Budget 2020-21: Rs7294 billion budget being presented in National Assembly

Jamal

Updated 13 Jun, 2020

Pakistan

Minister for Industries and Production Hammad Azhar unveiled the Pakistan Tehreek-e-Insaf's corona-influenced budget in a special session of the National Assembly

“After assuming charge in August 2018, the PTI government kicked off efforts to improve the economy. Our aim was to eliminate corruption, improve institutions and strengthen the economy,” said Azhar.

The minister said that the State Bank of Pakistan’s foreign exchange reserves had slipped from $18 billion to less than $10 billion.

The minister initiated his speech by pointing out that the present government inherited the economic crisis, with the Current Account Deficit balloning to $20 billion, which was brought down to $3bn. He said that his government has paid nearly Rs5 trillion in interest payments on past debts in its two years in power.

The federal minister said that the government's top two priorities have been battling corruption and ensuring accountability. He said that during the past five years, there had been no growth in exports.

"The reserves of the State Bank of Pakistan declined from $18bn to $10bn due to the failed policies of the past," he said, adding that Pakistan had been placed on the FATF grey list due to the absence of concrete policies to keep terror financing and money laundering in check.

As the minister spoke, the opposition MNAs started waving protest banners in the parliament and shouted slogans against the government.

No new taxes

As per details, the federal cabinet has decided not to impose no new taxes in the budget for the fiscal year 2020-21.

The resource availability during 2020-21 has been estimated at Rs 6,314.9 billion against Rs 4,917.2 billion in the budget estimates of 2019-20. Whereas, the net revenue receipts for 2020-21 have been estimated at Rs 3,699.5 billion indicating an increase of 6.7% over the budget estimates of 2019-20.

GDP target for next financial year 2020-21 set at 2.3%

Finance Advisor Abdul Hafeez Sheikh, while addressing a press conference in Islamabad, said that the GDP target for the next financial year ( 2020-21) has been proposed to be 2.3% while the current year’s GDP growth was negative 0.4% against the target of 3%.

The proposed targets of various sectors have been set at:

a) Agriculture 2.9%
b) Industries 0.1%
c) Services Sector 2.8%
d) Trade Deficit 7.1%
e) Current Account Deficit 1.6%

According to the document, inflation is projected to fall from 11% to 6.5% during the next financial year, and there are proposals to reduce government’s non-developmental expenditures.

The document also proposed to further target subsidies in the next financial year.

Agriculture sector grew by 2.67% in 2019-20

The outbreak of deadly Corona virus, which had badly affected the global economies also negatively impacted the national economy and performance of all major sectors remained dismal during the outgoing fiscal year (2019-20).

However, during period under review, the agriculture sector performed well as it recorded strong growth of 2.67 percent considerably higher than 0.58 percent growth achieved during same period of last year.

The maize production in the country grew by 6.0 percent to 7.236 million tons, whereas cotton production declined by 6.9 percent and it was recorded at 9.178 million bales.

sugarcane production witnessed nominal reduction of 0.4 percent as it was recorded at 66.880 million tones. Wheat is the most important crop of Rabi season, which showed growth of 2.5 percent and reached to 24.946 million tons during the year to be ended on June 30.

Livestock having share of 60.56 percent in agriculture and 11.69 percent in GDP achieved the growth at 2.58 percent.

The Fishing sector having share of 2.06 percent in agriculture value addition (and 0.40 percent in GDP), grew by 0.60 percent, while Forestry sector having share of 2.13 percent in agriculture (and 0.41 percent in GDP) grew by 2.29 percent.

Major points and allocations

Rs20billion allocated for health sector

Balochistan to get Rs10billion special grant

Rs1billion allocated for artist welfare fund

Inflation to be brought down to 6.5 percent

Current account deficit to be maintained at 4.4 percent

Rs40billion allocated for Pakistan Railways

Rs10billion for the agricultural sector

Rs6billion allocated to deal with challenges posed by climate change

Rs20billion allocated for science and technology

Rs48billion for KP’s tribal areas

Exemption from taxes and duties on medical and testing equipment extended to three more months