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Govt makes history by presenting 6th growth oriented budget with outlay of Rs5.932 trillion, targeting 6.2 growth rate.

ISLAMABAD -- The Pakistan Muslim League-Nawaz (PML-N) government Friday made history by presenting its sixth consecutive federal budget for the fiscal year 2018-19 with total outlay of Rs5.932 trillion, providing substantial relief to the masses and paving way for realizing the objectives of inclusive and sustainable economic growth through a vast array of measures.

'It is my honour to present today the sixth budget of the PML(N) government to this Parliament. It is indeed a historic moment for the nation and the Parliament to celebrate,' Federal Minister for Finance, Revenues and Economic Affairs, Dr Miftah Ismail said while delivering his budget speech at the National Assembly.

'Despite challenges, we have achieved a highest growth in 13 years, low inflationary environment, and overall macro-economic stability,' he added.

Presenting the budgetary proposals for FY 2018-19, he spelled out major economic benchmarks for upcoming fiscal year, including the real GDP targeted to grow at 6.2%, setting target of inflation below 6 percent, tax to GDP ratio to 13.8% and budget deficit to 4.9%.

The budget also aims to contain net public debt at 3.2 % of GDP, with foreign exchange reserves to remain at $15 billion besides announcing continuation of social protection programmes while FBR tax revenue target has been proposed at Rs.4,435 billion.

After transfer to provincial governments, the net revenue of the Federal Government is estimated at Rs 3,070 billion in 2018-19 as compared to revised estimates of Rs 2676 billion in the current financial year.

Miftah said, the government macroeconomic policy aims to address the imbalances of external account, while protecting economic growth.

Over the medium-term he proposed to continue reduction of fiscal deficit, maintain a cautious monetary stance, and embark upon next generation of reforms for strengthening investment climate, export promotion, and energy sector.

Total federal expenditure for 2018-19 is budgeted at Rs 5932 billion, compared to the revised estimates of Rs4857 billion for 2017-18, showing an increase of 8 percent.

The minister announced a 10 percent ad-hoc relief allowances to civil and armed forces employees and also proposed 10 percent increase for pensioners across board.

The size of Public Sector Development Programme (PSDP) for FY 2018-19 has been put at Rs2043 billion including Rs1030 billion for federal PSDP and Rs1013 billion for provinces.

The resource availability during 2018-19 has been estimated at Rs4,917.2 billion against Rs4,713.7 billion last year while the net revenue receipts for 2018-19 estimated at Rs3070.4 trillion indicating an increase of 4.9% over budget estimates of 2017-18.

The defence budget has been proposed at Rs.1,100 billion against the revised budget of Rs.999 billion in the 2017-18.

The Prime Minister's Youth Scheme will continue and for this purpose, Rs.10 billion have been allocated.

The minister also announced uniform rate of GST on all fertilizers, reduction in GST on agriculture machinery from the current 7 percent to 5 percent, enhancing cotton production and quality, tariff subsidy on agriculture tube wells.

The Government is proposing setting up an Agriculture Research Support Fund with an initial allocation of Rs.5 billion and Agriculture Technology Fund.

The minister said the tax rates on individuals have been reduced and complete tax exemption has been given to people who earn upto Rs.1,200,000 per year or Rs.100,000 per month.

This exemption limit, which was previously Rs.400,000 per year has been increased three times to Rs.1,200,000 per year. Tax will be levied at the rate of 5 percent for income between two and 400,000 monthly. People earning above 400,000 monthly will be taxed at the rate of 15 percent.

Miftah said another new programme '100 100 100' will be launched to ensure 100% Pakistani children are enrolled in schools.

Other notable programmes include Rs 10 billion to address the problem of child stunting, Rs 35 billion for Railways with a plan to increase the speed of trains from Peshawar to Karachi by 3 times from 55 km to 160 km by hour by 2021.

The government in five years added 12,230 MW to the national grid and will invest a further Rs 138 billion in power sector while Rs 310 billion will be spent on construction of motorways.

The minister said that Rs 44.7 billion is proposed for AJK and Gilgit Baltistan and Rs 24.5 for Federally Administered Tribal Areas (FATA).

Rs 10 billion has been approved to implement a ten year development plan for FATA and Rs 90 billion for rehabilitation of millions of people who had to leave their homes in the areas of military operations.

The government is enhancing PSDP allocations for Higher Education Commission to Rs 57 billion and will allocate Rs 37 billion for primary health programmes and Rs 10 billion for youth programme. Rs 137 billion are proposed for development of Gwadar port.

Highlighting achievements of the government before the parliament, Miftah said that government achieved GDP growth of 5.4% which was the highest growth rate in last 10 years while this year growth is projected at 5.8% which is the highest in last 13 years.

He said that the size of the economy expanded from Rs.22,385 billion in FY2013 to Rs.34,396 billion in FY2018, while per capita income increased from Rs.129,005 in 2013 to Rs.180,204.

He said agriculture sector has shown the highest growth in the past 18 years of 3.8% owing to government initiatives. The Industrial production grew by 5.8%, which is highest growth in a decade while the services sector, which includes banking, retail, transportation etc. witnessed a remarkable growth of 6.4%, highest in decade.

Miftah said, inflation has been curtailed to less than 5 percent in the past five years, compared to 12 percent between 2008-13.

He said in FY2013, fiscal deficit was 8.2% of GDP which has now reduced to below 5.5% of GDP while in FY2013, FBR tax collection was Rs.1,946 billion which is now projected to increase to Rs.3,935 billion, a two times increase in 5 years.

The policy rate came down from 9.5% in June 2013 to 5.75% in 2017, which was lowest in many decades.

Exports from the country have increased by 13% in the first nine months of this year and 24% in March on shipment basis while imports during the first nine months increased by 17% when compared with the same period last year. Higher imports are mainly driven by an increase in import of POL products, machinery and raw materials.

Foreign Direct Investment increased to $2.7 billion in FY2017 from $1.3 billion in 2013. During the first nine-months of the current fiscal year, it has increased to $2.1 billion as against $1.9 billion during the same period last year.

Remittances by Pakistani's abroad jumped from only $13.9 billion in 2013 to $19.3 billion last year. This year In-Sha-Allah, we expect to end the year at more than US$20 billion which will be a record for Pakistan.

The foreign exchange reserves increased from US$6.3 billion to US$19.4 billion by October 2016.

He said a total of US$223 billion were invested in the economy from both domestic and foreign sources over the five years as compared to US$140 billion during 2008-13.

He said, during the last sixty-six years of Pakistan's history, a total of 20,000 megawatts of generation capacity was added. In a short-term of five years, we have added 12,230 megawatts of new generation capacity.
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Publication:Balochistan Times (Baluchistan Province, Pakistan)
Geographic Code:9PAKI
Date:Apr 28, 2018
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