Fiscal year 2012-13: MQM presents Rs3.61 trillion shadow budget

PM Gilani to thrash out budget proposals with coalition partners today. DESIGN: SIDRAH MOIZ KHAN

According to sources, the Muttahida Qaumi Movement (MQM) and the Awami National Party (ANP) delegations, led by Deputy Convener of the Coordination Committee of MQM Dr Farooq Sattar and ANP Senator Haji Mohammad Adeel, respectively, would call on the premier on Monday in a bid to discuss and hammer out budgetary proposals for the 2012-2013 financial year.

Besides the upcoming budget, the law and order situation in Karachi, the premier’s contempt sentence and other pressing issues are likely to be discussed in the meeting between coalition partners.

Meanwhile, Finance Minister Dr Abdul Hafeez Shaikh called on Prime Minister Gilani at the PM’s House on Sunday to brief him regarding the meeting with allies and to review decisions of the National Economic Council (NEC).

The prime minister expressed satisfaction that the coming year’s federal development budget would increase from Rs300 billion to Rs360 billion, adding that the additional funds would be used for a regionally balanced development and the completion of projects in energy, infrastructure and food security.

For the upcoming budget, it was decided that it should focus on ensuring macroeconomic stability, growth, utilisation of resources, protection of vulnerable groups, incentives for private sector development and relief to the public while ensuring fiscal balance.

The minister informed the premier that Gross Domestic Product (GDP) in the current fiscal year was 3.7%, continuing an upward trend of the last three years. Similarly, the rate of inflation will be declining for the third consecutive year, the minister added. Shaikh also informed the PM that tax collection in the first ten months had increased by about 24%.

According to sources, representation from the Pakistan Muslim League-Quaid and Federally Administered Tribal Areas in the meeting has not been confirmed but invites have been sent out to them.

Shadow budget

Meanwhile, the MQM is likely to share its shadow federal budget with the prime minister today.

“The MQM being a political party of Pakistan and especially being a coalition partner of the government has set a precedent in the economic parliamentary history of the country by presenting a shadow budget,” MQM’s Dr Farooq Sattar told The Express Tribune on Sunday.

Sattar went on to add that the proposed shadow budget would not focus on exposing the deficiencies and mismanagements of the government but would provide an opportunity to the masses to countercheck the statistics and figures in the upcoming budget to be presented in a week’s time.

MQM’s shadow budget

Income from all sources above the taxable limit be taxed

Reduction in sales tax rate from 16 % to 12 %

Reduction of maximum duty rate on imports to 10-15% with a minimum of 5%, exception only with the approval from parliament

No duty or sales tax on machinery and raw materials essential for industries

Abolition of petroleum levy

Reduction in the basic discount rate from 12 % to 10 %

Reduction of federal government expenditure due to devolution and austerity measures

Improving governance of public sector enterprises (PSE), prevent their hemorrhaging and assign a role to the private sector in public-private partnership models

Reducing misuse of Afghan Transit Trade, under-invoicing and curbing smuggling in Pakistan

Assigning a greater role to overseas Pakistanis

Availability of basic food items to the poor at subsidised rates

Improving equity in the taxation system by increasing the direct and indirect taxes ratio (45:55 from 35:65)

Published in The Express Tribune, May 28^th, 2012.