ISLAMABAD: Federal Minister of Industries and Production Hammad Azhar has presented the budget 2020-21 in a special session of the National Assembly.
In order to prevent the spread of COVID-19 pandemic, social distancing policy was being followed. The opposition and government have agreed that only a maximum of 86 members, 46 from the treasury and 40 from the opposition, will be present in the house at one time.
Prime Minister Imran Khan was also present in the National Assembly. Commencing the budget Hammad Azhar said that to be presenting the second budget of the PTI government.
The federal minister said that the government’s top two priorities have been battling corruption and ensuring accountability. “We were near bankruptcy when the PTI came to power,” he added.
Hammad Azhar said, “There has been no increase in exports in the past five years. The reserves of the State Bank of Pakistan declined from $18bn to $10bn due to the failed policies of the past.”
“Pakistan had been placed on the Financial Action Task Force (FATF) grey list due to the absence of concrete policies to keep terror financing and money laundering in check,” he added. He further said that the PTI-led federal government took stern decisions to stabilize the economy.
Azhar said, “Our budget deficit shrank from 5 percent to 3.8 percent while IMF gave us an extended facility of Rs 6 billion and remittances increased from 16 to 17 billion”.
‘Opposition Members started protest’
During the budget presentation, Opposition members chant slogans and bang desks to interrupt the federal minister.
Opposition members chanted slogans against the government and Prime Minister Imran Khan. Many were carrying placards saying, ‘Corrupt government not acceptable’.
Budget 2020-21
The total outlay of budget 2020-21 is Rs 7,294.9 billion. This size is 11 percent lower than the size of budget estimates 2019-20, according to the budget document.
Presenting details of the new budget, Hammad Azhar said that the budget was prepared in light of the impact of coronavirus pandemic. The PTI government announced that it would not impose any new taxes this year.
He said, “No new taxes have been levied and expansionary policies are needed.” The federal minister informed that the Federal Board of Revenue (FBR) revenue target was kept at Rs 4.95 trillion for next year.
Azhar said that the development budget has been kept at a reasonable level to provide employment opportunities and support economic growth.
Terming it a “relief budget”, Azhar said the Imran Khan-led government aimed to restore businesses and prevent bankruptcies. The government has also suspended customs duty on 2,000 tariff lines to discourage smuggling.
The government has increased FED on imported cigarettes from 65% to 100% and from 13% to 25% on caffeine-based drinks. The sales tax on retailers has been reduced from 14% to 12%.
“Foreign banks to be given tax exemptions. 15% withholding tax to be introduced on the profit of all banks,” he added.
The sales tax on locally manufactured mobile phones has been reduced while withholding tax on marriage halls and schools eased.
He also said, “To save lower class from the tax burden, a summary will be given to exempt advance tax on rickshaws and motorcycles.”
The development budget is set at Rs 1,324 billion with a 27% increase in funds for new projects and 73% for existing programmes to combat the coronavirus.
‘Budget Key Features’
The total expenditure of the budget for the next year is Rs7,136 billion slightly higher than the budgeted figure for the previous year. Of this total, the current expenditure for the next fiscal was budgeted at Rs 6,345 billion.
Hammad Azhar revealed that the total expenditure for public sector development projects (PSDP) for 2020-21 had been budgeted at Rs1,324 billion. Of this, federal PSDP has been allocated Rs 650 billion while Rs 676 billion has been allocated to provinces.
* No new taxes have been imposed.
* The power sector has been given Rs 80 billion.
* Rs 1.3 trillion has been allocated to Defence.
* Rs 25.5 billion will be provided to the Health sector.
* Rs 64 billion have been set aside for higher education.
* Rs 10 billion have been allocated to Agriculture.
* Government has enhanced poverty alleviation and social safety net expenditure to Rs 208 billion.
* Rs 2 billion has been allocated for the Kamyab Jawan Programme.
* Rs 54 billion have been set aside for special areas.
* Rs 25 billion has been allocated to uplift remittance through banks.
* Rs 30 billion has been allocated for Naya Housing Authority.
* Rs 1 billion has been dedicated to IT and e-commerce.
* Limit for goods purchased has been raised from Rs50,000 to Rs100,000.
* Rs 70 billion has been set aside to improve living standards.
* Rs 70 billion granted in dam funds.
* Rs 33 billion for communications.
* Rs 30 billion 5G and e-governance.
* In total, railways and transport have been allocated a budget of Rs 118 billion.
* Rs 431 million has been estimated for Waste Water Management.
* Rs 70 billion has been allocated for a special programme to mitigate COVID-19 impact
Azhar said the government will pull out the economy from a 0.4 percent contraction and is aiming for a 2.1pc growth in GDP for the fiscal year 2021. He further said that the fiscal deficit would be 7 percent of the GDP and has been budgeted at Rs 3,195 billion for FY2021.
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