Key figures:
Defence budget is proposed to grow nominally in the next financial year by 4.74 per cent as compared to the outgoing year, but its share in the total outlay and the gross domestic product (GDP) is set to decline, according to the budget documents laid before the National Assembly.
The government has proposed to allocate Rs1.15 trillion for ‘Defence Affairs and Services’ for 2019-20 as compared to the original allocation of Rs 1.1tr for the outgoing year.
Read more here.
Health advocates were shocked to learn that despite a decision of the federal cabinet to impose “health levy” on cigarettes and fizzy drinks, it was not included in the proposed budget for 2019-20.
On June 3 the federal cabinet had approved the health levy and directed the secretaries of finance, health and revenue divisions to implement it. As per a memorandum available with Dawn, the health levy of Rs10 on each packet of cigarettes and Re1 (one) on each bottle of 250ml fizzy drinks had to be imposed in the proposed budget. Moreover, it stated that revenue generated through the health levy would be earmarked for the health sector development.
Read the details here.
The federal government has allocated Rs29 billion for the development projects of Higher Education Commission (HEC) in the fiscal year 2019-20.
According to the budget documents, the Rs29.046bn have been earmarked for 120 ongoing and 17 new schemes of the HEC.
Read the details here.
The incumbent government plans to increase foreign borrowing for budgetary support by threefold in the next fiscal year compared to the proposals in the budget 2018-19.
The budget document released on Tuesday announced that the government is likely to obtain foreign loans worth Rs3.003 trillion compared to Rs1.087tr during the final budget presented by the PML-N government in 2018.
Read the retails here.
The federal government, in the budget for fiscal year 2019-20, has completely ignored new development schemes in the sports sector of the country.
According to budgetary documents an allocation of Rs339.958 million has been made for ministry of Inter Provincial Coordination (IPC) — the parent ministry of Pakistan Sports Board (PSB) — for seven ongoing sports-related development schemes.
Read more here.
In a late night address after the budget proposal was announced, Prime Minister Imran Khan vowed to go after the "thieves who left the country badly in debt".
The premier announced that after putting to rest the initial focus of the government to stabilise the economy, his attention would be more targeted towards bringing the ones to task who had caused the country to fall into such dire straits.
Read the story here.
"Today the PM of Pakistan danced on the floor of the house as his ministers introduced a PTIMF budget that increases taxes, inflation & unemployment. History will record how Imran danced as our economy burns," said PPP Chairperson Bilawal Bhutto Zardari.
Maryam Nawaz, a vice-president of the PML-N, berated the "incompetent government" over the proposed "IMF budget" and said: "The government that raised the prices of food and other commodities has burdened the poor people — who are already suffering because of the incompetence of the administration — with its ineptitude. Every day of the Incompetent Khan is wounding the country."
Prime Minister Imran Khan will address the nation after 9pm, a senior PTI leader has said.
Minister for Science and Technology Fawad Chaudhry expressed gratitude towards the government for proposing to allocate Rs43bn for his ministry in this year's budget. This is the "highest ever" amount that has been allocated to the Ministry of Science and Technology, he said.
Minister for Revenue Hammad Azhar has moved the Finance Bill 2019 in the National Assembly.
Speaker Asad Qaiser has adjourned the assembly session till Friday.
The minister for revenue says that the budget recommends that cars of upto 1000 CC see a federal excise duty of 2.5 per cent.
It is further recommended that cars which are more than 2000CC in capacity see a federal excise duty of 7.5pc imposed.
Hammad Azhar announces that the budget recommends a federal excise duty of Rs5,200 on every 10,000 cigarettes be imposed.
Sugar prices are likely to go up as it has been recommended that the sales tax, which previously stood at 8.5 per cent, now be increased to 17 per cent.
Sugary drinks will also see an increased tax duty of 13.2 pc versus the previous figure of 11.25 pc.
The minister for revenue has announced that the general sales tax on goods will remain unchanged and will stand at 17 per cent for FY2019-20.
Food items supplied to bakeries and restaurants will be taxed at 4.5 pc.
Mayhem in the parliament continues despite National Assembly Speaker Asad Qaiser's instructions for opposition members — who have gathered around the speaker's dais — to return to their benches. Some members of the opposition have torn copies of the budget.
Headline figures for Budget 2020
Opposition members have gathered around treasury benches and are chanting anti-government slogans as Hammad Azhar announces budget in National Assembly. Many are carrying placards saying 'Go Niazi Go' and 'Say no to IMF budget'.
The minimum wage has been increased to Rs17,500, Minister for Revenue Hammad Azhar announces as he presents the budget.
Azhar also announces that federal government employees from Grade 1-16 will see a pay raise of 10 per cent, whereas those from Grade 17-20 will see a pay raise of 5 pc.
Amid thumps of approval, the minister for revenue also declares that the cabinet members will be taking a pay cut of 10 pc in their salaries.
"Our institutions will be strengthened and 2019-20 will be the year of change," Azhar says. "The govt will avoid taking loans from the SBP to cover shortfalls, while inflation will be targeted to be kept between 5-7pc."
DEVELOPMENT BUDGET:
Some opposition members are carrying placards saying "Say no to IMF budget" during the National Assembly session.
Minister of State for Revenue Hammad Azhar says that the government's priority for the next fiscal year is to increase the tax revenue, with the target set at Rs5,500bn by the Federal Board of Revenue.
"We will increase our tax net...benami and non registered assets will be brought into the net," he said.
He said that the tax refund system will be improved.
Opposition members protested for not being provided with copies of the budget speech which were distributed later.
PPP leader Sherry Rehman has said that the opposition will attend the National Assembly budget session.
"If the budget is people-friendly, we will listen to it. If it is anti-people, we will protest," she said.
PPP Chairperson Bilawal Bhutto Zardari has arrived in the National Assembly.
The government's running expenses will be slashed to Rs437bn from Rs460bn.
The defence budget will be kept static at Rs1.15tr.
"As regards social welfare programs, we are introducing four [main] policies.
"Rs200bn will be allocated to providing power at subsidised rates to low power consumers. One million people will be targeted for ration cards under the government's Ehsas program.
"Eighty thousand people will be given interest free loans under a mother and child nutrition program. Seven hundred thousand disabled persons will be given mobility and functionality aids.
"Under BISP, which has been placed under Ehsas, 5.7m extremely poor households will be given Rs5,000 as income support each month. Rs110bn have been set aside for this."
Hammad Azhar has delineated the key points for Budget 2020, saying the government's key priorities were public welfare and well being and reducing the external deficit.
The current account deficit will be reduced to 6.5pc in FY19-20.
Exports will be boosted through a revised duty structure.
Power and gas will be cheapened and Free Trade Agreements will be re-evaluated.
Pakistan will be made a part of the international value chain.
"As regards the Federal Bureau of Revenue, taxes will be increased. Our tax to GDP ratio is less than 11pc, the lowest in the neighbourhood. We will need to change our approach to tax payments or we will not be able to progress. We are currently at a point where we need to take loans to pay for past loans and salaries."
Leader of the Opposition in the National Assembly Shahbaz Sharif, PML-N parliamentary leader in the National Assembly Khawaja Asif along with some other party members wearing black armbands arrive in the parliament as Hammad Azhar addresses the House.
"The immediate steps we took to correct course included increasing the import duty from July to April, due to which imports decreased from $49bn to $35bn and the deficit decreased to $4bn.
"[Thanks to our steps] remittances increased by $2bn and Rs38bn monthly increase in power expenditures was brought down to Rs26bn. To stimulate exports, we issued low-interest loans.
"A $6bn programme with the IMF has been agreed to, and Saudi Arabia has offered deferred oil payments so that there is reduced stressed on our foreign exchange reserves."
"The current account deficit has shrunk by $7bn dollars, and [will shrunk further by] $6.5bn next year. the Fata-KP merger will be given special attention."
Opposition parties, apart from the MMA, were absent from the National Assembly as budget session got underway, Dawn reported.
"We have a brought a new thought, new commitment and new approach to governance," State Minister of Finance Hammad Azhar says at the start of his speech.
"It is time to lift the people who have been left behind. We are together here at this difficult time. Let us recall the economic situation the government has faced since coming into power."
"Pakistan's total debt has reach Rs31 trillion. We are deeply indebted thanks to high-interest loans. Foreign exchange reserves had dropped below $10 billion. The current account deficit had reached a historic peak of $20bn, while the trade deficit had reached $32bn. The fiscal deficit was more than Rs2.26tr. [These deficits] were attributable to financial mismanagement in an election year."
Dear reader, online ads enable us to deliver the journalism you value. Please support us by taking a moment to