ISLAMABAD: Federal Finance Minister Ishaq Dar presented the federal budget for the year 2013-2014 in the National Assembly on Wednesday, Express News reported.
The first litmus test of the newly sworn-in government began when Dar presented a Rs3.5 trillion federal budget in a bid to revive the country’s ailing economy. Designed to target an estimated growth rate of 4.4% over the next fiscal year, the budget would seek to reduce non-development expenditures and fix a burgeoning energy crisis that has been costing the country 2% of gross domestic product annually.
Finance minister Ishaq Dar told the national assembly that the government would clear $5 billion in circular debt from the energy sector within the next 60 days.
"This will greatly help minimise power cuts in the country," Dar said, giving no details on how the government would find the money to pay the bills.
Years of mismanagement, under-investment and corruption cause blackouts of up to 20 hours a day in blistering summer heat, when temperatures reach up to 50 degrees Celsius (122 Fahrenheit).
Pakistan is still paying off a $11.3 billion International Monetary Fund loan from 2008.
A 10% increase in defence spending was also announced, despite the country facing a crippling budget deficit of 8.8 percent.
The new budget earmarked Rs627 billion ($6.3 billion) for defence, a 10 per cent increase compared to Rs570 billion in the outgoing year, ending June 30.
Business was also a key focus for the new government and announced a three year gradual reduction in the corporate tax rate which will be reduced by 1% over the next year and by 4% more in the subsequent years.
The full budget speech can be found here.
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END OF LIVE UPDATES
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6:52pm
We have inherited a weak economy. Its recovery is our topmost priority, says Dar.
Our government won't run away from obstacles.
We have embarked on a way that is filled with challenges but this is the only way we can assure prosperity and progress in the country, says Dar.
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6:50pm
Pension will see an increase of 10%, says Dar.
Minimum pension amount has been increased from Rs3000 to Rs5000.
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6:49pm
Restrictions will be placed on the purchase of new cars.
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6:47pm
The new government will have less than 40 ministries, says Dar.
No vehicle can be imported without paying the duty tax.
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6:44pm
All organisations and autonomous bodies have been asked to freeze secret funds.
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6:41pm
We promise transparency to the people, says Dar.
People Work Programme 2 is being abolished.
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6:36pm
Prime Minister Youth Skills Development Program will be launched. Whoever is younger than 25 years will be provided with 6-month vocational training. All expenses will be covered by the federal government, says Dar.
Masters and PhD student’s fees will also be paid by the federal government.
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6:35pm
Laptops will be given to any student who is getting higher education from any HEC associated university, says Dar.
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6:33pm
A scheme will be launched to provide employment training opportunities for the youth in government offices, says Dar.
Whoever is younger than 25 years old and has completed 16 years of education will be eligible for the one year training program. Rs10,000 will be paid monthly to the enrolled candidates.
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6:32pm
100% sales and excise duty has been abolished for Hybrid vehicles upto 1,200cc.
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6:28pm
The current budget will be encourage the exploration of alternate energy sources. Machinery that makes use of wind and solar energy will be made easily available.
Energy savers will be exempted from customs duty.
Access to clean water is the basic right of every citizen. To mitigate the prevalence of water-borne diseases, water filtration system will have its customs duty reduced, says Dar.
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6:24pm
Necessary amendments are being made to address the ambiguity surrounding sales tax and federation excise.
Sales tax has been increased from 16% to 17%.
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6:19pm
0.5% tax will be levied on movable property in the government's income support programme and I will be the first one to make the contribution, says Dar.
Aashiana housing scheme will be launched.
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6:18pm
Rs 100,000 to Rs 2,000,000 loans will be made available to small businesses.
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6:13pm
Adjustable taxes will be levied on small businesses.
Withholding tax will be levied on traders' registrations.
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6:10pm
An adjustable withholding tax has been introduced for holding wedding functions in hotels, clubs etc.
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6:05pm
Special economic zones, with tax exemptions will be launched.
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6:04pm
Government is chalking out a fool-proof tax recovery system.
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6:02pm
10% increase in pension has been approved by the federal cabinet.
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5:58pm
Withholding tax will be imposed on foreign soap operas and movies, says Dar.
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5:56pm
The government plans to increase credit facilities for the private sector by reducing its own borrowings.
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5:54pm
Rs21 billion has been allocated for the health sector.
The federal government will provide assistance to the four provinces in their task of combating prevalent illnesses like measles, says Dar.
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5:50pm
Rs2 billion relief package will be granted during the holy month of Ramazan.
Rs18 billion fund has been allocated for HEC.
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5:49pm
We are working on connecting Gwadar port to Afghanistan and China, says Dar.
The allocated funds for the federal ministers will be abolished.
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5:46pm
Pakistan Railways has become an organization which is sustaining considerable losses.
Through focused leadership and a renewed promise, we will work on improving the infrastructure and operations of Pakistan Railways, says Dar.
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5:44pm
Tax exemption on VVIP cars will be abolished.
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5:39pm
Business loans will be granted 8% mark-up from Rs10 million to Rs20 million.
Rs225 billion have been allocated for investment in the energy sector.
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5:38pm
We need to explore new sources of water supply. Our government is allocating Rs59billion for the purpose, says Dar.
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5:35pm
Income support fund will be increased by 20% from Rs1,000 to Rs1,200, says Dar.
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5:33pm
Benazir Income support funds will continue, says Dar.
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5:31pm
Development funds will be increased by 50% to Rs540 billion, says Dar.
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5:30pm
We will reassess the system of subsidies so that funds could be diverted to the poor, says Dar.
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5:28pm
Low budget Nandi Pur project will be completed in 18 months, says Dar.
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5:26pm
We will take legal action against whoever is responsible for the misuse of country's resources, says Dar.
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5:24pm
In a historical move, Prime Minister Nawaz Sharif has decided to resolve the circular debt situation within 60 days, says Dar.
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5:21pm
We will keep a steady watch on the prices, says Ishaq Dar.
New budget schemes will be introduced.
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5:19pm
Our aim is to reduce fiscal deficit rate, says Dar.
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5:18pm
We will have to bring a revolution in the shattered infrastructure of the country, says Federal Finance Minister Ishaq Dar.
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5:17pm
The previous government left the economy in tatters. The value of dollar rose from Rs60 to Rs100. The government borrowed heavily from IMF, says Dar.
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5:12pm
We want to create an economy that doesn’t depend on other countries, says Dar.
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5:11pm
The budget is based on our party’s manifesto, says Dar.
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5:05pm
Federal Finance Minister Ishaq Dar has started to announce the provisions of the federal budget.
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5:00pm
The Federal Cabinet has approved the 2013-2014 budget.
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COMMENTS (65)
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According to Wikipedia, around $200 billion is in Swiss account, which is utilized by the western world. Why the government do not bring that money in the country. It can be done by saying that no question will be asked if the money is brought in Pakistan and kept in Pakistan account for 10 years without any interest. Then this money will be returned to the person as it is in dollars. The government can utilize this money for next 10 years without paying any interest. The government can earn interest @10% per year, which will make it $20 billion equal to around 2 trillion, out which debt service and defense expense can be met of around 1.8 trillion, thus reducing the budget burden by 50%, it will provide the room to the poor people to live at least for next 10 years above poverty. The new government should also make sure that during this 10 year duration, new debts are acquired. You just image after 10 years the company will be debt free as all debt would have been paid.
There are other solutions available to change the fortune of the people of Pakistan and the big people know it, but not understandable why do they not go for the right plans.
Note: Given personal information is not real, it has been filled to send this comment, thanks.
Pak-Iran Gas pipeline project no where seen
PMLN have to in crease the salaries off all the employs up to 10 gram of the Gold, where he easily maintain his family life slandered, but unfortunately said government initiate revers process that could not support the life of common man.
PMLN have to in crease the salaries off all the employs up to 10 gram of the Gold, where he easily maintain his family life slandered, but unfortunately said government initiate revers process that could not support the life of common man.
@Salman Saleem: I hope goverment employees deserved that increase in salary but sadly they dont, no offense but thats the truth !!
What I dont get is that we dont want to pay andthe.n want to whine about how are salaries r nt being raised.hayay ghareeb mer gaya .bijli mehngi ho gai...mehngaaai..it shows nthn but stupiddity... by the way I supported pti
Here's my biggest criticism: They kept Benazir Income Support Program (BISP) and abolished People Work Programme 2. The latter models itself on a "right to work" program - equivalent to India's NREG. It provides income support to families by guaranteeing employment in public works and infrastructure projects. Instead of giving people cash hand-outs, guarantee them employment.
How can we Pakistanis complain about the budget when only 1 million of us pay Income Tax out of a population of 180 million? If we do not pay taxes, we have no right to complain.
As tax evaders, we are thieves and have no right to complain when the government cannot spend on development.
Let us all pay taxes first before we demand accountability from the government.
Please note I do not defend the government in any way; they have enough faults but lets face our shortcomings and fix them first.
I am making a more generic point.
Nothing new. All your points are always generic.
Major disappointment when I cannot find any mention of budget for EDUCATION which is "Root Cause" of all problems in Pakistan. I expected EDUCATION to be the TOP budget item showing 6% to 8%. All I see was useless and wasteful projects like the "Income Support Program" which has always been to buy votes and keep all the politicians from the feudal's in power and keep the poor in to perpetual slavery. Shame-Shame-Shame
@hassan:
So the increase in GST, the duties on edible oil, the electricity unit cost increase etc are not going to hurt the middle and lower middle class? The middle classes never use wedding halls? Where are the taxes on the rich industrialists and traders that the USA, UK and several world bodies have been demanding for years? Their taxes have actually been reduced!
The Budget is not based on party's manifesto, party is also working for nation. The last government left the Pakistan empty in all aspect now if they are trying to regain the position then don't discourage or criticise them.
Give PML-N 15 years consecutive. So that they can implement such policies without interruption. In America their each party rule 8 years continuously. 5 years are too less. 1 year = 1 budget; Means 1 month salary. How can we expect any govt to change Pakistan in 5 months :).
Budget is excellent. Better than i expected considering the current financial condition of Pakistan. PPP Sindhi party stolen everything from treasury (Haraami Party).
Now hybrid cars will come to Pakistan, which will reduce our reliance on oil import, plus it will bring saving to common man.
Agriculture tax is a provincial matter. Plus agriculture tax will increase vegetables and fruits cost in entire Pakistan. I have no agriculture back ground but i think one must see the consequences of imposing such tax before doing it.
Higher slab salary taxes have been increased. Now person whose salary is 600,000 per month will pay 35% tax i.e. 178,000 (if im not wrong) per month. Good.
All secret accounts have been closed.
Defense budget has NOT been increased. PPP proposed Rs 30 billion increase in defense budget 3 months back. PML-N rejected. Good.
Education budget has been doubled almost. Good.
Prime Minister expenses are reduced by 45%. Excellent.
Ministries are reduced to 24 from 84. Excellent.
Plus other than budgets; PML-N will develop motorways and industrial city in Gawadar Port and link it to China physically. Motorways will bring 50 billion dollars royalty annually to Pakistan by 2025. Excellent. Once done we can pay our entire loans in two years.
People, have patience. Everything will be done good. PML-N needs time. They presented budget in a week after they started working. We should encourage them.
@Zain: Federal Government this time is getting a major chunk of the budget and provinces on their own cannot sustain the Health System at all. It is the responsibility of the Federal Government then to share the budget with provinces on the health sector then. Moreover for your information FATA , Azad Kashmir and Gilgit Baltistan needs allocation from Federal Budget as well and it is not only PIMS etc which will be allocated by this budget but also semi autnomous regions of Pakistan as well. If Federal Government can allocate around 100 Billion for special purpose projects in Karachi and for Rawaplindi metro from federal allocation in recent PSDP then Federal can do the same in Health and in Higher education but in the end it all ends up in priorities then.
Middle class has been droned in this budget.You did not increase salaries but increased tax on everything.Well done PML-N.Great job
@Shaami: Federal Government health budget is for FG run hospitals and institutes. So PIMS, JPMC, NIH and a few only. Health is a provincial subject. Federal Government does not run your local DHQ Hospital.
Bad budget the entire burden is on the people already paying Tax. 35% Tax Rate will drive People to look for new ways to hide their incomes and bribe will be on top the list. Pakistan should have flat rate of 15% income Tax across board on all incomes first 500,000.00 should be exempt and this will encourage people to become Tax payers instead Tax evaders.
@Saad: Education is a provincial subjet. Federal Government Education budget is HEC, Islamabad Capital Territory schools and a few vocational institutions (other like NIH etc funded through their ministries).
@frank: Yeah if Pakistan's middile class earns above 3 million a year, deals in real estate for tax-free returns, buys expensive cars and spends on levish functions,indeed this budget is gonna hurt them bad!!
Well..overall budget seems acceptable but there some limitations regarding primary education, agriculture sector, youth future plans and increase in sales tax. I hope PM will console the grievances of the poor people of this rich land, Pakistan.
@Oliver Kahn: Do you think............ the 70% of voters would have read the Manifesto of PMLN???? or any other party........... means you are living in diplomatic enclave?
@roadkashehzada: Means the party manifesto should be PUBLIC ORIENTED........Agreed now?
It is good not to increase salaries of corrupt government personnel. They are just eating money and doing nothing. For sure it is good decision. Secondly imposition of restrictions of purchase of cars is also good. Everyone is buying car without thinking about the negative affect on enviornment and roads. There should be more taxes on buying cars so only people who can afford will get cars and it will positively improve the enviornment and also improve traffic conditions on roads.
Who will end the Non Developmental Expenditure in Pakistan Army??. Who will make sure that with this budget increase Our Army will not spend money on New DHA Housing Schemes?. Who will make sure that Defense budget will not be spent on DHA Cinemas, New Shopping Malls in Cantts and on renovations of Rest Houses , Messes, Sports Clubs and Golf Clubs of Army Officers around Pakistan.?? Also who will make sure that All Purchases of Defense Equipment will be corruption free and no Officer will took Commission on the purchase of Foreign Military Hardware?
What about education? What I see is that no political party lobbied for increase in education budget. Nobody at media outlets demanded for that. Even educated youth on social media is silent. I see no blogs on this. Even ET readers seem indifferent, there have been no comments! I wonder what can become of nation which is least interested in education!
@confused:
Agricultural tax is a provincial subject.
Higher education have got only 18 Billion Rs while in a country of 180 million we have a health budget of only 21 billion. Higher education is the engine of growth in terms of Innovation and R&D and i am greatly disappointed that Defense budget have been increased without asking anything While Health and Higher education is totally ignored by PMLN.
PML-N government has presented a good budget focusing on energy, business and development friendly policies. They should also announce pay increase for government employees however. Private companies will also have to follow the suit then. Sales tax should also not be increased.
@riz:
Good joke by riz
Good beginning by pmln.....
A clear mala fide with the common men. The budget seems to target only the rich and elite business class, ignoring the lower middle-class and poor completely. We are going to see higher prices soon due to increased sales tax.
Increase in sales tax but no mention of agriculture tax?
Wadera financial system to the core
Inqalabi's are going to cry. Sick of reading inqlabi comments anyways!! Sighhhh!!!
A budget designed to crush the salaried class and protect the industrialists and traders. No increase in salaries is a cruel measure and is designed to keep the wages low for the benefit of N-leagues industrialist friends. This will cause great hurt to ordinary people.
No increase in salaries of government employees it means private companies will also not increase salaries (as per previous trends private companies used to increase salaries after budget).
Increase in Sales Tax from 16% to 17%. (Every citizen will be suffering because its increase in indirect taxes and shows governments inability to collect direct taxes or maybe government does not want to collect direct taxes from industrialist because they are having friendly relations).
Restrictions on purchase of vehicles. (Cars are made for rich people only)
Taxes and more taxes. Terrible budget.
Thanks for creating more poors!!!
This budget is going to devastate Pakistan's middle class. The industrialist buddies of PML-N are laughing all the way to the bank, though!
What about the increase in pays of Govt employees?
all else is good except laptop scheme seems to be a waste of money. Also what about primary education? i would also like to see a huge literacy campaign throughout the country offering basic literary skills to adults.
@Nadir: Which is why I think the Armed Forces should be given the power to manage Fiscal and Monetary policy. They are clearly the only people who have the discipline for this exercise.
no excise duty on hybrid cars less than 1200cc?? just wondering which car it can be :S not sure if there is hybrid cultus. should have been for at least 1300cc cars ideally 1500cc to bring a minivan in for families
@Arshad: What kind of reasons you present. People have cast votes to PMLN based on their manifesto.
I hope that Budget 2013-14 will give incentive to the poor and middle class people of Pakistan.
Before giving my comprehensive comments, I have read the details of the budget in tomorrow's newspapers.
@MAK: teachers salaries are accounted for in provincial budget.
increase in salex tax means you have make all other benefits of budget null.
Very low increase in pension, senior citizens have no securities other than the government :(
Even though I rooted for PTI for different reasons and a fundamental change in the country, I do have faith in PML-N as far as getting the economy back on track economy is concerned. We need to give them the time and space required to do so.
The only thing that will count is how much the government expenditure, especially the defense budget has been reduced, and correspondingly what is the increase in allocation for education, health and infrastructure.
Overseas Pakistanis looking at you Mr. Dar, let's see what you give us.
Pakistan Railways has become an organization which is sustaining considerable losses, says Dar.
Railway can be turned into 180 degrees change, into a highly profitable public entity within two years. Just need a business acumen and more than that a PATRIOTIC WILL.
@Arshad: criticism for the sake of criticism. if its not based on party's manifesto, u ll say PMLN has backtracked on its promises
non-developmental expenses: means teachers, staff etc. salaries will be affected. :(
@Arshad:
Agreed and hoping so.
The whole budget is corrupt, except for the defence budget which is disciplined.
The budget is based on our party’s manifesto, says Dar it should be public oriented.......... not PMLN oriented.