The Pakistan Muslim League – Nawaz (PML-N) government on Friday presented its fifth and possibly last budget before general elections in 2018, earmarking a total of Rs 4,757 billion in expenditures for the next fiscal year.

Presenting the budget on the floor of the National Assembly, Dar claimed the PML-N government had turned the economy around in its past four years, and announced its ambitions to include Pakistan among the top 20 strongest economies in the world in the future.

But, apart from all the rhetoric and tall claims, here's a closer look at possibly the final budget and the measures and initiatives introduced by the PML-N before the party goes back into the public's court for general elections in 2018.

Relief measures 

• Proposal for 10% increase on the pay of all officers and soldiers as special allowance. In budget 2016-17, three allowances were merged. However, the 2008 adhoc relief allowance to the Army and the 2010 adhoc relief allowance for the civilians was not merged. A 10% adhoc relief allowance on the merged salary to all civilian and armed forces employees is proposed

• 10% increase also proposed in pensions

• Up to BPS-5 employees to be exempted from paying house-rent charges at the rate of 5%

• Daily allowance – domestic – to be increased by 60%

• Orderly allowance revised from Rs.12,000 to Rs.14,000

• Rate for transportation of dead bodies and local burial revised from Rs.1,600 to Rs.4,800 and Rs.5,000 to Rs.15,000 respectively

• Constant attendant allowance admissible to Armed Forces and CAF to be increased from Rs.3,000 to Rs.7,000

• Different allowances for offices and sailors of Pakistan Navy to be revised including; hard-lying pay, compensation for batman, uniform allowance and ration allowance

• Design allowance to be increased by 50%

• For employees of Pakistan Post, certain rates of allowances are being revised

• Soldiers of Frontier Constabulary to be given a Rs.8,000 per month fixed allowance. One-third of that allowance to go into effect from 1st March 2017; the one-third of it will be allowed from 1st July 2017 and the balance one-third from 1st July 2018

• Minimum wage: On the pattern of increase in the pay of Government employees the minimum wage of labour for their benefit is being increased from Rs.14,000 to Rs.15,000 per month

Budget 2017-18 at a glance

New initiatives introduced in the budget:

WELFARE

• Welfare scheme for family of Shuhadah (Martyrs) - CDNS - preferred profits will be offered

• Scheme for disabled persons - CDNS - preferred profits will be offered

• Loan write-off of widows - HBFC - upto Rs.500,000

• Facilitating elderly, widows and pensioners - CDNS - IT, on-line connectivity, and alternative service delivery mechanisms - ATMs, mobile, etc.

• Overseas Pakistanis - non-convertible bond, an exclusive sector in Islamabad by CDA

• BISP Beneficiary Graduation Program - Grants to willing self-employed individuals - Rs.50,000 grant per family will be provided to 250,000 families in the first phase

• Provision of off-grid solar solutions in sparsely populated areas especially Balochistan

AGRICULTURE

• Continuation of subsidized electricity for agri-tube wells

• Single-digit (9.9%) mark-up rate for farmers utilizing loans up-to Rs.50,000

• Continuation of subsidy on electricity to low-income and low-usage customers

• Credit to agriculture sector – increased from Rs.700 billion target of the current year to Rs.1,001 billion

FINANCIAL INCLUSION

• Financial inclusion - loans to low-income segments through micro-finance banks, exemption from WHT on branchless banking agents

INFORMATION TECHNOLOGY

• Setting up of an IT Park

• IT export houses/ companies shall be allowed to open Foreign Exchange Accounts in Pakistan

• Reduction of the withholding income tax on cell phone call from 14% to 12.5% and Federal Excise Duty from 18.5% to 17%

• Smartphones – custom duty to be reduced from Rs.1,000 to Rs.650

• Import duty is being reduced on mobile telecom products

• The start-up software houses shall be exempted from Income Tax for the first 3 years

• Exports of IT services from Islamabad and other Federal territories shall be exempted from Sales Tax

OTHERS

• Minimum wage of labour increased from Rs.14,000 per month to Rs.15,000 per month

• Bait al Maal allocation increased by 50% from Rs.4 billion to Rs.6 billion

• Risk sharing guarantee scheme - house building finance

TEXTILES

• To stabilize cotton prices in the country, a system of cotton hedge trading for the domestic cotton will be initiated

• Launch of Brand Development fund for textile sector

• The approval process of establishment of 1,000 stitching units has been completed and its implementation will start during FY 2017-18 and shall be completed in three years;

• Online textile business/trade portal for textiles using B2B (business to business) and B2C (business to consumer) mode

INFRASTRUCTURE FINANCE

• Establishment of Pakistan Infrastructure Bank

FINANCIAL INCLUSION STRATEGY

• A Rs.8 billion fund will be created at the State Bank of Pakistan to provide loans to low-income segments through microfinance banks;

• In order to facilitate transactions through mobile banking, e-gateway systems, mobile banking, the Government is establishing a state-of-the-art e-gateway systems at the State Bank of Pakistan at a cost of Rs.200 million. Technical training and handholding of the service delivery organisations shall also be undertaken through this project;

• Exemption from withholding tax on Cash Withdrawals by Branchless Banking Agents- exemptions on withholding tax will be given on withdrawal of cash from branchless banking;

• Pakistan Micro Finance Investment Company: The Government of Pakistan in 2016 launched Pakistan Microfinance Investment Company (PMIC) jointly with DFID and KFW to augment the availability of capital for Micro Finance institutions. It is estimated that this will lead to doubling of small loans;

SMALL AND MEDIUM ENTERPRISES

• Establishment of Risk Management Facility

• Innovation Challenge Fund

• Secure Transaction for moveable property

SALES TAX REFUND

• Sales tax refunds: All the pending sales tax refunds whose RPOs have been sanctioned by 30th April 2017 shall be paid in two parts. RPOs upto the value of Rs.1 million will be paid till 15 July, and the remaining RPOs will be paid till 14th August 2017