Finance Minister Shaukat Tarin unveiled the budget 2021-22. The total expenditure of the budget had been kept at Rs 8,478 billion and had set the tax collection target at Rs 5,829 billion.
Leader of the Opposition in the National Assembly Shehbaz Sharif and Pakistan People’s Party (PPP) chief Bilawal Bhutto Zardari were in the house. Opposition members continued to bang desks and shouted slogans of “Go Niazi Go!” as the minister spoke.
Earlier, Bilawal met Sharif at his chamber in the assembly and they decided both parties would jointly oppose the PTI’s budget.
Tarin began his speech by saying it was an honour for him to present the Pakistan Tehreek-e-Insaf (PTI’s) third budget.
The minister paid tribute to the PTI government for stemming the spread of the coronavirus pandemic and taking steps to ensure businesses did not suffer massive losses in the country due to the lock downs.
Pensioners will get 10 per cent rise. Integrated allowance for Grade 1-5 has been raised from Rs 450 to Rs 900.
He said the defence budget of the country had been allocated Rs 1,370bn while the government had earmarked Rs 1,168 bn for development and non-development grants for provinces.
The government had allocated Rs 682bn for subsidies to various sectors of the economy, adding that Rs 479bn had been allocated to run the civil government.
The government was serious in stemming the spread of the coronavirus and keeping its adverse effects at bay, adding that the government had set aside Rs100bn for it.
He announced the government’s initiative to earmark $1.1bn to procure coronavirus vaccines, adding that the government aimed to vaccinate 100mn people by July 2022.
Ehsaas Emergency Cash Program
“The government, through the Ehsaas Emergency Cash Programme, provided cash to 12mn people across the country,” he said. The finance minister announced that the government had set aside Rs260bn for the Ehsaas programme in the budget.
Tarin said remittances had increased in Pakistan to record levels, adding that these are expected to rise to $29bn by the end of this month. “This is proof of the love that overseas Pakistanis harbour for Prime Minister Imran Khan,” he said.
Speaking about tax collection, he said it had grown by 18% and had crossed Rs4,000bn, adding that critics had no response to the government’s impressive performance in this regard.
Finance minister announced that the country’s economy was now entering the growth period, adding that almost every sector is growing.
He said Pakistan was seeing a “historic growth” in agriculture, stating that apart from cotton, all other crops saw extraordinary increases. He said that growth in the services sector helped improve numbers pertaining to poverty and had also played a major part in generation of wealth in Pakistan.
Tarin said the government had kept the growth target at 4.8% for the fiscal year, adding that the government will not leave the poor and the destitute at the mercy of inflation. “Never in our economic history, were poor people able to realise their dreams,” he said, adding that PM Imran Khan wanted to uplift the poor.
He said the government had decided to provide interest-free loans of up to Rs500,000 to the poor.
He announced that the Public Sector Development Programme will be increased from Rs630 billion to Rs900 billion to counter the adverse impact of the coronavirus pandemic.
Tarin announced a development package for 14 districts in Sindh, adding that these will focus on improving education, solving the province’s water issues, and carrying out development in these districts. Rs16.5 billion have been allocated for Karachi-based projects for the fiscal year 2021-22.
For developmental projects in Gilgit-Baltistan, the government has allocated Rs 40 billion. Meanwhile, Rs 54 billion have been allocated for Khyber-Pakhtunkhwa. Rs 601 billion will be given to South Balochistan for uplift programs, he added.
The minister announced that the government has slashed sales tax on locally manufactured cars from 17% to 12.5%. The government has also exempted Federal Excise Duty (FED) on 850cc cars and will slash duty on electric cars.
Tarin said the government was slashing withholding taxes on mobile phones, adding that it will be reduced to 10% at first and then 8% later.
If mobile phone call duration exceeds three minutes, one rupee per call in addition to the rates of duty will be charged. For SMS service, ten paisa per SMS in addition to the rates of duty will be charged.
Tax on Internet services not approved by the Cabinet. FED reduced to 16 per cent from 17 per cent . IT and IT-enabled services given zero duty regime status. Data storage and Cloud computing included in the definition of IT enabled services.
Tarin said the government was introducing third-party audits which would thwart the Federal Board of Revenue (FBR) harassing any individual or business entity. He said those who are found guilty of evading taxes or deliberately hiding their income will be fined severely.
In the budget for the next fiscal year, a special plan for the elimination of circular debt would be introduced. “The government plans to reduce line losses through investment,” Tarin added. Moreover, an electric vehicle policy would also be announced.
In the next fiscal year, the government has increased the PSDP budget to Rs 900 billion from Rs 630 billion. Tarin assured that the government would improve road infrastructure. Furthermore, through PSDP, it will invest in high return projects.
Talking about agriculture, the minister said that the agriculture sector witnessed historic growth.
Unveiling the federal budget, the finance minister announced a national agriculture emergency program. The government plans to enhance livestock on modern lines and has decided to allocate Rs12 billion for the most important sector.
Dasu, Diamar-Bhasha and Mohmand dams are a part of the budget. Rs91 billion have been allocated for water resources. Moreover, Rs14 billion have been allotted for the Neelum Jhelum power project. Tarin mentioned that the ML-1 project will be completed in three packages.
Sharing the allocations for next year, he mentioned that Rs22 billion have been allocated to produce 100 MW electricity at Jamshoro. Moreover, Rs22 billion have been allocated for coal-based power projects, Rs16.5 billion for Tarbela fifth extension and Rs118 billion for different power transmission lines.
The federal minister stated that Pakistan is one of the 10 countries most hit by climate change. Highlighting PM Imran’s vision of planting trees, he said Rs14 billion have been allocated for the government’s vision of “One Billion Tree Tsunami.”
Rs 118 billion have been allotted under PSDP for the social uplift. Non-tax revenues to rise by 22% during FY22, meanwhile federal expenditures to rise 15%.
Under the budget, $1.1 billion have been allocated for vaccine import.