Federal Budget 2019-20 with Rs 1,863 billion development outlay presented in NA

ISLAMABAD, Pakistan: The Minister of State for Finance Muhammad Hammad Azhar on Tuesday presented the Federal Budget 2019-20, which envisages total development outlay of Rs 1,863 billion for the next fiscal year. 

While announcing the federal budget 2019-20, Hammad Azhar said that size of Federal Public Sector Development Programme (PSDP) has been set at Rs 951 billion, which also includes foreign assistance of Rs 127 billion while besides an amount of Rs 912 billion has been allocated for provincial Annual Development Plans.

The state minister said that during the next fiscal year, the government plans new initiatives such as the district equalization plan, interventions in the agriculture sector to ensure food security, prioritization of construction of mega dams for water conservancy, interventions in the field of knowledge economy and skilled development on the youth.

The minister said that an amount of Rs 210 billion has been earmarked to implement various physical planning and housing initiatives including Urban and Regional Planning Framework, Smart City Plans and Integrated Strategic Development Plans including Prime Minister’s Naya Housing Programme and slum upgradation programme.

Similarly, interventions in the conservancy of environment and improvement in environment through Clean and Green Pakistan and Ten Billion Tree Tsunami Programmes have been initiated.

Hammad Azhar said that the PSDP allocation for Climate Change Sector has been kept at Rs 1102 million for the next fiscal year.

The National Agriculture Emergency Program intends to spend Rs 290 billion in the next five years to boost the sector. The programme will be executed with the coordination of all provinces to ensure productivity of major crops, including wheat, sugarcane, cotton, rice, oil seed crops, improvement of water use efficiency and promoting high value fish farming. It also includes calf saving and promoting backyard poultry.

The minister announced that an amount of Rs 5 billion including foreign aid of Rs 2.4 billion has been allocated for the governance sector in the next fiscal year. Capacity of public sector will be enhanced for improved public service delivery.

The minister said that the budget proposes allocation of Rs 63.5 billion for special areas including merged districts of Khyber Pakhtunkhwa, Azad Jammu and Kashmir and Gilgit-Baltistan.

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Furthermore, a special allocation for Rs 75 billion will be provided for equitable regional development in order to accelerate development of less developed areas and Rs 22 billion are set aside for 10 year development plan of merged districts.

The annual plan aims to improve the capacity of IT sector by enhancing infrastructure facilities, improving skill quality of human resource and accelerating implementation of public E services for citizens.

The state minister further said that in the upcoming year, special emphasis will be made towards a robust advocacy and awareness campaign for adoption of family planning services and encouraging financing of population sector projects.

The minister said that the Higher Education Commission (HEC) has been allocated an amount of over Rs 28,646 million for the ongoing and new schemes in the next fiscal year while the allocation for the projects proposed by “Task Force on Technology Driven Knowledge Development” will be in addition to regular HEC budget.

The HEC budget will be used to transform the universities into world class institutions and encourage innovative ideas of researchers.

The Ministry of Science and Technology has been allocated an amount of over Rs 6231 million, which includes Rs 921 million for ongoing and Rs 5310 million for new projects.

Hammad Azhar said that the government’s planned initiatives for employment and skill development during the next year will help alleviate unemployment in the Country. The plan focuses to provide and promote technical and vocational training by extending geographical access through the public private partnership in market demand trades.

In the health sector, according to the minister, the key initiatives to widen the coverage of health care spending and achieve health targets include increase in the number of paramedical staff, expansion of lady health workers programme, strengthening of primary healthcare with backup of skilled personnel including women, medical officers in basic health units, establishment of health emergency surveillance and response system, implementation of a national plan for vaccination and establishing a health information and disease surveillance system.

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Micro health insurance schemes will be made part of existing social safety nets to extend health coverage to the vulnerable segments of the society.

The minister of state announced 10 percent ad-hoc relief for government employees from 1 to 16 scales and all personnel of defence forces, 5 percent for employees of 17 to 20 grades while no increase has been made for grade 21-22 employees.

The minister said that an amount of over Rs 516 million has been allocated for digitization of production and transmission infrastructure of Pakistan Television (PTV) and Radio Pakistan with thrust on reaching out to far-flung areas of the Country. The services of Radio Pakistan will be expanded to the uncovered areas.

The state minister for finance announced that an amount of over Rs 128 million has been allocated for conservation and promotion of rich and diverse cultural heritage of Pakistan. The annual development plan also envisages upgradation of power transmission and distribution system in order to reduce line losses and check power theft.

Hammad Azhar said that since construction of large take substantial time, quick alternatives will be adopted like construction of medium and small dams.

Likewise, out of total water sector’s development budget, amounting to Rs 71.9 billion, an amount of about Rs 56.5 billion has been proposed for system augmentation for the next fiscal year.

In addition, an allocation of over Rs 237 billion has been made for development programme of Transport and Logistics sector.

Earlier giving an overview of the economic situation when the Pakistan Tehreek-e-Insaf (PTI) government came to power, the Minister of State for Finance said that the Country was facing overall debt of Rs 31000 billion including US$ 97 billion of external debt.

The foreign exchange reserves had dropped to US$ 10 billion.

The minister said that trade deficit was US$ 32 billion while current account deficit touched US$ 20 billion all due to financial mismanagement of the previous government.

Circular debt had reached Rs 1200 billion at a rate of Rs 38 billion per month whereas a loss of Rs 1300 billion was being faced by public sector institutions.

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This was unsustainable and as a result the rupee started falling in December 2017, he said adding that the PTI government took a number of steps to correct the course of economy.

Hammad Azhar told that Import duties were increased and imports reduced from US$ 49 billion to US$ 45 billion.

Circular debt was reduced by Rs 12 billion per month and it was brought down to Rs 26 billion from Rs 38 billion.

Similarly, he added that the financial aid from China, UAE and Saudi Arabia helped stabilize the economy. Incentives for export sector were increased for three more years.

The minister said that a programme of US$ 6 billion has been agreed with International Monetary Fund (IMF). This will help us gain US$ 2 billion to US$ 3 billion loan more at very economical rates. He said that oil payment deferred facility from Saudi Arabia will also help reduce pressure on the government.

The state minister said that US$ 7 billion reduction in Current Account Deficit will be achieved this year, which will be US$ 6.5 billion next year.

The minister said that the asset declaration scheme will bring the undeclared assets into mainstream and help increase revenue of the government. He said that tax policy has been separated from tax administration.

Moreover, he said that Pakistan Banao Certificates were issued in order to provide benefit to Overseas Pakistanis to invest in Pakistan. Billion Tree Tsunami and Clean and Green Pakistan initiatives were launched.

Hammad Azhar said that in Naya Pakistan, the culture of tax evasion will be overcome.

The minister said that civil and defense authorities have agreed to voluntary reduced in their budgets. He appreciated the gesture of both the civilian government and the military leadership for voluntarily deciding to cut their expenditures.

The state minister said that the civil expenditures will be reduced by five percent from Rs 460 billion to Rs 437 billion. He said that the defense expenditure will be maintained at Rs 1150 billion.

The Minister of state said that remittances have witnessed an increase of US$ 2 billion.