Ishaq Dar unveils Rs14.46 trillion relief-oriented budget, targets 3.5pc GDP growth

Govt projects 3.5pc GDP growth for next fiscal year n Proposes upto 35pc increase in salaries of govt servants n Rs 8.850 billion allocated in PSDP 2023-24 for agriculture sector.

 

ISLAMABAD   -   Pledging no new tax­es, the coalition gov­ernment on Friday presented the annu­al budget for the year 2023-24 in the Nation­al Assembly with a to­tal outlay of Rs 14.46 trillion amid increas­ing pays and pensions, giving incentives to ag­riculture and IT sectors and setting some unre­alistic targets.

The federal govern­ment, in its second an­nual budget, project­ing 3.5 percent GDP growth for the next fis­cal year, has proposed 35 percent increase in salaries of govern­ment servants of Grade 1-16 and 30 percent for Grade-17-22. The gov­ernment has also en­hanced the pensions by 17.5 percent. The minimum wage rate in Islamabad Capital Territory (ICT) has in­creased to Rs32000 per month and enhanced the minimum pen­sions from Rs10,000 per month to Rs12,000 per month. The govern­ment also announced increase in the pension of EOBI from Rs8500 per month to Rs10,000 per month.

Unlike sloganeer­ing by the opposi­tion during the budget speech, Finance Minis­ter Ishaq Dar without  facing any interruption an­nounced increase pays and pen­sions and volume of subsidies after getting approval from the special cabinet meeting. “The government has prepared a re­sponsible budget, not an elec­tion budget,” claimed the min­ister, presenting the last finance bill 2023-24 before the gen­eral polls. Before sharing sa­lient features of the budget, Dar also compared PTI’s govern­ment tenure with the previous PML-N’s government era. Re­nouncing the achievements of the PML-N’s previous govern­ment under Nawaz Sharif, Dar claimed that the in the then gov­ernment was doing well on all accounts, with inflation in sin­gle digits and GDP growth of 6 percent. He blamed the PTI’s government putting the burden of record loans in the entire his­tory of the country.

He started his speech by blam­ing the PTI, the Ukraine war, and the 2022 flash floods for the country’s financial woes. About 9 May mayhem, Dar demand­ed that people who attacked military installations on May 9 should be held accountable for their actions. “People like these are not worthy of mercy.”

Finance Minister has fur­ther announced some relief for the civil servants. He said that mileage allowance has been enhanced by 50 percent, while additional charge/cur­rent charge/deputation allow­ance is being increased from 12,000 to 18,000 rupees. Or­derly allowance is being en­hanced to 25,000 from 17,500 rupees. There is an hundred percent increase in the special conveyance allowance for dis­abled raising the amount from 2000 rupees to 4,000 rupees. He said that constant attendant allowance military has been en­hanced to 14,000 from 7000 ru­pees. The government will pay the debts of widows up to Rs1 million through House Building Finance Corporation (HBFC) while the deposit limit in na­tional savings accounts for mar­tyrs is being increased from Rs5 million to Rs7.5 million. He said that the Behbood Savings Cer­tificate deposit has been pro­posed to increase to Rs7.5 mil­lion from Rs5 million.

The total outlay of the bud­get is Rs14.46 trillion with defi­cit of 6.5 percent of the GDP (Rs6.9 trillion). The govern­ment has fixed the tax collec­tion target of Federal Board of Revenue (FBR) at Rs9.2 trillion in which provinces would re­ceive Rs5.276 trillion under di­visible pool. Non tax collection target has set at Rs2.9 trillion. In expenditure, the government has allocated Rs7.3 trillion for interest payment, Rs1.150 tril­lion for Public Sector Develop­ment Programme, Rs1.8 trillion for defense, Rs761 billion for pensions, Rs714 billion for civ­il government expenditures and Rs1.074 trillion for subsidy for the next fiscal year. 

Finance Minister said that the government is not imposing any new tax in the budget. Howev­er, he informed that the govern­ment would tax the rich and af­fluent class. He further said that the 10 percent super tax was im­posed on 15 businesses and sec­tors earning up to Rs150 million in the last budget. He said mea­sures had been proposed to con­vert the super tax into progres­sive taxation by increasing its tax percentage. He said that an amount of Rs10 billion has been allocated for the laptop scheme during the next fiscal year. Mean­while, he said Rs5 billion are be­ing set aside for promotion of professional sports in schools and colleges. He announced to decrease the concessional tax on SME sector from 39 percent to 20 percent. The facility will be available till June 30, 2025. The government has also announced to re-launch the Assan Finance Scheme along with the proposal to start Credit Rating Agency. He has also announced the estab­lishment of the Export Council of Pakistan (ECP) and sales tax re­lief for online market place. The minimum tax on listed compa­nies has been decreased from 1.25 percent to 1 percent.

Talking about agriculture sec­tor, Ishaq Dar said that the limit of agri credit is being enhanced to Rs2250 billion from Rs1800 billion of the outgoing fiscal year. The government has allo­cated Rs30 billion for shifting fifty thousand agriculture tube wells to solar energy. He said all taxes and duties on import of quality seeds are being abol­ished. Similarly, custom duty on saplings is being waived off. Combined harvesters are being exempted of all duties and tax­es in order to promote their use in the field. He said that seeders, rice planters and dryers are also being exempted from duties and taxes to enhance rice pro­duction. Minister said that Rs5 billion has been earmarked for provision of concessional loans for agro industry. Under Prime Minister’s Youth Business and Agriculture Loan Scheme, small and medium loans will be is­sued on easy installments. For this purpose, Rs10 billion has been earmarked for mark-up subsidy for the next fiscal year. Six billion rupees has been set aside for subsidy on import­ed urea fertilizer. Small farmers will be provided with loans on low markup with the partner­ship of provincial governments. For this purpose, a substan­tial amount of Rs10billionto in­crease agriculture production.

He said the turnover threshold of Small and Medium Industries has been increased from 250 million to 800 million rupees by increasing the tax concessions of the SMEs. He said SMEs Assan Finance Scheme has also been restored while establishing a Crediting Rating Agency for the SMEs has also been proposed. Ishaq Dar said two percent ‘Fi­nal Tax’ for purchasing Immov­able Property, under Foreign Re­mittance by Overseas Pakistanis is also being abolished.