No new taxes imposed as PTI govt presents Rs7.13 trillion budget
- By Web Desk -
- Jun 12, 2020
ISLAMABAD: Minister for Industries Hammad Azhar presented the much-anticipated budget for the fiscal year 2020-2021 in National Assembly.
The minister explained in detail, his government’s economic goals and why a certain allocation was made to a particular sector while presenting the budget with a total outlay of Rs7.13 trillion. The major allocations are Rs25.5 billion for health, Rs83.3 billion for education and Rs1.3 trillion for defence.
The minister started his speech by saying that Pakistan Tehreek-e-Insaf (PTI) government’s main goal was to revive the dwindling economy by eliminating corruption, setting development goals aimed at benefiting the poor people of the country.
He repeated that PTI govt inherited an economy which is in doldrums due to the wrong policies of the past government with zero exports, increase in current account deficit and non-development expenditure.
He said that some of the major achievements of the PTI government in past two years were bringing down the current account deficit to 73 percent, an increase of about 17 percent FBR revenue, 134 percent increase in non-tax revenue and $6billion loan repayment.
He was of the view that due to the government’s economic reforms, rating agency Moody’s upgraded Pakistan’s outlook to stable in December 2019.
About the impact of coronavirus lockdown in the country, the minister said that PTI government’s reforms received a setback in the form of COVID-19 spread but the government is still committed to economic reforms while dealing with the pandemic at the same time.
He maintained that at least Rs1200 billion stimulus package was approved for coronavirus and lockdown affectees.
SALIENT FEATURES
The budget 2020-21 has the following salient features.
The total outlay of budget 2020-21 is Rs 7,294.9 billion. This size is 11% lower than the size of budget estimates 2019-20.
The resource availability during 2020-21 has been estimated at Rs 6,314.9
billion against Rs 4,917.2 billion in the budget estimates of 2019-20.
The net revenue receipts for 2020-21 have been estimated at Rs 3,699.5 billion indicating an increase of 6.7% over the budget estimates of 2019-20.
The provincial share in federal taxes is estimated at Rs 2,873.7 billion during 2020-21, which is 11.7% lower than the budget estimates for 2019-20
The net capital receipts for 2020-21 have been estimated at Rs 1,463.2 billion against the budget estimates of Rs 831.7 billion in 2019-20 reflecting an increase of 75.93%
The external receipts in 2020-21 are estimated at Rs 2,222.9 billion. This shows an decrease of 26.7% over the budget estimates for 2019-20
The overall expenditure during 2020-21 has been estimated at Rs 7,294.9 billion, out of which the current expenditure is Rs 6,345 billion
The development expenditure outside PSDP has been estimated at Rs 70.0 billion in the budget 2020-21.
ANNUAL BUDGET STATEMENT
ALLOCATIONS
PUBLIC SECTOR DEVELOPMENT PROGRAMME (PSDP) 2020-21
For the year 2020-21, National Economic Council (NEC) has approved an overall size of PSDP at Rs 1,324 billion, which is 2.9% of Gross Domestic Product (GDP).
Federal PSDP for the year 2020-21 has been kept at Rs 650 billion, which is lower by 7.27% than budget estimates of 2019-20. The share of Federal Ministries/Divisions in 2020-21 PSDP is Rs 418.676 billion
which indicates an increase of 20.22% over budget estimates of 2019-20.
The Corporations’ PSDP for 2020-21 has been placed at Rs 158.325 billion which is lower by 19.94 % as on the budget estimates of 2019-20. An amount of Rs 70 billion has been allocated in the budget 2020-21 for Covid Responsive and other Natural Calamities Program. Earthquake Rehabilitation and Reconstruction Authority (ERRA) has been allocated Rs 3 billion in the budget 2020-21.
ENVIRONMENT PROTECTION
Under the head of Environment Protection, an amount of Rs 431 million has been estimated in budget 2020-21 for Waste Water Management, which is lower by 8.3% than budget estimates 2019-20.
HEALTH AFFAIRS AND SERVICES
Under the head of Health Affairs and Services, a total allocation of Rs 25,494 million has been made in the budget estimates 2020-21, which is higher by 130.55% from the budget estimates 2019-20.
The allocation for Hospital Services forms the major component with amounting to Rs 22,774, which is 89.33% under this classification.
EDUCATION AFFAIRS AND SERVICES
Education Affairs and Services have been provided with Rs 83,363 million in the budget estimates 2020-21 as compared with Rs 77,262 million in budget estimates 2019-20 and Rs 81,253 million in revised estimates 2019-20.
The bulk of expenditure at Rs 70,741 million has been allocated for Tertiary Education Affairs and Services in budget 2020-21, which is 84.86% of the total allocation under this head.
SUBSIDIES, GRANTS AND TRANSFERS
Total subsidies for fiscal year 2020-21 have been estimated at Rs 209,000 million which is decreased by 23.02% and 40% over budget estimates and revised estimates of 2019-20 respectively.
In budget 2020-21, the allocation for subsidies to WAPDA/PEPCO forms the major component, which is 59.33% of the total allocation followed by subsidy to Naya Pakistan Housing Authority with share of 14.36%, KESC with share of 12.2% and, PASSCO with share of 3.35%.
DEVELOPMENT LOANS AND ADVANCES
Development loans and advances are made by the federal government to provinces, Government of Azad Jammu and Kashmir, Public Sector Enterprises (PSEs), Financial/Non-Financial Institutions, District Governments/TMAs and Others to assist them in carrying out their development programmes.
For budget 2020-21, development loans and advances (local) have been estimated at Rs 128,319 million, while External development loans and advances has been estimated at Rs 272,623 million.
ECONOMIC AFFAIRS
The allocation under the head of Economic Affairs in the budget 2020-21 has been projected at Rs 71,751 million, as compared with Rs 84,167 million in the budget estimates 2019-20 and Rs 106,411 million in revised estimates 2019-20.
Major share of this head goes to Construction and Transport which is 21.79% of total allocation for Economic Affairs.
Agriculture, Food, Irrigation, Forestry and Fishing gets 13,696 million.
DEFENCE AFFAIRS AND SERVICES
For budget 2020-21, Rs 1,289,134 million has been allocated for Defence Affairs and Services as compared to Rs 1,227,388 million in last fiscal year.
BUDGET IN BRIEF
MAJOR POINTS – LIVE UPDATES
No new taxes have been imposed budget 2020-21
The FBR tax collection target has been set at 4963 billion rupees while the non-tax revenue is estimated to be about 1610 billion rupees.
Under the NFC Award, 2874 billion rupees will be transferred to the provinces. The provincial share in federal taxes is estimated at 2873.7 billion rupees.
The net revenue receipts have been estimated at 3699.5 billion rupees indicating an increase of 6.7 percent over the budget estimates of the outgoing fiscal year.
The net capital receipts have been estimated at 1463.2 billion rupees, which are 75.93 percent higher than the outgoing fiscal year.
10 billion rupees have been earmarked to provide relief to the agriculture sector and fight the crop munching locusts.
24 billion rupees have been earmarked for ML-1 and other projects of Pakistan Railways and additional funds of thirty-seven billion rupees for other projects of communication sector.
Government has increased budgetary allocations for Higher Education Commission from existing 59 billion rupees to 64 billion rupees.
Federal Excise Duty on imported cigarettes and tobacco is being increased from 65 percent to 100 percent, while e-cigarettes and other substitutes of tobacco have also been included in this list.
Rs1billion allocated for artists’ welfare fund.
Rs6billion allocated to deal with challenges posed by climate change.
Rs20billion allocated for science and technology.
The minister said that the current account deficit will be confined to 4.4 percent.
The inflation will be brought down from 9.1 percent to 6.5 percent. GDP growth target has been set at 2.1 percent, which remained negative four percent in the outgoing fiscal year.