Government has presented its first annual budget with a record outlay of Rs7,036 billion for the upcoming fiscal year, which is 30 percent higher than the budget of the outgoing year. The proposed budget carries the highest-ever deficit of Rs3,150 billion despite introducing massive additional revenue generation measures and reduction in expenditure.
The government has allocated Rs2,890 billion for interest payment, Rs421b for pension, Rs1,150b for defence, Rs271.5b for paying subsidies, Rs431.2b on running civil government, Rs831.2b for grants and transfers and Rs79b for provision of pay and pensions. The federal Public Sector Development Programme would consume Rs701 billion. In revenues, the tax collection target for Federal Board of Revenue is Rs5,555 billion while non-tax collection target is Rs894.5b. The privatization proceeds would generate Rs150b. The provincial surplus is estimated at Rs423b. The federal government would transfer Rs3,255 billion to the four provinces under National Finance Commission award. The government has announced 10 percent increase in salaries for government employees from grade 1 to 16, including armed forces employees. For government employees from grade 17 to 20, a 5 percent ad hoc relief has been announced. However, there would be no increase in salaries for civilian government employees from grade 21 to 22. The federal cabinet has also decided to take a 10 percent voluntary cut in their salaries, keeping in view the economic situation of the country. Pensions have been increased by 10 percent, while the minimum wage has been set at Rs17,500 per month. Minister of State for Revenue said that federal government and armed forces have decided to adopt austerity plan to reduce the soaring expenditures of the country. The defence budget would therefore remain static at Rs1,152 billion for the next fiscal year. Similarly, the civil government has reduced its expenditures by 5 percent to Rs437 billion from Rs460 billion. The government has allocated Rs200 billion as subsidy for protecting poor class of the society, which is using 300 unit of electricity every month. A ration card scheme is being introduced, which would facilitate one million needy people. Similarly, 80,000 people would be benefit from the interest-free loans scheme. The government has allocated Rs110 billion for Benazir Income Support Programme and increased the quarterly stipend given to poor people under this scheme Rs5,000 to Rs5,500. The government has presented this budget in tough economic situation and it has taken further tax measures to complete revenue target. Although the government has taken some measures to protect poor people but the budget will increase inflation. People are already unhappy over soaring prices daily utilities. The government has already declared this year as the year of economic stablisation. It shows that government has wasted its first year and could not succeed in getting economic stability. It has failed to fulfill its lofty claims. Coming time will be tough for the people and the government. Government needs to work hard to resolve prevailing economic crisis and put the country on the path of progress and prosperity.