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| 12 June 2004 | Saturday | 23 Rabi-us-Saani 1425 |
Shaukat to present Rs901bn budget today
ISLAMABAD, June 11: Finance Minister Shaukat Aziz is to present on Saturday a Rs901 billion federal budget for the next fiscal year, up 12 per cent from current year's Rs805 billion.
It will include a revenue target of Rs580 billion against current year's Rs510 billion. The second budget of the Jamali government is expected to envisage a deficit of about 3.9 per cent, allocating Rs192 billion for defence, Rs202 billion for Public Sector Development Programme (PSDP) and Rs699 billion for non-development expenses.
The budget proposals would be discussed by the federal cabinet in the morning to make minor adjustments and take a decision on the question of salary increase for government employees.
The sources said the finance ministry had finalized two proposals on the salaries of government employees. According to one proposal, the net initial salaries of all employees should be increased by 25 per cent irrespective of their pay scales.
The second proposal envisaged a lump sum increase of Rs1,000 for pay scale 1-10, Rs1,500 for BPS 11-16, Rs2,000 for BPS 17-19 and Rs2,500 for 20 and above. The sources said the major focus of the budget would be to ensure competitiveness of the large- as well as small-scale industry and agriculture, keeping in view the challenges of globalization.
This would be done through tariff reforms and realignments of fiscal policies to reduce the cost of doing business. The raw material cost would also be reduced through tariff rationalization.
The non-tax revenue is estimated at Rs175 billion for fiscal 2004-05 against budget estimates of Rs157 billion for the current year. Revenue from surcharges is estimated to increase to about Rs68 billion during the next fiscal year.
The budget is likely to reduce duty tariff on plastic, steel, power sector, ship breaking, aluminium, medical equipment and a number of other engineering industries as part of tariff rationalization to give a major boost to investment in construction and engineering industries.
However, duties on bus and truck tyres and some pesticides, which are manufactured locally in abundance, would be increased significantly, the sources said. Raw materials and components for local industry engaged in producing replacements of smuggled goods are being given preference in duty cuts.
While at present four GST rates are in force, the new budget will keep 15 per cent as a uniform rate. This will keep on being decreased by one per cent each year to ultimately settle at 10 per cent. Withholding tax on import of plant and machinery, which is considered as a tax on investment, is likely to be abolished.
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