- Govt sets economic growth target at 4.8%
- Minimum wage raised to Rs 20,000
- No new tax imposed on salaried class
- Pensions, federal govt employees’ salaries will see a 10% increase
By Hamid Khan Wazir
ISLAMABAD, Pakistan: Amidst ruckus by the opposition, the Finance Minister Shaukat Tarin announced a pro-people, business-friendly, and growth-oriented Federal budget for the Fiscal Year 2021-22 with a total outlay of Rs 8,487 billion, fixing a 4.8 percent growth target for the next financial year.
Shaukat Tarin kicked off his budget speech by stating that the biggest challenge for the incumbent government was to bring the national economy back on the path of recovery.
However, the finance minister was greeted by jeers from the Opposition benches, with members shouting slogans and taunting him by laughing loudly as he praised Prime Minister Imran Khan’s economic initiatives.
The finance minister said the main objectives of the budget are to strike a balance between fiscal deficits due to COVID-19 and boosting the growth of the economy besides keeping a primary balance at a sustainable level.
Click Here to Download Federal Budget 2021-22 (Urdu)
The minister said that the current account deficit was at a historic high of US$ 20 billion but the government through its prudent policies managed to drag the economy out of trouble. He said that the budget deficit was at a high of 6.6% and the foreign exchange reserves were at a critical level of US$ 10 billion at the end of Pakistan Muslim League-Nawaz’s (PML-N) tenure. However, the situation has now improved.
Shaukat Tarin said that the gross revenues for the next fiscal year have been estimated at Rs 7,909 billion compared to the revised estimate of Rs 6,395 billion for the outgoing fiscal year. He said that the FBR revenues are projected to grow by 24 percent from Rs 4,691 billion to Rs 5,829 billion.
Tarin said that the government was introducing third-party audits which would thwart the FBR from harassing any individual or business entity.
The finance minister said that the provincial share in federal taxes would increase from R. 2,704 billion last year to Rs 3,411 billion. He said that the minimum wage will be raised to Rs 20,000 to mitigate the inflationary pressures on the low-income groups. He said that subsidies are projected at Rs 682 billion up from Rs 430 billion.
Shaukat Tarin said that the prime minister wanted to change the course of history by uplifting four to six million low-income households through a bottom-up approach from next year. He said that every household will be provided Rs 500,000 interest-free business loans. Every farming household will be given Rs 2,050,000 interest-free farming loan and Rs 200,000 for tractors and machineries. These families will be provided with low-interest housing loans up to Rs 2 million so that they can build their houses. Every household shall be provided with a Sehat Card.
Through this action, we are giving a comprehensive package to the low-income group people, which is an essential requirement of Imran Khan’s promise of Riyasat-e-Madina.
Defence spending will be Rs.1.37 trillion in the upcoming year.@ImranKhanPTI @PTIofficial @GovtofPakistan @FinMinistryPak @OfficialRadioPK @PTVNewsOfficial @appcsocialmedia @faiqsadiq #Budget2021 pic.twitter.com/8ObgByS2Ol
— Shaukat Tarin (@shaukat_tarin) June 11, 2021
The finance minister said that the defense budget of the country had been allocated Rs 1,370 billion while the government had earmarked Rs 1,168 for development and non-development grants for provinces, besides proposing Rs 260 billion for Ehsaas Programme.
Tarin announced the grant of 10 percent adhoc relief allowance for all the federal government employees and 10 percent increase in pensions.
The minister said that they are endeavoring to make CPEC a platform where industries will be relocated. This, he said, will provide employment opportunities and bolster our exports.
Shaukat Tarin said that the government is providing a subsidy of Rs 300,000 for low-income households to enable them to build their own houses. He said that banks are participating in a financing programme, which has so far attracted applications of over Rs 1 billion. He said that Rs 12 billion were being allocated for various agri-related initiatives.
Tarin said that a total of Rs 91 billion was proposed in the budget for ensuring water security, excluding hydel energy generation projects, Rs 57 billion is being allocated for the Dasu Hydropower project, Rs 23 billion for Diamer-Bhasha, Rs 6 billion for Mohmand Dam while Rs 14 billion has been allocated for Neelum-Jhelum hydropower project.
— Shaukat Tarin (@shaukat_tarin) June 11, 2021
For the telecom sector, the Federal Excise Duty (FED) has been reduced from 17% to 16% while withholding tax will be reduced by 40%.
Moreover, the Withholding Tax (WHT) from 12 documented sectors to be withdrawn, which include banking, Pakistan Stock Exchange, margin financing, air travel services, international transactions from debit and credit card, he added.
The minister further added that the WHT on mobile phone services has been reduced from 12% to 10%. The government plans to further reduce taxes on mobile phone services to 8%.
Furthermore, capital gains tax reduced from 15% to 12.5% while Capital Gains Tax (CGT) reduced from 15% to 12.5%. Tarin also revealed that the government plans to further reduce CGT in years to come.
The finance minister concluded his speech by saying that all citizens will benefit in some way from the budget.