Pakistan Budget – salient features – finance minister assertions

ishaq-dar· The finance minister of newly elected government is unveiling FY14 budget with probable outlay of Rs 3.475trn.

· The budget deficit is expected to be Rs 1.6trn which is 6.2% of GDP.

· FBR collection is estimated at 2.475trn

· Rs.150bn is expected to be earmarked for power sector woes.

· The defence expenditure is expected to be lower i.e. Rs 627bn.

· A major portion of outlay of Rs 3.457trn will be earmarked for interest payment i.e. Rs 1.15trn.

· Government is set to allocate Rs 540bn for PSDP which is 50% higher than last year.

· The financing of budget deficit would be through domestic sources such as Rs 892bn through bank borrowing and Rs486bn through non- banking channels.

· As for the revenue side only Rs 81bn is expected through privatization proceeds which is very less to ward off budget deficit.

· The GDP growth is envisaged at 4.4% with 3.8% contribution from agriculture sector 4.5% from manufacturing and 4.6% from services.

· The current account deficit is estimated at 1.1% of GDP.

· The finance minister has given an olive branch by saying that chronic circular debt of Rs 503bn shall be repaid/ resolved in 60 days. But electricity prices would be increased in phase wise manor by Rs.6/ unit.

· At present economy has grown only by 3% wherein agriculture has grown by 3.3% and industries at abysmally low of 2.9%.

· Finance minister said that Pakistan has lost $100bn in war against terror.

· The tax to GDP ratio is shamefully low at 9%.

· Foreign exchange reserve with SBP is reduced to $6bn which is an alarming situation.

· Now the next budget deficit target is envisaged at 4.7%.

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