ISLAMABAD (APP/Web Desk) – Finance Minister Ishaq Dar presented the Federal Budget 2015-16 in the National Assembly on Friday, eying an ambitious economic growth target of 5.5 percent.
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Federal Finance Minister Ishaq Dar presented the federal budget with a size of Rs4.272 trillion for the upcoming year at National Assembly this evening. The budget envisions the tax collection target at Rs3.1 trillion.
Rs1.5 trillion worth of annual development program has been approved for the next fiscal year. Meantime, Rs700 billion has been specified for federal development projects.
The provinces will be issued Rs814 billion. Amount of Rs194 billion has been put aside for Pak-Sino Economic Corridor.
Rs780 billion will be set aside for defence; Rs1.31 trillion for debt-servicing; and Rs11.1 billion has been fixed to be spent on health.
HIGHER EDUCATION COMMISSION
Higher Education Commission will receive Rs20 billion. Export target has been set at Rs25.5 billion with GDP growth target fixed at 5.5 percent.
SALARIES OF FEDERAL EMPLOYEES
The federal budget also proposes to give ten percent raise in salaries of the government employees.
Rs654.188 million have been allocated for Cabinet Division in the Public Sector Development Programme (PSDP) for five ongoing and two new schemes.
According to the budgetary document, the government has earmarked Rs20 million for the new project while Rs634.188m have been allocated for ongoing projects.
PARLIAMENT HOUSE SECURITY
However a sum of Rs 27.042 million have allocated for security arrangements at Parliament House building, Islamabad.
SCHOLARSHIPS FOR RURAL STUDENTS
The government has allocated Rs125m for scholarships to rural students for 2015-16.
Rs71.5 billion allocated for education
Rs71.5 billion have been allocated for higher education, 14% more than the previous year.
Also read: Dar presents Federal Budget for 2015-16
The target of growth rate in agriculture has been set at 3.9 percent with production target in the industrial sector pegged at 6.1 percent.
Rs1,500m have been allocated for the development of agriculture sector for the financial year 2015-16. Rs1.4 billion for the completion of 16 on-going projects and 90m for 7 new schemes in the agriculture sector.
MORE FUNDS FOR DEFENCE PRODUCTION
Rs900 million have been allocated for completion of ongoing schemes under Public Sector Development Programme (PSDP) for Defence Production Division. The total cost of the projects is Rs5.640b while Rs3.727b have already been spent on the project.
Another amount of Rs900m has been kept for the completion of installation of Ship Lift and Transfer System and associated machinery and equipment to provide docking and repair facilities to Surface Ship, submarines and commercial vessels upto 7781 tonnes.
SCOPE OF BISP EXTENDED
The government has also increased the scope of Benazir Income Support Programme (BISP) from 97 billion to 102 billion. The funds for Pakistan Baitul Maal has also been doubled to Rs 4 billion from Rs 2 billion.
LOANS FOR SOLAR TUBEWELLS
Dar says loans will be given out for solar-powered tubewells on low markups, and will significantly reduce costs for farmers who have to run tubewells on diesel-powered generators.
RAILWAYS BUDGET 2015-16
A total of Rs78 billion has been allocated for Pakistan Railways, of which Rs41b has been allocated for development programmes and Rs37b for employees.
Duty on Mobile Phones Abolished
Federal Minister for Finance and Revenue Ishaq Dar announced that regulatory duty on mobile phones would be abolished in the next fiscal year (2015-16).
The minister, in his budget speech, said sales tax on import of different mobile phones had been raised from Rs150, 250, 500 to Rs. 300, 500 and 1,000 respectively.
He said on appliance of new tariff, the regulatory duty on mobiles had been abolished.
Rs321 million for Pakistan Nuclear Regulatory Authority (PNRA)
Rs3.900 billion for the new development scheme and completion of ongoing projects
Rs165 million for Textile Industry Division.
Rs 20.88 billion allocated for health
Rs 20.88 billion have been allocated for health.
Markup rate of Business Youth Loan Scheme reduced to 6%
Markup rate of Business Youth Loan Scheme has been reduced from 8% to 6%.
Rs 39.752 mn purposes for Climate Change Division projects
The government has allocated a sum of Rs 39.752 million under Public Sector Development Project for completion of ongoing and new schemes of Climate Change Division.
Builders (minimum tax) to be exempted till June 30, 2018
Dar also announced that the government would provide medical support to deserving people for treatment of critical diseases under the Prime Minister’s Health Insurance Scheme.
In a budget speech, the minister said that the premium cost of this scheme during year 2015-18 would be Rs 9 billion and initially the scheme would be launched in 23 districts.
He said that during next three years, the area of this scheme would be expanded to provide this facility to 60 percent poor people of the country.
He said that under this scheme, secondary medical coverage would be provided to people of areas of Federal Capital, FATA, Gilgit-Baltistan and Azad Kashmir.
The minister said that to select beneficiaries, Benazir Income Support Program’mes (BISP) score card would be used for this purpose. He said that under PM Youth Business Loan Scheme so far 15,000 loans have been approved while 20,000 applications are under consideration.
He said that under PM youth skill development scheme, so far 20,000 youth have been facilitated while the training process of further 25,000 youth is in final stages.
He said that under PM scheme for provision of laptops, so far 70,000 laptops have been distributed.
He added 700 laptops have been developed at local level through state-of-the-art plant.
Rs100bn allocated for return of TDPs
Rs100 billion has been earmarked for return of Temporarily Displaced Persons (TDPs) to their homes and security enhance in the Budget 2015-16.
According to Dar, TDPs will be sent to their homes enabling them to restart their lives in a dignified manner.
He said the nation has rendered invaluable sacrifices in fight against terrorism but there was a need of long-term efforts for complete eradication of this menace.
Acknowledging the sacrifices of armed forces in the ongoing military Operation Zarb-e-Azb, he said the cowardly activities of terrorists remind that the war against terrorism has not finished yet.
Rs 12 billion were earmarked in the budget 2015-16 to establish universal e-tele centres in the country.
Besides providing e-agriculture, e-commerce and e-learning services, these centres would also ensure SIM card verification and registration, he said during the budget speech in the National Assembly.
The minister said in the first phase all provinces, including Federally Administered Tribal Areas (FATA), 500 tele-centres would be established and for the purpose 217 sites had already been selected.
This programme was near completion and would soon be operational, he added.
Rs2.8bn Fibre Optic Link
Dar said that the government has decided to spend Rs2.8 billion to link remote areas of the country through Fiber Optic Cable.
Dar said 128 tehsils are being linked with this Cable in consultation with all provinces.
He added that a sum of Rs 3.6 billion would be spent on another project of linking unserved and remote areas with advanced ones.
Will Pakistan Meet The Targets?
The shortfall underlines the challenges the government of Prime Minister Nawaz Sharif faces in meeting next year’s forecasts, with daily power shortages curtailing industrial production and abysmally low tax collection.
Even if Pakistan does hit its target, it is short of what the country of more than 180 million people needs, economists said.
Considering our population, to generate enough employment for a growing workforce our GDP (growth) should be around 7 percent plus,” said Muzzammil Aslam of the think-tank Emerging Economics Research.
The government has not given official forecasts of spending and revenues next year, but economists said expenditure was likely to top 4 trillion rupees (around $40 billion).
Dar said recently that Pakistan’s fiscal deficit would fall to 4.3 percent of GDP in the next financial year compared with an original target of 4.9 percent in 2014/15.
He added the deficit could have been narrowed further in 2015/16, but for a major military operation against militants in tribal areas along the Afghan-Pakistan border and the costs of accommodating thousands of people displaced by the violence.
Defence spending next year will be set at 772 billion rupees, including 45-50 billion for the operation, an increase of 10 percent over 2014/15.
One of the biggest challenges facing the government will be to broaden the tax base in a country where only about one in 200 citizens files income tax, leaving the state having to ask donors to fund crumbling schools and hospitals.
With many legislators, ministers and businessmen believed to evade taxes, mustering the political will to push through reform could prove difficult.
Nevertheless, Pakistan’s Federal Board of Revenue has targeted a 19 percent increase in tax receipts to 3,100 billion rupees for 2015/16.
Imports of liquefied natural gas through a new port facility in Karachi should help make power supplies more reliable, although there have been teething problems at the terminal.
Infrastructure projects should be boosted by a $46 billion deal signed with China earlier this year to open up a road and energy corridor between the two countries.