ISLAMABAD, May 26 (APP): With new initiatives alongwith
relief measures for salaried, low and middle income groups,
the PML-N government presented its fifth consecutive budget
with a total outlay of Rs 5.1 trillion, to realize the
objectives of inclusive and sustainable economic growth.
Finance Minister Ishaq Dar while presenting the budgetary
proposals for FY 2017-18 in the National Assembly spelled out
major economic benchmarks for FY 2017-18 including the real GDP
targetted to grow at 6%; bringing inflation below 6%, budget
deficit at 4.1% and tax to GDP ratio at 13.7%.
Ishaq Dar also announced the merger of 2010 adhoc allowance
in the basic salary of federal government employees as well as
10% adhoc relief on revised basic pay.
The armed forces personnel, in addition
to incorporation of 2010 adhoc allowance, would get the merger of
2008 adhoc relief as well in their basic pay.
The federal government pensioners would also get a raise
of 10%, the Finance Minister told the House, adding, on the
pattern of increase in the pay of Government employees the
minimum wage of labourers for their benefit is being increased
from Rs. 14,000 to Rs.15,000 per month.
The size of Public Sector Development Programme (PSDP)
for FY 2017-18 has been put at Rs 2.113 billion including Rs
1,001 billion for federal PSDP as well as the allocation of
Rs 1,112 to the provinces.
He said, the resource availability during 2017-18 has
been estimated at Rs 4,681.2 billion against Rs 4,442
billion in the budget estimates of 2016-17.
The defence budget is proposed at Rs 920 billion for FY
2017-18 against the revised budget of Rs 841 billion in the
FY 2016-17, the Finance Minister added.
Ishaq Dar also unveiled a strategy to achieve targets
that included 14% increase in FBR revenues; 11% growth in
federal expenditures; 7% increase in non-tax receipts and
containing current expenditure below the level of inflation.
He also announced new initiatives for agriculture,
financial sector, exports, textile, social sector and
employment, aimed at boosting economic activity at fast pace.
The Finance Minister also announced tax incentives aimed
at giving facilitation to the agriculture, Small and Medium
Enterprises (SMEs), and Information Technology (IT) sectors.
Finance Minister Ishaq Dar said under the special
initiative in the FY 2017-18, Benazir Income Support Programme
(BISP) beneficiary families, who are willing to start their own
businesses will be provided with training as well as a one-
time cash grant of Rs 50,000 to start their own business and
become productive members of society.
Initially this grant is proposed to be provided to
250,000 families, he added.
In order to facilitate provision of electricity
to remote areas and small cities where there are no
transmission lines, Ishaq Dar said, the Government in
partnership with the World Bank, will introduce solar-powered
off-grid electricity system for residents of small towns and
cities in sparsely populated areas of the country with special
focus on Balochistan.
In the agriculture sector, he said, all previous schemes
and initiatives of the present government including the Kissan
Package announced by Prime Minister Nawaz Sharif in 2015; crop
loan insurance scheme; livestock insurance scheme; concession
of customs duty on dairy, livestock and poultry sector etc
will continue in the FY 2017-18.
The Finance Minister announced that from July 1, 2017,
ZTBL and National Bank of Pakistan will provide agri loans
upto 50,000 to small farmers with holdings of 12.5 acres at a
reduced rate of 9.9% per annum.
In order to facilitate the farmers, the volume of
agriculture credit is being enhanced to Rs 1,001 billion from
the last year’s target of Rs 700 billion which will be an
increase of 43%, he added.
As a further measure to support farmers, the Finance
Minister said, the government has already decided to sell the
existing stock of imported Urea Fertilizer available with NFML
at a concessional Rs 1,000 per bag.
In order to create ease of disbursement of subsidy on
DAP, it has been decided that DAP will be subject to fixed
sales tax. As a result, GST is being reduced from Rs 400 to
Rs 100. This will have a subsidy impact of Rs 13.8 billion, he
added.
Finance Minister Ishaq Dar while giving brief overview
of the previous measures to boost exports announced new
initiatives under which the custom duty on raw-hides and skins
will be reduced to zero; stamping foil used in producing high
value added finished leather will also be exempted from
customs duty.
He said as the rice exporters are facing difficulties in
marketing due to long distances from their potential market,
it is being decided in principle to allow warehousing of rice
outside Pakistan.
For the promotion of housing sector, the Finance
Minister announced that a Risk Sharing Guarantee Scheme would
be launched under which the Government will provide 40 percent
credit guarantee cover to Banks and DFIs for home financing
for up to Rs 1 million, adding, Rs 6 billion have been
allocated for this purpose.
He said Pakistan Infrastructure Bank (PIB) will be
established to provide infrastructure financing for
commercially viable private sector projects. This effort will
be spearheaded by the IFC with a 20% equity of the Government
through PDF, while the remaining share will be provided by the
private sector.
The Bank is expected to assist in introducing innovative
project financing tools such as building domestic
infrastructure bond market and creating contingent financing
products which include credit guarantees, credit default
swaps, foreign currency liquidity facility and refinancing
options, he added.
In order to increase access to financial services for
the vast majority of the people, Ishaq Dar said, a Rs 8
billion fund will be created at the State Bank of Pakistan to
provide loans to low-income segments through microfinance
banks.
He said in order to enable banks to provide financing to
SME sector, the Government is planning to introduce Risk
Mitigation Facility for Small and Medium Enterprises through
Rs 3.5 billion fund to be established in the SBP.
The facility will cater to both Islamic and conventional
banking products, he added.
To cater the requirement of SMEs, the Finance Minister
also announced the establishment of an Innovation Challenge
Fund with Rs 500 million. This fund will be professionally
managed in collaboration with the key technology universities
of Pakistan, he added.
Ishaq Dar while speaking about energy sector said “By
2018 Inshallah 10,000 MW of additional electricity will
become part of the national grid.”
In addition, financial close have taken place for
15,000 MW of electricity generation projects beyond 2018.
In this regard, the government was proposing Rs 401 billion for
power sector development including investment of Rs 317
billion to be undertaken by WAPDA for the next year, he added.
Other than the large hydro power projects, he said, the
government was allocating Rs 38 billion for the development of
water sector.
Key projects such as extension of Right Bank Outfall
drain (RBOD – II), RBOD – I and Kaachi Canal would be given the
largest share in the water sector portfolio, he added.
The Finance Minister said, over the past three years’
the government has focused on building deficient
infrastructure with a view to translate the comparative
advantage into sustainable economic growth.
For the next year, a massive outlay of Rs 320 billion
has been proposed as compared to Rs 188 billion allocated in
the outgoing year, he added.
In line with its policy of improvement railway
infrastructure and services, the government has proposed to
allocate Rs 42.9 billion for FY 2017-18.
Ishaq Dar said during the last four years, the
government initiated far-reaching structural and
administrative reforms for moving towards a more efficient and
equitable tax system.
The comprehensive strategy for medium term period aimed
at increasing tax-to-GDP ratio to a respectable level of 15
percent, he said, adding concessions and tax exemptions above
Rs 300 billion were withdrawn by FBR in three years.
Besides unveiling the revenue measures, the Finance
Minister also announced relief measures in the areas of income
tax, sales tax and customs duty such as rationalization of
corporate tax, incentives for Islamic Banking, reduction of
withholding tax rates on fast moving consumer goods, facility
of revision of withholding tax statement etc.
Ishaq Dar also announced a new welfare schemes for
families of martyrs through the Central Directorate of
National Savings (CDNS). Under this scheme, a guaranteed and
enhanced profit will be given to the families of Shuhada, he
added.
He also announced a scheme for disable persons under
which the allocation of 2% quota for appointment of special
persons in government jobs would be extended to public and
publically listed companies.
Besides, the disabled persons would also be eligible to
invest in Behbood Saving Certificates like pensioners and
widows, he added.
The Finance Minister said budget for Baitul Mal is
proposed to be enhanced from Rs 4 billion to Rs 6 billion.
He said owing to the vision of Prime Minister Nawaz
Sharif and with prayers of the nation, the government has been
able to put Pakistan back on growth trajectory.
“Now we need to further strengthen our economy in order
to take the economy on the path of higher, sustainable and
inclusive economic growth,” he added.
