Budget 2010-11 presented in parliament

Sheikh says a new scheme targeting the 200,000 youth will be paid by the state for a 100 days.

ISLAMABAD: The federal budget for the next year was presented to the assembly by the Finance Minister Abdul Hafeez Sheikh on Saturday.

The minister brought to notice the developments that have take place in the country despite the acute situation due the the recession.

Some key changes that were noted were significant increases in the salaries of government employees, the decrease in the sales tax to a fixed 15 per cent and several development projects that will be undertaken in the coming year.

For the full speech click here.

Live reporting ends

7:20pm

Sheikh says a new scheme targeting the 200,000 youth of the least developed areas will be paid by the state for a 100 days.

Sheikh says the salary increase will not apply on the cabinet.

7:18pm

Sheikh says medical aid double for grade 1 to 15 will be doubled and for grade 16 to 22 will be  raised by 15%. For government employees who retired after 2001 retire 15% raise in pension, for those who retired before 2001, a 20% raise will be implemented. Medical allowance will also increased. For grade 1 to 16 other allowances, night duty will also be increased.

Sheikh says all federal employees, will have 50per cent allowance increase in basic salary. People who have recieved 1 month allowance as increase will not be included.

Twitter comment: atifmali #budget in one pack of smoke rs 24 will go to the government

Twitter comment: rai_azlan Salary above 300,000 Rupees will be taxed #Budget sounds nice

Twitter comment: shahidsaeed market showed positive attitude. didn't plunge during speech #budget

7:12pm

Sheikh says 300,000 tax payers of Khyber Pukhtunkhwa and FATA will get Rs300 million tax relief.

Sheikh says no income tax on people with salaries of Rs25,000 or less.

Sheikh says for electricity conservation, electricity items which use a lot of electricity such as refrigerator and  air conditioner will have 10% tax on them.

Sheikh says a 1 Rupee per filter tax will be levied on cigarette.

Sheikh says this tax reform will take the provinces along. Our NFC award, GST on services is the responsibility of provinces. We want the new GST to be in consensus with the provinces. We propose to begin the reform of this tax from october 1st 2010.

Sheikh says that there varying rates of GST in the market right now ranging from 16 to 25 per cent. A fixed 15 per cent rate will be implemented. There will be no sales tax on health, education and food items.

Sheikh says there will be no additional duty on any customs item.

Twitter comment: MyLandPakistan glad to see that there is a reduction of 10% in the salary of Parliamentarians #Budget

Twitter comment: abidifactor So far #Budget looks better than #Phet

Twitter comment: atifmali #budget PIA has the highest number of staff per flight in the world. It has to cut down on its operating cost to survive

7:04pm

Sheikh says this would be the first year when the provincial development program will be larger than the federal one and provinces will get 52 per cent of budget.

Sheikh says total revenues have been Rs2.574 trillion.

7:00pm

Sheikh says the credit for all the developments goes to the president who is first president in Pakistan history to relinquish his powers to the house.

Sheikh says a health insurance scheme of 25,000 per family yearly in hospitals has been implemented and currently a system is being developed, to make these people permanently self dependent, to help them not to be dependent on these programs for life.

Twitter comment: abidifactor First President of Pakistan to relinquish his powers to the Parliament #Fact #Pakistan #Budget #true

6:56pm

Sheikh says the current government focused on safety net and pro-poor programs. Our subsidies do not differentiate between poor and rich. Electricity subsidy is given to everyone regardless of their usage. We want to target these subsidies. We did so in the Income support programme. The BISP distributed Rs4 billion among poor people. We will increase to Rs5 billion in the coming year.

Sheikh says the biggest challenge is the public sector enterprises. PIA is getting billions of rupees in subsidy, while Pakistan Steel is losing Rs 1 billion per month. We need to put money in the development sector. It is important to consult everyone. If these companies do not reform themselves, they will not get peoples money.

6:51pm

Sheikh says to conserve energy 300 million energy savers will be distributed.

6:48pm

Key objective 5: Job creation. The youth is a big portion of our population. The government does not have a magic wand to create jobs. Growing economy creates jobs. We need to create an environment, in which the private sector can grow. We have big reserves of coal, gas, petroleum, copper, and a big agriculture sector. The issue is how to take advantage of these. We need to think on how we can get investment into the country. The budget alone can not do everything.

Key objective 4: Protect the poor. We need to implement targeted subsidy so the poor can be helped.

Twitter comment: anasimtiaz Most of the honourable Parliamentarians gossiping while AH Sheikh gives #Budget speech.

6:42pm

Key objectives 3: Move towards self reliance and resource mobilisation. Our borrowing rose by atleast 100 per cent in 4 years and the debt to GDP ratio became 55 per cent. Tax mobilisation is less than 10 per cent. We need to move towards self reliance and we need to find a way to mobilise our resources.

Key objectives 2: Check inflation. The best relief package for people would reduce inflation. We need to understand why it had gone up. When a governmentt spends too much then it has to borrow. Borrow in your own country. We borrowed a lot. Interest rate moves up when you borrow. If a government borrows too much, the private sector has a small share to borrow from.

6:37pm

Key objectives 1: we must protect recovery. Stability gained after 2 years, must not be lost. We must understand our situation. International situation is still volatile. Security is still not under control. Our economic weaknesses still exist. The focus must be on austerity. The government must bring discipline on its own spending.

Sheikh says the people are at the heart of this budget.

Twitter comment: atifmali Put tax on agriculture growth .. That's the only solution #budget

6:30pm

Sheikh says this is the first post NFC award budget. Fiscal space of federal government will shrink, more money will be given to the provinces.

Minister says this budget has been developed with transparent means and in consultation with provincial government, consumer groups, industrial representatives, economic advisors and everything is being put forward, nothing was hidden. This is a unique budget.

Comment: Nadir El Edroos says, "I hope everyone pays special attention to the size of debt repayments and interest… already its larger than the defence budget and non-development government expenditure."

Twitter comment: pp #Budget GDP growth 4.1% ?? Is that due to the spinning sector? I find it a little hard to believe though.

6:24pm

Sheikh says we realise we were not able to give as many jobs to people.

Sheikh says we have achieved macro stability, we have checked inflation and we have begun to impair the growth rate.

Twitter Comment: shobz #Budget I thought we were gonna cut down costs. Why are they increasing their salaries? Hell, they even got 3 new ministers.

6:19pm

Finance minister says current government gave 3.5 million households 1000 rupees per month and GDP growth rate reached 4.1%.

Finance minister says Pakistan went to the IMF to get support for balance of payment and prevent default.

Sheikh says that we have witnessed phenomena never seen before, inflation reached 25 per cent and growth rate hit its lowest, 1- 2 per cent.

Sheikh says that we have faced disasters as one nation and stand united even now.

Twitter comment: @Ammar_Haider So lets see which storm gonna come first n will hit us hard. #Budget or #PHET . I hope not #PHET

6:13pm

Finance Minister Abdul Hafeez Sheikh is addressing the national assembly.

Salaries of government employees from grade 17 to 22 increased 35 percent.

Salaries of government employees from grade 1 to 16 increased 50 percent.

10 per cent decrease in the salaries of Cabinet members.

6:08pm

The Budget session is underway, starting with recitation of verses from the Holy Quran.

According to a report in The News, the upcoming budget is unlikely to provide solace to the people.

6:03 pm

Express News reports a 50 per cent increase in the salaries of government employees.

5:50pm

The budget presentation by the federal government is underway.

Earlier sources had revealed that total outlay for the year 2010-11 will be Rs2.9 trillion.

Sources said Rs441 billion have been allocated for Defence, while the budget deficit will be 4 per cent of the GDP. Rs1,660 billion are set as tax collection target, while running expenditure is estimated Rs1,975 billion.

Sources disclosed total volume of development funds will be Rs663 billion, adding that Rs10 billion have been allocated for the Earthquake Reconstruction & Rehabilitation Authority (ERRA).

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