Thursday Jun 10, 2021
ISLAMABAD: The Pakistan Tehreek-e-Insaf government on Friday will present its third budget, for the fiscal year 2021-22, with an estimated outlay of around Rs8 trillion, state-owned news agency APP reported.
The National Assembly is already in session where the budget would be presented on Friday.
Like last year, the budget for the upcoming year has been formulated considering the impact of COVID-19 on the people and businesses, and will have the aim of mitigating people’s sufferings, reforming the agriculture sector, promoting industry and businesses, APP said, quoting official sources.
“The government of Pakistan is firmly committed to presenting a pro-people, business-friendly and growth-oriented Federal Budget FY 2021-22. The government will pursue an all-inclusive, sustained and robust economic growth, through short, medium and long-term economic planning,” the sources said.
In addition to fiscal management, revenue mobilisation; measures for economic stabilisation and growth; reduction in non-development expenditures; boosting exports; job creation; and people friendly policies for the socioeconomic prosperity of the country would feature in the budget.
It would also focus on social sector development besides introducing reforms for improving governance and boosting private sector investment.
The government has set a 4.8% GDP growth target for the financial year starting July 1, Minister for Planning, Development and Special Initiatives Asad Umar has said.
On the revenue side, though no new taxes would be introduced, the government would introduce measures to bring improvements in the tax collection system, broaden the tax base, and facilitate tax payers, sources said, adding that revenue generation will play a crucial role in achieving the targets for economic growth.
The government is likely to set the revenue collection target at Rs5.8 trillion for the fiscal year 2021-22.
Meanwhile, Minister for Finance Shaukat Tarin launched the Pakistan Economic Survey (2020-21), which highlighted that the country’s economy was on a growth trajectory and witnessed 3.94% growth despite the negative impacts of the coronavirus pandemic, which had hit the world economies hard.
Tarin said the government made far-sighted decisions, in which the prime minister's smart lockdown policy played an important role.
He said that government gave incentives to the construction sector during the coronavirus outbreak, adding that 20 million people had lost their jobs due to the virus' impact on the economy.
The finance minister said that during such a crisis for the economy, remittances were like "divine help" and the country's current account deficit is in surplus.
"Foreign exchange reserves, which were $7 billion in 2018, are now $16 billion," Tarin said.
He said that Pakistan's monthly growth in the last three to four months has been "more than 50%".
Speaking of the progress made with the Financial Action Task Force, he said he "cannot predict that Pakistan will come out of the grey list and into the white list".
He lauded Pakistan's inclusion into international online retailer Amazon's seller list.
Speaking on the debt front, he said Pakistan's outstanding payments have risen by Rs1.7tr, half of the Rs3.7tr figure witnessed last year.
Tarin said that in tomorrow's proposed budget, the poor will be the government's "number one priority".
He said the government will also take steps to facilitate the Small and Medium Enterprises (SMEs).
"We have to give our society a social safety net," he said.
Tarin said the government will see to the increase of production in agriculture and will be introducing commodity storage.
The finance minister said that the financial sector will undergo restructuring and spoke of a greater focus on regional banks being established.
Tarin also said that a board will be formed to improve the privatisation process.
The finance minister said that the government will not raise electricity tariffs, or income taxes and that this was communicated to the International Monetary Fund, with whom negotiations are underway.
"We have told them we will provide them an alternate plan."
He said that the IMF has stressed on the need for a robust growth and that the government desires the same.
Tarin said the IMF was told the government will pursue other avenues for revenue generation and will not burden the poor or the salaried class.
Meanwhile, Minister for Industries and Production Khusro Bakhtiar said that to reduce production costs, subsidies will have to be provided. He added that subsidies in the agricultural sector will also have to be provided.
Adviser to the Prime Minister on Commerce Abdul Razak Dawood said that this year will see a reduction of tariff duties.
— With additional input from APP.