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Budget 18-19: Govt slashes PSDP, raises defence spending to Rs1.1 trillion.

The outgoing PML-N government's newly appointed Finance Minister Miftah Ismail is presenting a sixth full-term budget in the National Assembly on Friday amid opposition protests calling for a budget covering only the remaining three months of the federal government's tenure."This is a historic moment for the parliament that the 6th budget is being presented.

A government cannot run for a day without the budget. The provincial government's cannot decide their budgets without approval of the federal budget," Ismail explained.

"We cannot interrupt the 5.8 per cent GDP growth.

However the next government will have the right to make changes to the budget," he assured the opposition."Today's budget is a reflection of Nawaz Sharif's vision.

We are missing him here today.""In 2013 the PML-N government came to power and set up a programme for the economy.

We faced certain challenges under the leadership of Nawaz Sharif. Serving the public was our only motivation," he added.

During Ismail's address, members of the opposition continued their protests through uninterrupted chanting. They surrounded his dias and threw papers in the air.

Opposition members ripped apart copies of the budget while PML-N members encircled Ismail's dias to keep the protesters at a distance.Explore:'GDP to grow 5.

8pc in FY17-18': PML-N govt unveils election year report cardThe budget speech began with the finance minister recounting the government's new tax package, through which it has lowered tax rates considerably.Ismail said the government is using data mining and other technologies to catch tax thieves.

"We have given people one last chance to declare their domestic assets. We will catch them and prosecute them if they do not avail our tax amnesty package," he asserted.

"Due to high economic growth in the last five years, the size of the economy has increased unusually. It has risen from Rs22,385 billion in 2013 to Rs34,396 billion in 2018. The per capita income during this time has risen from Rs129,005 to Rs180,204," Ismail announced.

Budget 18-19brAccording to a copy of the Budget 18-19, the total budgeted outlay has been set at Rs5,661bn from Rs4,992bn, which is a 13.4pc increase.The target GDP growth rate for the upcoming fiscal year has been set at 6.

2pc against FY17-18's target of 6pc.The total tax target is Rs4,888.6bn, of which the FBR taxes comprise Rs4,435bn.

"This target will be achieved through improved tax steps and improved tax administration. The tax base is being expanded and the per cent of tax is being reduced," the finance minister said.

The non-tax revenue target has been set at Rs1,246bn, according to a copy of the budget 18-19.The provincial share in tax revenue will be increased from Rs2,316bn to Rs2,590bn, Ismail added.The defence budget has been set at Rs1,100bn from a revised budget estimate of Rs999bn in the previous year 19.4pc of the total budgeted outlay, while the PSDP has been slashed to Rs800bn for FY18-19.The government also intends to restrict the overall fiscal deficit to Rs1890.2bn or 4.

9pc of the GDP, down from the revised estimates for the year 2017-18 which stood at 5.5pc, and inflation to below 6pc, Ismail said.

The government estimates forex reserves to come to about $15bn in FY18-19.The target tax to GDP ratio is 13.8pc, while the target net public debt to GDP ratio 63.2pc, the finance minister announced."The objective of the medium term macroeconomic policy, besides improved economic growth, is to correct the balance in the external account," Ismail said.

"The fiscal deficit will be reduced in the next three years and the environment for investment will be improved.""The government will continue investment in social protection and the Benazir Income Support Programme, and will take steps for the underprivileged communities through targeted subsidy schemes.

Rs125bn has been allocated to the BISP, while Rs189bn has been set aside for total subsidies. Rs10bn has been proposed for PM's Youth Scheme," he said.

Agricultural production is slated to increase, Ismail said, with the government intending to continue implementing an agricultural policy in FY18-19 "until we end the tradition of subsidies".Loans to the agriculture sector will increase to Rs1,100bn, he said.

"A second green revolution is needed for advancement in the agriculture sector," the minister explained. "The next federal government will leave all decisions regarding subsidies to the provincial governments while the federal government's focus will be on providing a favourable environment for research and development, an increase in production, access to markets and improvement in technology.

""I am happy to announce that while we had proposed a 3pc sales tax on fertiliser, the PM has approved sales tax of 2pc only on the recommendation of Sikandar Bosan, the food security minister.""The government wants to introduce renewable energy in all sectors," Ismail added.

"It is proposed that the 16pc duty on charging stations for electric cars be ended."In the aftermath of the 7th NFC, the provinces have been issued an extra Rs2,500bn in eight years, and the federal government will have a reduced share in the NFC, he said.

Karachi packagebrThe government announced a Rs25bn special package for development in Karachi.A large-scale desalination plant will be set up in Karachi to end the city's water woes, Ismail said.

Rs5bn will be allocated for the construction of roads, fire brigades and bridges in the coming fiscal year. Rs8bn will be set aside for expansion of the Expo Centre, he added.

Packages for childrenbrA special package called the 100,100,100 programme focusing on children's development was announced by Ismail. Under the package, the government is targeting 100pc admission, attendance and graduation of children in schools.

The government will pay for the transportation of female students to school, he added."This is a promise made by the Parliament to the people of Pakistan.

We have failed for the past 70 years, but it will not happen anymore, although education is a provincial subject," Ismail asserted.Another special package amounting to Rs10bn along with a supplementary grant was announced for children's health.

"40pc of children experience stunted growth," the finance minister said. "It will be tolerated no more," he said, adding that stunting would end by 2020. "This is the prime minister's promise.

"Review of PML-N's performancebr"Today we are the 24th largest economy in the world," Ismail told the lower house."The GDP growth rate was 5.

4pc last year it has now grown to 5.8pc, the highest in 13 years," he recalled.

"In the last five years, inflation has been kept below 5pc which was up to 12pc when we took over. The budget deficit will remain restricted to 5pc this year," he said.

"The State Bank policy rate was 5.7pc which was the lowest in decades, coming down from over 9pc.

The lowest interest rate in history has brought an increase in businesses" he explained."Exports have been under pressure Imports have increased 17pc because of high machinery imports," he said, adding that the current account deficit had increased Rs12bn in the first nine months of FY17-18."The government has made all efforts, and I am sure that foreign exchange reserves will be higher in June than they are today.

In the ongoing year, foreign investment has risen from $1.9bn to $2.1bn."
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Publication:The Balochistan Express (Quetta, Pakistan)
Date:Apr 27, 2018
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