is likely to be Rs 2.764 trillion with current expenditure of Rs 1.975 trillion while the total revenue collection has been estimated at Rs 1.667 trillion translating into a fiscal deficit of 4 percent.The major announcements in the budget including increase in basic salary for government employees by 50%, while General Sales Tax (GST) has been raised to 17% from 16%. Rs 16.8 billion for health sector while an amount of Rs 15.8 billion for higher education and Rs 5.2 billion for education sector has been earmarked in the next budget. Value Added Tax (VAT) deferred until October 2010.Other significant highlights of the budget include the raise in minimum wage to Rs 7000. The government has decided to decrease cabinet minster salaries by 10 percent. All government expenses have been frozen on current levels.Highlights of the budget 2009-10Finance Minister Hafeez Sheikh in his budget speech in the National Assembly on June 5, 2010 underlined that total budget outlay for 2010-11 is Rs 3259 billion, which is 10.7 percent more than the current year.In the budget 50 percent ad hoc allowance of basic salaries has been granted to government employees. Salaries of government employees have been raised by 50 percent while salaries of the Federal Cabinet have cut down by 10 percent. Medical allowance for employees of Grade 1-15 has been increased by 100 percent while the raise in medical allowance for employees of Grade-16 to 22 has been set at 15 percent of their basic pay. According to the budget, GST has been raised from 16 to 17 percent and Rs 1 CED has been imposed on manufacturing of each cigarette. Hafeez Sheikh in his speech announced that tax revenue is targeted at 1.78 trillion rupees out of which the Federal Board of Revenue will collect 1.667 trillion rupees, about 9.8 percent of GDP. Non-tax revenue is targeted at 632.2 billion rupees. Revenue from direct taxes is targeted at 657.7 billion rupees and revenue from indirect taxes is targeted at 1.12 trillion rupees. Subsidies will be reduced to 126.68 billion rupees from 228.99 billion rupees. As per budget speech, development spending or the public sector development spending is targeted at 663 billion rupees, with 373 billion rupees allocated for provinces, and 280 billion rupees as the federal component. Inflation is targeted at 9.5 percent in 2010/11 fiscal year, down from the central bank's forecast of between 11.5percent and 12.5 percent for the year ending June 30, Hafeez Sheikh added. The defence budget is set at 442.2 billion rupees, a 17percent increase from last year. The debt to GDP ratio has climbed to 55 percent and we must protect the poor. In addition, 30 million energy savors will be provided in a bid to conserve electricity. He stressed upon self-reliance and resource mobilization.Talking about unemployment, he said jobs are created when the whole economy grows. He held flawed policies and influence of some government departments responsible for energy shortage in the country where people are willing to pay for the utility but cannot get it due to unavailability. We have to make our policies right and rise above the petty issues. He said there is burden of 235 billion on the countrys budget due to losses being incurred by state owned enterprises including PIA, Pakistan Steel Mills and PEPCO. Three dams will be built in 2010-11. Pepco want subsidy of Rs 180 billion. Budget deficit of Rs 685 billion is 4 percent of GDP. Hafeez said that reformed GST would be implemented from October 31 and all non-developmental expenditures would be frozen. As per budget speech, 40 billion would be distributed among people from Benazir Income Support Programme and Baitul Maal will continue functioning with Rs2 million. Minimum wage has been raised from Rs6000 to Rs7000. ADP fixed at 603 billion out of which 52 percent will be given to the provinces. GST will be reformed under which instead of 16 to 25 percent GST there should be single 15 percent GST for all. No sales tax on health and food will be imposed. Rs10 FED has been imposed on 1 mmbtu gas. Hafeez said that minimum taxable income for salaried class has been raised from Rs200,000 to Rs300,000. Capital Gains Tax of 10 percent is being imposed on gains from stocks held for less than 6 months; 7.5 percent on gains from stocks held for 6 months to 1 year and; no tax on capital gains from stocks held for more than a year. He said that custom duty has been reduced on 29 items and pension has been raised by 15 percent for the employees who retired before 2001 and 20 percent for those retired after 2001. He said that 200,000 unemployed youth will be provided employment for 100 days under Youth Scheme. Opposition parties, traders, masses reject the budgetThe opposition members of the National Assembly (NA) have rejected the Federal Budget 2010/11 saying the budget was nothing except a number game. The government members of the NA termed the budget as historical. The members of the government benches claimed that 50 percent increase in basic salary is a historical step. They added that sales tax on electricity has been reduced which would impact the masses directly.Opposition members including PML-Ns Ahsan Iqbal and PML-Qs Pervaiz Elahi said that inflation has crept up by 300 percent while increase in salaries have been only 50 percent. The ministers criticized the government for not announcing any concrete measures for the masses and said that to remove subsidy from utility stores would be additional burden on the common man.Jamiat Ulema Islam-F group members walked out of the cabinet session to register their protest against the budget. PM Gilani expressed sense of disappointment on the walkout. Traders rebuff the budgetThe trader communities of Lahore, Karachi and Faisalabad have also expressed disappointment over the budget complaining that no relief has been provided to the industries.Khyber-Pukhtoonkhwa chamber of commerce rejected the budget and said that the budget was just a number game. President Khyber-Pukhtoonkhwa Chamber of Commerce Riaz Arshad addressing the media said that the budget is not transparent and the public is being burdened. He also criticized the Federal Government for not implementing on the PMs package announced for Khyber-Pukhtoonkhwa.The traders of Multan expressed mixed sentiment on the budget calling it a balanced budget. However they too expressed regret that the government did not announce explicit steps for improving industry and commerce. Masses disappointed of budgetThe masses have rejected the Federal Budget 2010/11. The masses expressed concern that the budget would bring a new wave of inflation. People complained that only government employees have been given relief.
