On Friday, in the National Assembly the combined government has introduced the so called ‘progressive’ budget for the Fiscal Year 2022-2023 with an outlay of Rs9.5 trillion in the middle of strict conditions for the revival of $6 billion loan programme stalled for months over violation of policies, by International Monetary Fund (IMF).
Finance and Revenue Minister Miftah Ismail presented the Finance Bill, 2022 in the National Assembly, which would be in effect from first of July 2022. He opened his speech by criticizing and blaming the outgoing PTI government for changing finances ministers and finance policies frequently. It was an unusual scene as members of the ‘hybrid opposition’ listened to the whole budget speech very calmly. The finance minister was of the view that despite of difficult economic situation the coalition government took over for which they have to take direful decisions which may harm their respective party’s reputation but they chose to keep national interest above party interest.
Miftah Ismail further explained that out of total 9.502 trillion budget Rs 2,950 have been allocated for debt services and RS800 billion have been designated for Public Sector Development Programme (PSDP 2022-2023). An amount of Rs1,523 billion have been assigned for defence expenditures, Rs550 billion for civil administration and Rs530 billion for pensions. Similarly, Rs699 billion had been proposed for providing targeted subsidies to the poor segments of society. Miftah said that people earning less than Rs40,000 will be given Rs2000 as relief which will continue in FY 2023 budget. He told that taxes would be imposed on goods consumed by the rich to provide relief to the common man and that the government wants to provide maximum relief to the poor people for which several steps have been taken to provide subsidy and assistance. He emphasized on the need to impose special tax on higher income earnings in order to divert resources to poor people.
Miftah said that their budget policies target to enhance agriculture production to lower imports especially edible oil, to promote industries to bolster exports and earn valuable foreign exchange to help address issue of balance of payments on permanent basis. Owing to high inflation the salaries of government employees have an increase by 15 percent and the pensions by 5 percent. The FBR revenue has been estimated at Rs7,004 billion. The government has decided to give tax breaks to IT, agriculture, clean energy and education sectors. In this budget, it has been proposed to waive sales tax on the import and distribution of solar panels to boost clean energy. The agri machinery, including tractors, along with seeds, will also be exempted from tax.
The government has also decided to increase the budget for Higher Education Commission (HEC) by 67 percent. It has planned to grant 5,000 scholarships for students of Balochistan and additional scholarships for coastal areas of Balochistan. The China-Pakistan Corridor (CPEC) projects will be provided extra funds to expedite their progress. The government decided to exempt industrial feeders from power outrage for the growth of this sector. Rs24 billion have been set aside for vaccinations and health institutions. The finance minister gave an insight into the government’s estimated expenditures, revenues and how it aims to allocate fund and their policies.