In his first address to the nation after taking over as prime minister for the third time Mian Nawaz Sharif had promised “a new beginning in Pakistan” but the first budget that his finance minister presented on Wednesday contained nothing unusual or off the beat that would bring immediate relief to the harassed nation. Mr Ishaq Dar did promise progressive taxation and clearing the back-breaking circular debt within 60 days, and announced an austerity plan. But he set the abysmal performance of the PPP-led government on the economic front as the benchmark to judge the improvement the new government will be trying to bring. His progressive taxation plan of higher the income more the tax is yet to be approved by the cabinet. On the other hand, the people will suffer immediately the burden that the indirect taxation in the form of 1% increase in the General Sales Tax and the cut in subsidy to power sector that he announced would bring.

“As much as we need to defend our frontiers, we need to protect our economic sovereignty also, which would only be possible when we refuse to live on handouts and foreign goodwill. Self-reliance has to be our real goal …,” declared Mr Dar in his budget speech. But, in practice, he has proposed to fill the deficit in the budget by more borrowing, both at home and abroad.

Interior Ministry

The interior ministry’s budget has been enhanced by 5.41 per cent to Rs603.43 million for the year 2013-14, and more than half of this will go to the salaries of employees.

The previous government had made exorbitant expenditures when compared to the allocated budget.

Although Rs572.18 million had been allocated to the ministry in the budget 2012-13, the actual expenditures amounted to Rs739.70 million at the end of the outgoing fiscal year.

These expenditures include Rs90 million for the National Crisis Management Cell (NCMC), a department within the ministry which acts as a liaison office among all law enforcement agencies of the country. It shares information related mainly to terrorism.

A new head has also been created in the ministry’s budget as the Commission of Inquiry of Enforced Disappearances, established on the directives of the Supreme Court.The commission has a budget of Rs16.98 million for 2013-14.The interior minister and the state minister for interior have discretionary grants of Rs600,000 and Rs400,000 respectively.

Islamabad Capital Territory

The total budget for federal capital is Rs5.92 billion for 2013-14, with major chunk of Rs5.48 billion going to the police department.

Allocation for district administration stands at Rs197.17 million. An amount of Rs13.87 million has been allocated under the new head of “deployment of forces in aid of civil administration”. It has been created in the wake of massive protest rallies and demonstrations in federal capital in the past one year including sit-ins. This will allow the Islamabad administration the financial autonomy to facilitate the police force deployed for long hours with necessary items including food.

The budget of Commissioner Islamabad’s office has been raised from Rs68 million in 2012-13 to Rs72.57 million for the next fiscal year, whereas the budget ofthe deputy commissioner’s office for 2013-14 is

Rs84.20 million, compared to Rs71.50 million allocated in 2012-13. The health department of ICT will receive Rs77.46 million for 2013-14 compared to Rs47.60 million in 2012-13.

Railways

One of the most financially troubled state-owned entities, the Pakistan Railways (PR) has a budget of Rs52.51 billion for the fiscal year 2013-14.

In the outgoing year, Pakistan Railways had an allocation of Rs47.67 billion, but it ended the year spending Rs51.08 billion.

The railways has Rs20.44 billion employees-related expenditure while its operating cost per annum is Rs13.24 billion.

The Pakistan Railways is to make a mandatory payment of Rs1.64 billion in terms of loan repayment while Rs947.76 million have to be paid in terms of interest on loans.

The railways will cough up Rs15.57 billion in terms of employees’ retirement benefits and another Rs43.50 million will be utilised for catering to the transfers and postings of its employees.

The railway police expenditure is Rs1.94 billion while the annual expenditure of its account department is Rs874.35 million.

In the outgoing year, the allocation for this department was Rs749.87 million.

HEC

The budget allocated for the Higher Education Commission (HEC) for the fiscal year 2013-14 is Rs39 billion, an increase of Rs7 billion from the previous year. The budgetary allocation for HEC is Rs520 million.

The grants and support to 69 universities and institutions, to be given through the HEC, amount to Rs22.79 billion, while the grants for 29 technical institutes for 2013-14 is Rs10.31 billion.

HEC will also provide grants of Rs5.89 billion to departments in various educational institutions and universities.

The development budget of HEC for the upcoming fiscal year is Rs16.44 billion, while the new prime minister’s laptop scheme, worth Rs3 billion, is also likely to be executed by the HEC. Among the development projects of HEC for the upcoming fiscal is Narowal Engineernig University.

Besides special scholarships have been introduced for South Punjab. Previously such schemes were for students of Fata and Balochistan only.

Central pool of cars

The two heads of Cabinet Division witnessed an exceptionally high spending compared to the budgets allocated to them in the fiscal year 2012-13.

The central pool of cars (CPC) was allocated Rs43 million in the budget 2012-13 but the actual expenditure made by it amounted to Rs247.64 million. The budget book shows that the increase in the spending was because of the ‘purchase of transport’ worth Rs198.64 million. However, there was no allocation under this head when the budget 2012-13 was approved.

Incidentally, the secretary cabinet division has not only denied such a bulk purchase of vehicles but also expressed astonishment over reflection of the figure in the budget document.

“There was a strict ban on purchase of cars except for 20 or so Corollas and Hondas to replace the aging fleet,” she said. She added that one such move to provide luxury vehicles to former prime ministers was not materialised.

With an increase of over 102 per cent, the budget of the CPC for the upcoming fiscal year now stands at Rs87 million.

Devolution Cell

The second such head of the Cabinet Division with a higher expenditure is the ‘Devolution Cell’ where the spending amounted to 84 per cent above the budgetary allocation.

The cell was allocated Rs44.29 million in the budget 2012-13 but it ended up spending Rs81.62 million.

The officials of the finance ministry said the post-devolution issues were still piling up and the major expenditure was related to employees of devolved departments who were not being taken by the provinces.

Compared to the authorised strength of 163 staff and officers, the cell was stuffed with 318 personnel.

For the upcoming fiscal year, the budget of the cell has been fixed at Rs140.92 million, which is up by 218 per cent compared to the previous year.

This includes Rs105.18 million for employees and their retirement-related expenditures and Rs32.99 million for operating expenditures.

Federal buildings

The Capital Development Authority (CDA) has been allocated Rs1.85 billion for annual repair and maintenance of federal buildings, including Aiwan-i-Sadr and Parliament House.

The CDA will be spending Rs214.92 million on the repair, maintenance and for payment of utility bills and other expenditures of the parliament building.

In the outgoing fiscal year, the allocation was Rs209.92 billion. The annual budget for repair and maintenance and utility charges of Parliament Lodges is Rs214.92 million. Under the same head, Aiwan-i-Sadr will get Rs229.92 million.

The CDA has been allocated Rs23.50 million and Rs25 million in terms of maintenance charges of National Monument and Pak-China Friendship Centre.

A sum of Rs37.30 has been set aside for the AGPR building. The total allocation to CDA for the repair and maintenance of other federal buildings amounts to Rs1.09 billion.

However, there are occasional delays in the release of funds to the CDA.

Entertainment tax

Finance Minister Ishaq Dar during his budget speech informed the entertainment-starved citizens of the country that a new tax was being levied on foreign contents to be aired by cinema houses or cable networks.

“The new adjustable withholding tax is being proposed on foreign-based films and dramas to make them competitive with the local film industry,” the minister said.

The tax to be levied will be Rs1 million on each film and Rs100,000 per episode of a drama serial. The tax is adjustable, which means that the importers or the users - cinema houses or TV channels - can claim refund while filing their annual returns. The move has been made to keep records of incoming contents and discourage the reckless import of foreign films and dramas.

But practically this could mean an increase in tickets for the cinema goers.

Many cable operators who air foreign films or dramas may discontinue the practice and the viewers of cable networks can expect a decline in variety on their home screens.

Such a move had been on the cards by the local media tycoons against cinemas and mainly cable operators who operated their own entertainment channels.

A complaint had also been registered with Pemra in this regard.

However, even the mainstream entertainment channels continued importing foreign, especially Turkish and Spanish, soaps.

The reason as presented by the finance minister that it would give some protection to the local entertainment industry is less likely to be achieved and could be counterproductive too.

The viewers can switch to watching films and dramas from rented DVDs as it happened in the 1980s when the public preferred watching Indian and Western movies through VCRs rather than going to the cinema houses to watch a Pakistani film.