PML-N govt presents sixth budget as opposition walks out in protest

ISLAMABAD: Finance Minister Miftah Ismail on Friday presented the sixth budget outlay of Rs5,932.5 billion amid a strong protest from the opposition benches against the full-year financial planned despite the incumbent government's remaining tenure of three months.

"This is a historic moment for the Pakistani nation and Parliament. Despite difficulties, our government achieved the highest growth rate and economic stability in thirteen years. The entire nation and Parliament deserve to be congratulated on this achievement."

"Mr Speaker, it is the sacred duty of this government to present the budget for the new fiscal year. Parliament is obligated to debate on the presented budget and pass it before the end of its tenure."

"The government cannot function for even a day without the approval of the budget. Passing the federal budget is also necessary because, without the estimate of the federal revenues, the provincial governments cannot make their own budgets and neither run their affairs."  

"Passing the budget is necessary for the machinery of government to continue its operations and ensure economic stability. If the budget isn't passed, the local and foreign businesspersons will be unable to make their plans."   

"We would not interrupt the 5.8 percent growth rate that we have achieved, however, the incoming government will have the right to make amendments to the preferences in the budget."

"Mr Speaker, the budget presented today represents the vision of Mian Nawaz Sharif and the hopes of the Pakistani nation, the majority of which elected him as the prime minister in 2013. We are missing him in this house today." 

Ismail told the house that the government had been handed over a destroyed economy in 2013-14. Development and investment were less, while inflation and fiscal deficit were significant problems were significant factors that needed to be dealt with. He said, the foreign exchange reserves were the lowest in Pakistan's history and the country was on the verge of bankruptcy.  

The government's total budgeted expenditure of Rs 5.246 trillion was announced, with the tax revenue and FBR revenue targets set at Rs 4.88 trillion and Rs 4.435 trillion. 

The development budget for FY18-19 was set at Rs 1.067 trillion, while Defence Affairs and Services was allotted Rs 1.1 trillion. The Federal Public Sector Development Program and Interest Payment budgets were set at Rs 800 billion and Rs 1.62 trillion respectively. For pension payments and subsidies, the government set aside Rs 342 billion and Rs 174 billion. 

Key targets of FY18-19 budget strategy

⯈ Real GDP growth rate of 6.2%

⯈ Inflation to remain below 6%

⯈ Tax to GDP ratio of 13.8%

⯈ Budget deficit of 4.9% of GDP

⯈ Budget deficit of 4.9% of GDP

⯈ Net Public Debt at 63.2% of GDP

⯈ Foreign exchange reserves at $15 billion

⯈ Continuation of social protection programmes

Revenue 

The government set the total tax revenue at Rs4,888.6 billion, of which the Federal Board of Revenue (FBR) taxes comprise Rs4,435 billion. 

The FBR target is to be achieved through tax administration and compliance and not through any new tax measures. The tax base will be enhanced while tax rates will be reduced.

To accelerate economic growth, the government announced a 5-point economic reform package through which taxes have been lowered for all tax brackets. The government expects the tax net to see a considerable increase as it estimates the revenues from direct taxes to increase next year. 

Expenditure 

Total expenditure for 2018-19 was announced at Rs5,246 billion. There is an 8 percent increase in the expenditure, as compared to the revised estimates of Rs.4,857 billion for 2017-18.  

The current expenditure has been estimated at Rs4,780.4 billion, while development expenditure is set at Rs1,152.1 billion.

Public Sector Development Programme

The size of the FY18-19 Public Sector Development Programme (PSDP) was estimated at Rs1,650 billion. Of the total PSPD budget, Rs850 billion was allocated to the provinces. 

The federal government was allocated Rs800 billion in the budget.

"Investments in the water, road infrastructure, electricity sector and China Pakistan Economic Corridor (CPEC) would be protected," said Ismail.

"Additional resources of Rs 230 billion will be financed through autonomous organisation, Public Private Partnership, and other means. Investments in the water, road infrastructure, electricity sector and China Pakistan Economic Corridor (CPEC) will be protected," he said. 

Defence 

The defence budget for FY18-19 was proposed at Rs 1,100 billion — a  19.5 percent increase against the provisional Rs 920 billion in 2017-18. 

 

Opposition reservations

Prior to Miftah's presentation, Opposition leader in the National Assembly Khursheed Shah said the government did not have the right to present the budget for the full year. Shah also expressed reservations over the appointment of Miftah Ismail as finance minister.

Pakistan Tehreek-e-Insaf (PTI) leader Shah Mehmood Qureshi was also critical of Miftah’s appointment, stressing that the government was setting a bad example by having someone present the budget who was not an elected official.

“It was the cabinet’s decision for Miftah Ismail to present the budget and there is nothing unconstitutional in that,” Prime Minister Abbasi replied to the opposition.