Rs7.14tr ‘ tax-free’ budget envisages economic stability amid coronavirus

The Minister of Industries Hammad Azhar just presented the tax-free budget for the fiscal year of 2020-2021, advisers to the Prime Minister of Finance and Revenue Dr Abdul Hafeez Shaikh introduced it to him as the corona budget a day earlier when they were disclosing the economic survey for fiscal 2019-2020.

He announced about the new tax-free budget at the National Assembly where he talked about different major figures like the Federal Board of Revenue (FBR) revenue target was kept as Rs4.95 trillion for the next year while the share the defence will receive will be Rs 1.3 trillion. The federal development programmed will be getting Rs650 billion to help with the grown proposals.

The session was also attended by Prime Minister Imran Khan. Azhar started the session by saying it was an honour for him to be presenting the second budget for the PTI government under the leadership of Prime Minister Imran Khan.

After then he started highlighting the major achievements of the government during the current fiscal year, he pointed out a 73 per cent decrease in the current account deficit which is now under $3 billion he added “There is also a primary surplus which we achieved in the past nine months.

In the National Assembly, we also heard loud slogans in the background of Azhar’s speech against the Prime Minister and Table were being Thumped by the opposition benches later the opposition walked out of the House in protest.

He also said, “our tax-free budget deficit decreased from 5pc to 3.8 pc while the IMF gave us an extended facility of Rs6 billion and our remittances increased from Rs16 billion to Rs17 billion.”

Talking about more details about the new tax-free budget the minister highlighted that “no new tax was introduced in this budget”. He said the need of the hour was the expansionary fiscal policy which the government was carrying out.

Total Expenditure:
Talking about the total expenditure he said the total size of the budget for the next year stood at Rs 7,136 billion which is a bit high that the budget from the previous year.

Current Expenditure:
On the topic of current expenditure, he said that the current expenditure for the next fiscal year was budgeted at Rs6,345 billion which is higher was the last year which was Rs 6,193 billion. Of this Defence, Affair makes up Rs 1,289 billion by 11pc from the last year with interest’s payments up to Rs 2,946 billion.

Allotment for education has been budgeted for Rs 83.3 billion which is up by 7.9pc from the last year which was Rs 77.2 billion. Health allotment has been doubled from the last year by 130 pc and they will be Rs 25.5 billion. He added that the fund provided to the health allotments will be used to improve health services and program the framework.

Public sector development projects (PSDP):
Hammad Azhar also told that the total expenditure for the PSDP for the fiscal year had been budgeted to Rs1,324 billion which is 18pc below the last year budget.
Of this federal PSDP been allocation Rs650 billion while Rs676 billion have been designated to provinces.
Fiscal deficit:
Talking about the fiscal deficit he said that it would be 7pc of the GDP and has been budgeted at Rs3,195 billion for the fiscal year 2021. The minister regretted that the deficit had been increased manifold during the management of the previous governments but said that this government will try to keep that in check.
Growth Rate:
Azhar said the government will pull out the economy from a 0.4pc reduction and is aiming for a 2.1pc growth in GDP for the fiscal year 2021.
Inflation:
Consumer Price Index inflation for the fiscal year has been budgeted at 6.5pc which is down from the projection which was of 13pc.
Total Revenue:
On Total Revenue, he said the budget is set of Rs6,573 billion of which net federal revenue will be Rs3,700 billion.
FBR tax revenue:
Azhar went on informing about FBR tax collection that it has been budgeted at Rs 4,963 billion which is lower than last year’s budget amount of Rs5,555 billion. The minister stressed during his speech said that the government wants this to be a relief budge because of the crises brought on us because of the pandemic and the government will not be imposing any new taxes for the new year.

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