This page has been made to discuss the Budget 2010-11 – Pros and Cons, discuss the salient features, comparisons with earlier budgets and any recommendations or observations – all are welcome!
Text of Federal Budget 2011-12 as delivered by DR.ABDUL HAFEEZ SHAIKH
Minister for Finance, Revenue, Economic Affairs, Statistics and Planning Development
Introduction: Democracy is Functioning
1. Let me start in the name of Allah, the most gracious, the most merciful. I am thankful to Allah for the responsibility placed upon me to present the fourth budget of the democratic Government before this historic Parliament. In presenting the fourth budget, Prime Minister Gilani, has become, after Shaheed Zulfiqar Ali Bhutto and Liaqat Ali Khan, the longest running PM in Pakistan’s history. This is a great tribute to the political leadership of our country, to President Zardari, to the leadership of all the major political parties.
2. This is a historic Parliament. It reflects the will of the people. It has set high standards of debate. It has conducted itself honorably. It has passed landmark legislation. It has strengthened the Federation. It has redressed historical inequities. It has empowered the provinces. Above all, it has restored the constitution.
3. The Constitution of Pakistan was framed in 1973 by Shaheed Zulfikar Ali Bhutto and the national leaders of that time. It was a shining moment for Pakistan. In that moment we all came together. Our Constitution was assaulted in 1977. It took us 32 years to restore the constitution. This national duty was performed by this House. Let us pay a tribute to those who are responsible for meeting the aspirations of our people. Let us pay a tribute to the President Asif Ali Zardari, who voluntarily gave up his powers to the Parliament. Leader of the House, Prime Minister Gilani, and Leader of the Opposition, Chaudhry Nisar Ali Khan also deserve special tribute for playing a key role in ensuring the supremacy of the Parliament. The restoration of the Constitution was another shining moment. We again came together. A new Pakistan emerged. A new beginning was made.
4. Whenever we have come together we have surprised the world with our achievements. In 1947 when we came together we overcame the odds and this country was born. In 1965 when our country was attacked we came together, and aggression was resisted. In 1998 we came together to protect our nation and the world witnessed our capabilities. In the earthquake of 2005 and the floods of 2010 we came together and showed the world our resilience and generosity. 5. This is a Pakistan in which democracy has made a comeback. The new Pakistan is also one of coalition politics. Of give and take. Of the balancing of forces. Of developing shared understanding. Of lively public discourse. Of getting along. Of generating consensus. Of responsiveness to Parliament, the media, the business community, civil society, and above all, to the People of Pakistan. The judiciary is free to interpret the Constitution, to apply checks on the Government, and to provide justice. The media is free to report, to comment, and to critique.
Provincial Governments have been assigned greater responsibilities and given greater resources. The Parliamentary committees provide oversight and scrutiny on the working of the Government. The financial institutions like the State Bank, the Securities and Exchange Commission, and the Competition Commission enjoy extraordinary autonomy. They are empowered to conduct monetary policy, regulate the financial sector, and curb monopolies and cartels. The regulatory bodies such as PTA, NEPRA, OGRA, are free to conduct their affairs without Government intervention. And in an extraordinary act of bipartisanship, a move unheard of in parliamentary history, the Leader of the Opposition is the Chairman of the Public Accounts Committee. And he performs this role with great responsibility and enthusiasm. These are the foundations of a new Pakistan that make us all proud.
6. However, a lot of hard work still needs to be done. We must let democracy take root. We must safeguard our freedoms. We must allow our institutions to strengthen. We have to build sound governance that serves people. Madam Speaker, with hard work I am confident that the foundations for transformation will be securely laid.
The Economy We Inherited
7. Let us all recall where the economy was when this House and this Government took charge in 2008. My friend, Senator Ishaq Dar sahib, who was the first Finance Minister of this Government, was rightly alarmed at the state of the economy that he inherited. He said then;
“The mismanagement of economy has resulted in overspending of Rs. 558 billion
and if the Government does not take corrective measures then fiscal deficit will
touch 9.5 per cent of GDP by June 2008.”
8. By 2007, a combination of oil price increases, expenditure on security and policy lapses had set the stage for a full-blown crisis. The fiscal space created by the 2001 debt rescheduling and successful privatization was squandered by fueling a consumption boom instead of undertaking structural reforms in the country. Double-digit inflation has been recorded since 2006 and had reached to an alarming level of 25%, perhaps the highest ever. Growth had slowed down, fiscal deficit had ballooned to 7.6%, and the external current account deficit was 8.5%. International reserves had declined from 16 to 6 billion dollars and a sharp decline in the value of the rupee and the further evaporation of reserves was imminent.
The Government Response
9. Thus, the Government of President Zardari and Prime Minister Gilani, inherited on March 8, 2008, a fragile economy, an acute BOP crisis and a large fiscal shock. The Government had no choice but to go to the IMF. A stabilization program was sought amounting to $11.1 billion to strengthen our international reserves, and tighten fiscal and monetary policies to fight inflation.
10. The efforts of the Government began to pay off. Inflation was moderated and the. growth momentum started to return. The fiscal deficit was brought down and new pro poor schemes were launched. Areas where we needed to show better results were in domestic resource mobilization, creation of new jobs in private sector, resolving the energy shortages and better targeting of subsidies.
11. One challenge that the Budget for FY 2010/11 faced was that this was the first year after the landmark NFC Award, which substantially enhanced the share of Provincial Governments in the divisible pool and increased the challenge of the Federal government to finance its expenditure obligations. We however, consider it a temporary difficulty that in the long run is the best thing that has happened to augment the welfare of our people. Since, a much bigger share of expenditure responsibilities that affect our people, such as health, education and law and order are provided by the Provincial Governments, we are hopeful that national expenditures on these services will rise as additional resources are transferred from the federation to the provinces.
12. It was against this setting that the Budget for FY 2010-11 was presented in which we took several measures to provide relief to our citizens. Salaries were increased by 50%, benefitting Government employees. Tax exemption limits were increased from Rs 100,000 to Rs 300,000 benefitting 1.2 million low income tax payers. No income taxes were levied. Custom duties were not increased for any item and brought down for 29 to reduce the burden on the public. A comprehensive reform proposal for sales tax was offered doing away with exemptions and special treatments and capital gains tax was imposed to bring short term gains from stock trading into the tax net. Very importantly, a deficit target was fixed at 4% and strong austerity measures were introduced to check inflation. All non-salary expenditures of the federal Government were frozen at the level of previous year’s actual. The PSDP was also frozen at the previous year’s level. To protect the poor and vulnerable segments, targeted social safety nets such as BISP were enhanced.
13. However, soon after the budget three major events jolted us severely which I would like to share with this august House: Our country was struck by the greatest natural calamity of our history: The Great Floods of 2010. The world has not seen a calamity of this magnitude in modern times. No country has had to deal with a disaster of this scale. No area of the country was spared. The floods struck us all the way from the mountains in the north to the sea in the south, covering a length of a thousand miles. All four provinces were affected. Eighty plus districts were inundated. Families saw their loved ones drown. Farmers saw their standing crops – of rice and cotton — destroyed. People saw their homes washed away. Our brothers and sisters had to spend days in fear and nights under open skies. Bridges, roads, railways, dams, power plants, factories, refineries, irrigations systems, schools, hospitals and other infrastructure were impacted. Entire towns like Nowshera, Charsaddah, Muzzafargarh, Rajanpur, Jacobabad, Khairpur Nathan Shah and Qambar-Shadadkot and Jafferabad and Dera Allahyar were submerged or cut off for weeks.
14. Once the waters had receded only then could the economic toll be calculated: 20 million people affected; 1.6 million homes damaged; 2 million hectares of standing crops destroyed; 300,000 cattle lost; 25,000 km of roads destroyed; inflation increased due to disruption of supplies while revenue collection suffered. The overall assessment of damage stood at $10 billion or Rs 850 billion and GDP growth reduced by two percent. The requirements of looking after the flood affected, allocations for their support and rehabilitation, resulted in additional fiscal strain on the Government and the macro-economic framework had to be adjusted.
15. While the floods caused us grave economic hardship….and the effects will be felt for a long time…. they also showed the true character, resilience, dignity, generosity and strength of our people. Many in the international community helped us both through the UN and through bilateral support. These included the US, Japan, UK, China, Saudi Arabia, Turkey, UAE and others. We are thankful to all of them. I would like to pay a special tribute to the First Lady of Turkey who donated her personal necklace to be auctioned to help our brothers and sisters. While others helped, the big story of the Floods is that Pakistanis helped Pakistanis. They opened their homes and their hearts for their brothers and sisters.
The Government, its organisations like the armed services, the NDMA, elected representatives and above all the civil society rose to the occasion and we again became a nation united, both, in sharing of the pain and in sharing of our generosity. Let us pay a tribute to those who reached out. Let us also pay a tribute to overseas Pakistanis, from Oslo to Jeddah and from Houston to Abu Dhabi for their support. Above all let us recognize whose hearts were there for their fellow countrymen. Above all let us honor the resilience, the strength and the grace of the people of Pakistan who have suffered this calamity. We salute you. We will not forget your suffering. And we will do whatever we can to alleviate your suffering and bring you back into the economic mainstream.
16. The Government tried to deal with the floods at various levels. A program of Cash Compensation was launched for giving Rs. 160 billion. In the first phase Rs. 32 billion have been disbursed. Farmers have been given subsidized credit and fertilizer and seeds. The cost of this package is Rs. 8 billion. Hundreds of billions of rupees are being allocated for the rehabilitation and development of flood affected infrastructure.
17. The second factor which impacted us seriously was the unexpected increase in the international price of oil. As you know, dependence on imported oil is a great source of vulnerability and threat to our economy. The price of oil is affected by the increase in the demand from the fast growing economies of Asia, the matters of psychology and speculation, and of course the uncertainty and disruption of supplies from the recent developments in the oil producing Middle East. Madam Speaker, when our last year’s budget was prepared the price of oil was expected to be in the range of 70-75 dollars per barrel. However, the prices rose to $125 per barrel during the year.
18. The high price of oil pushed up prices of many products, caused hardship to our citizens and severely impacted the supply of electricity and threatened the stability of the economy. The Government tried its best to keep prices low for less privileged income groups. The Government even sacrificed more than Rs.50 billion of its own in the process. Unfortunately, there is no good way to subsidize only the needy. The rich benefit from the subsidy as well. Thus, while the Government loses money the benefit is enjoyed not only by the poor users of public transport but also by the rich owners of luxury cars. This is not a fair system. We must show courage and move away from such general subsidies to subsidies only for the deserving. I will say more on this subject later in my
19. Madam Speaker, the third factor which continued to affect us adversely was security. We live in a difficult neighborhood. We are faced with threats to our country’s security. We remain engaged in a struggle for the safety of our citizens. We are the victims of war and terrorism. We have paid a heavy price. 5,000 of our jawans have embraced martyrdom. 30,000 of our citizens have lost their lives. Even women and children have not been spared. Our towns, villages and bazaars have been bombed. Our schools and hospitals have been targeted. Our FC academy, our Intelligence offices, our police stations, our navy installations and even our GHQ has been attacked. Even our mosques and the shrines of Bari Imam, Data Darbar and, Abdullah Shah Ghazi have not been spared. I want to pay a tribute Madam Speaker to our armed forces, to our paramilitary, to our police and above all to our citizens. I want them to know that the nation is with you. That we salute you. And that in these difficult times we have to stand united.
20. This security situation has grave consequences for our economy and the welfare of our people. It affects our perceptions. It affects our business environment. It affects our investment flows. It affects the growth of our economy. And ultimately it affects the welfare of our people.
21. Our Government responded to these challenges by
• Deepening our austerity measures through another round of expenditure cuts amounting to Rs. 20 billion, banning of fresh recruitment and reducing petrol allowances of senior Government officials. • Pruning of expenditures through a Rs 100 billion cut in development expenditures, while preserving regional balance and early completion of
• Further limiting un-targeted subsidies
• Pushing for public sector enterprise reform especially in the area of energy (I will say more about that later)
• In keeping with our objective to strengthen resource mobilization we took several revenue actions:
o While we could not enact the RGST law because political consensus eluded us, our resolve to expand the resource envelope was not weakened. Exemptions and zero ratings in our sales tax system were removed.
o Establishment of an automated refund system
o Levied one-off additional taxes to meet the requirement of our citizens affected by floods. Measures for this effort were (i) a small surcharge on income tax liabilities and (ii) raising the special excise duty by 1.5%.
o We also worked on administrative reform at FBR reform ( I will dwell on this later) which has started to yield results and the targets for revenue collection are being achieved.
22. As we begin the new fiscal year, I am confident that the difficulties we have faced in the last three years are moderating. There are signs of recovery. Most notably, during the year, our exports have shown an unprecedented growth of 28% in the first ten months of the fiscal year. Similarly, remittances are likely to cross the double digit mark at $11.2 billion, which is again historic. Remittances have crossed the one billion mark in each of the last three months–another record. I can also report that we will have a surplus in the current account of balance of payments at the end of this year. Owing to these positive factors, the country has accumulated historic reserves of $17.3 billion and the rupee has displayed stability.
23. Rural areas have benefitted from our policies. Due to the historic decision of our Government to ensure higher commodity prices to our farmers, Rs.400 billion have been injected into our rural economy, which in turn has increased the production of agricultural commodities and the demand for durable goods in the economy has helped revive industrial production and brought prosperity. However, there should be no mistake that our challenges remain daunting and there is little room for complacency.
Challenges and Vision
24. To put the economy on a stable and desirable long-term growth trajectory, several persistent challenges must be addressed NOW! We as a country:
• have struggled with chronic fiscal difficulties for the last 25 years leading us to have worked a number of times under the IMF Programme.
• our growth rate has been less than what was needed to meet our development needs.
• lack a long term focus and consistency in our economic policies to give investors and entrepreneurs a stable enabling environment.
• have public sector enterprises that continue to drain the budget and block market opportunities.
• have regulatory and governance structures that do not encourage investment and the development of competitive markets.
25. Democracy must be bold enough to take on these challenges, I urge my colleagues to come to grips with these challenges. We must deliver development to the people of our society while reducing our aid dependence.
26. We have a young population- 50% of our population is under the age of 20, labor force is growing at 3.6% per annum. To employ the youth entering the labor force, we need a growth rate of 7% per annum and more importantly we must be able to sustain this growth rate for a decade or more. Unfortunately we have never been able to sustain a growth rate of more than 6% for more than three years. Moreover, our productivity growth rate is also far lower than comparator countries. We need to address these issues and begin a period of sustained high growth.
27. We will make “jobs and growth” a national priority!
28. By factoring in our local conditions and after extensive engagement with various stakeholders we have developed strategies to stimulate growth in the economy. The Government tasked the Planning Commission to develop a New Growth framework to address the constraints to investment, productivity and competitiveness. Even in this resource constraint environment where the PSDP is limited, we estimate that a sustained implementation of reform strategy could increase our growth rate by as much as 3 percentage points per annum.
29. While our development program will continue to build infrastructure (and I will talk about that later), let me highlight some aspects of our “jobs and growth” strategy;
• We must make productivity measurement and improvement a priority everywhere. To begin with governance reforms will be developed to put in place performance based and professional management focused on public sector service delivery.
• Public Sector Enterprise (PSE) Reforms and selected privatization will not only improve public sector productivity but will also provide more space for private sector investment.
• More focused and professional regulation along with openness will seek to develop vibrant markets to attract private investment.
• We will configure our cities through better management and liberalized building and zoning regulations to unleash the potential of several industries including construction, retail, ware housing, entertainment, hospitality, transport etc.
• Youth will be engaged and included in every aspect of our economy. We hope to unleash the potential of youth entrepreneurship in several of our new creative cities.
30. This is a large reform agenda, but one whose time has come. The challenge is to work with the various ministries and provincial and local Governments to operationalize and implement this agenda. If we are able to implement this reform agenda well not only will we be able to accelerate our growth to 7%, we will extend gainful opportunities to a large segment of our youth. This is long overdue!
Budget Strategy 2011-12
31. We will strengthen our stabilization efforts this year.
• We hope to reduce the fiscal deficit further.
• We hope to reduce our rate of inflation to single digit levels through continued fiscal consolidation.
• Develop a broad, equitable and stable revenue mobilization system to meet our development needs.
• Maintain and further develop social safety nets for the vulnerable while moving rapidly towards the elimination of untargeted subsidies.
• Strengthen restructuring of the loss making public sector enterprises where possible. We must also find the courage to close down or privatize where required.
• Invest through our public sector development program in vital infrastructure and much needed human resource development.
• Reduce our debt to sustainable levels, well below the required 60% of the
Fiscal Responsibility and Debt Limitation Act (FRDL).
32. To meet these objectives Madam Speaker, we are continuing to reduce the fiscal deficit towards a long run target of 3% of GDP. Recall that last year the deficit was 6.3% of GDP. As I noted before, this year, despite large and unprecedented floods, substantial unprecedented increase in oil prices and large increase in food prices, our efforts have achieved a fiscal deficit of 5.1% of GDP. The budget of 2011-12, Madam Speaker, will target a budget deficit of 4% of GDP. This target will allow us to achieve some debt reduction since our deficit this year is going to be less than our requirement for debt servicing.
33. We hear the complaints of the people and therefore are strongly committed to reducing the rate of inflation. We have already committed to discontinue borrowing from the State Bank through an amendment of the State Bank Act which this House judiciously passed. We will also eliminate our debt to the State bank within a period of eight years. Through these efforts, like other prudent countries, we have ended the period of fiscal policy dominating monetary policy.
34. Meanwhile we are also taking several administrative measures for easing the burden of inflation on the people.
i. We have intervened in commodity markets such as wheat and sugar to ensure stable supplies at affordable prices.
ii. At times such as Ramadan, generous packages for the vulnerable have been made available
iii. Our 7000 plus Utility Stores as well as itwar and juma bazaars have provided crucial supplies at favorable prices to many
iv. Many levels of Government have collaborated to monitor supplies and prices to prevent hoarding, shortages and excessive price increases
v. The Government gave hundreds of billions to energy sector as subsidies
vi. The Government reduced its borrowing from the State Bank through strict controls on spending to reduce inflation.
35. I must emphasize that without eliminating our untargeted subsidies, budgetary control will be impossible. In particular, our power system must operate efficiently and cost effectively without subsidy and ensure full cost recovery. The taxpayer must not pay for the management inefficiencies of these entities.
36. The Government has subsidized power sector losses of over Rs. 1000 billion in the last three years to ensure a lower tariff to consumers. The Government has taken various steps to reduce inter corporate circular debt including picking up of Rs 400 billion, improving PEPCO’s receivables and creating efficiency to reduce the difference between determined and notified tariff. In addition, the Government has initiated conservation programmes to create efficiency in the use of energy to control demand.
37. The Government is taking steps to improve regulatory oversight by empowering NEPRA to notify monthly fuel adjustments in tariff directly. NEPRA will also be professionally upgraded to manage and regulate the power sector more effectively following PEPCO’s dissolution in July, 2011.
38. This Government has added over 2000 MW of electricity generation and another 1400 MW are being added in this year.
39. It must be recognized that reform will only be complete when we have DISCOs and GENCOs that are professionally run as independent corporate entities, controlling their losses, collecting their bills, and earning the trust of their consumers. We have made a start in that direction, thanks to our leadership. The Prime Minister has put in place professional Boards of Directors to begin the process of corporate restructuring. In addition the Cabinet Committee on Restructuring has approved codes of Conduct for the BODs, and rules for inducting CEOs and CFOs. There are plans to bring the private sector to manage these electricity companies.
Public Sector Enterprises (PSE) Reform
40. Public Sector Enterprise inefficiency is choking our economy. These must be urgently restructured. Our Cabinet Committee on Restructuring has developed a restructuring model based on a professional Boards of Directors and by inducting professional management from the market.
41. Some progress has been achieved including restructuring BODs of 8 Power Sector Distribution Companies (DISCOs), National Transmission and Dispatch Company (NTDC), Pakistan Steel Mills (PSM) and Pakistan Railways. Turn around plans for power sector and PSM are under implementation and consequently hemorrhaging has been curtailed in these PSEs. Madam Speaker, we need to strongly push this reform forward in the next year. The restructuring of PIA, PASSCO, USC and TCP is also underway. This is essential to reduce the burden on the budget and improve public service delivery.
42. In addition to our restructuring efforts, the Cabinet Committee on privatization has also identified several public sector enterprises listing on stock market and privatization in the Public Private Partnership (PPP) mode. Given our fiscal problems, resources from the listings, a public offering and PPP privatizations of enterprises such as State Life, National Insurance, Steel Mill, PIA, PSO, PPL and OGDCL could help provide much needed funds for development and other important needs. In addition, these initiatives could invigorate our markets and spark interests of the international investors in Pakistan. Madam Speaker, many countries have involved the private sector to grow their economy. We should also!
43. Even in these difficult times we have remained committed to the ideals of Shaheed Zulifiqar Ali Bhutto and Shaheed Mohtarma Benazir Bhutto, and provided for the poor, the weak and the vulnerable. Our Benazir Income Support Program (BISP) has received acclaim from our development partners. It targets the poor on international standards through surveys and score cards. It uses technology so that the possibilities of corruption are limited. It is also a very large financial inclusion program since the subsidy is routed through the banking system. This year we have spent Rs.35 billion for providing a monthly support of Rs.1000 to such households and next year we will take this amount to at least Rs.50 billion and if additional resources are available this amount may be increased to Rs.65 billion. Other than BISP, there are numerous other programs under the Government auspices, both at federal and provincial levels, such as Bait-ul-Mal, Poverty Alleviation Fund (through micro-finance), EOBI, Workers Welfare Fund and Zakat through which support to low-income families is provided.
44. Let me now turn to the development program of the Government. As you are aware, this was a very difficult year in which resources were diverted to meet the challenges of relief and rehabilitation for the victims of the floods. Then there were unanticipated subsidies for electricity. To contain the budget deficit, which was feared to be exceeding 8%, it was inevitable to cut the development expenditure. At the federal level, the development plan was reduced from Rs.290 billion to Rs.196 billion while the provincial plans were reduced from Rs. 430 billion to Rs. 270 billion. Thus the total development plan was reduced from Rs.720 billion to Rs.466 billion.
45. Clearly, this was not a satisfactory solution but the consequences of following the other path of increasing the deficit through printing of money would have meant devastating effects on our people, especially the weaker segments.
46. The NEC has approved an annual development plan of Rs.730 billion with federal PSDP at Rs.300 billion and provincial plans at Rs.430 billion for FY 2011-12.
47. Let me share some of the key features of the development priorities set in the Federal PSDP. These include completion of projects; regional balance; provision of key infrastructure especially energy; provision for higher education; continuation of vertical programs for health and education which will be continued at the Federal level post 18th Amendment.
48. Major allocations in various sectors approved by the NEC:
a. First, we have allocated 96% of the development plan to on-going schemes, in an effort to minimize the throw-forward in our portfolio. Projects with foreign assistance and infrastructure have been given preference.
b. 55% of the allocations have been made in the infrastructure sector while 44% in the social sectors. It may be noted that social sector allocation is still very high despite devolution of these sectors to the provinces. This is because the federal Government has agreed to continue to bear the cost of some of the key vertical-nation-wide schemes such as lady health workers, immunization and family planning.
c. Within the infrastructure sectors, the top priority has been given to the water sector. Agriculture is the back-bone of our economy. With rising population food security will require major expansion both in agriculture output as well as productivity. While working
on water conservation to make better use of existing resources, our future depends on radically altering the management of water resources in the country. In the present budget we have kept an allocation of Rs.33.2 billion, or 12% of the total PSDP for water sector projects. Besides completion of Mangla Raising, the program will include important projects like Satpara Multipurpose Dam (Gilgit-Baltistan), Gomalzam (FATA), Kachhi Canal (Balochistan), Rainee Canal (Sindh), Lower Indus Right Bank Irrigation and Drainage Sindh, (Balochistan) Effluent Disposal into RBOD, Extension of Right Bank and out fall Drain from Sehawan to Sea, lining of Distributaries and Minors in Sindh.
d. The second most significant allocation in the infrastructure has been accorded to power generation to overcome serious supply and demand gaps in the sector. An allocation of Rs.32.5 billion is planned for power generation, transmission, distribution and
conservation. Apart from this there will be an investment of Rs.83 billion which WAPDA and PEPCO will make through their own resources. These investments will go a long way in addressing the problem of the load-shedding in the country.
e. In the power sector many important projects are included in the plan: Diamir Bhasha Dam (Rs.18 billion), Neelum Jhelum Hydro Project of 1000 MW (Rs.10.8 billion), Guddu Combined Cycle Power Project of 747 MW (Rs.14.6 billion) and Chicho ki Malian Thermal Power Project 525 MW (Rs.13.9 billion). In addition, nuclear power projects such as C-3, C-4 for a capacity of 600 MW are also being implemented and Rs.15.5 billion are allocated. These projects will help meet the growing energy needs of the country.
f. In the Transport and Communication Sector a sum of Rs.50 billion has been allocated. Of this, Rs.36 billion has been allocated for NHA and Rs.15 billion for Railways.
g. Health and Education are now provincial projects. However, some responsibilities have been voluntarily accepted by the Government in view of their critical need for the economy. For instance in the health sector Rs.15 billion have been allocated to finance vertical programs such as Expanded Program for Immunization, Lady Health Workers, Primary Health Care and National Maternal Neonatal and Child Health program. In the education sector, HEC will remain the financial responsibility of the federal Government and during the year Rs.40 billion have been allocated for its development programs besides bearing the full amount of current expenditures. Population welfare program will also be funded by the federal Government at a cost of Rs.4 billion.
h. For special areas, including FATA, Gilgit-Baltistan and AJK an amount of Rs.28 billion has been kept to promote development in these areas.
i. Rs.33 billion have been allocated for People’s Works Program which are small infrastructure schemes undertaken on the recommendations of the Parliamentarians.
j. In keeping with our growth strategy we will invest in the infrastructure of our major cities. In particular, this year we hope to start mass transit projects in Karachi and Lahore.
Relief to Government Employees
49. The Government last year allowed an ad-hoc monthly allowance equal to 50% of basic pay. In addition, there was an increase in Medical Allowance and Pension. Despite tight financial position, the Government is aware of difficulties being faced by Government servants and pensioners. In order to provide some economic relief to the Government servants, following measures are proposed to be extended to the Civil Servants and the Personnel of the Armed Forces with effect from 1st July, 2011:-
i. Pensioners who retired on or after 01.07.2002 may be allowed an increase @ 15% and those who retired on or before 30.06.2002 may be allowed an increase @ 20% in pension.
ii. Existing Conveyance Allowance may be increased by 25% to all the employees in BPS 1-15 and their equivalent in the Armed Forces.
iii. All the Civil Servants and Personal of the Armed may be allowed Conveyance Allowance at the prescribed rates irrespective of their place of duty.
iv. Increase in misc allowance mostly admissible to the employees in BPS 1-15.
v. All the ad-hoc relief allowances granted upto 01.07.2009 may be merged in the Basic Pay Scales-2008 and to introduce the new pay scales.
vi. Compulsory Monetization of transport facility to the Civil Servants in BPS-20 to BPS-22 of the Federal Government.
vii. Increase in pay @ of 15% to all Government Employees and the personnel of Arm Forces w.e.f. 1st July, 2011.
50. It is important to undertake detailed scrutiny of all expenditures in order to reduce Government expenditure and to assess which expenditures are essential for the welfare of the people. The Government is establishing an independent commission to scrutinize all development and current expenditure with a view to ensuring their necessity, efficacy and value to the public exchequer.
51. The salary structure of the Government has been distorted. The Government is thus establishing an independent commission to examine the structure of pay and allowances across the public services to bring equity and fairness across them.
Revised Estimates FY 2010-11, Budget Estimates FY 2011-12
52. Let me now highlight the key features of the Budget 2011-12.
(i) The federal budgetary outlay for FY 12 is proposed at Rs. 2504 billion which is 12.3% higher than current year’s outlay and total net federal revenues are projected at Rs. 1529 billion. This translates into a projected federal fiscal deficit of Rs. 975 billion. Owing to higher revenue transfer to provinces through 7th NFC award, a fiscal surplus of Rs. 125 billion is expected from provinces. Overall fiscal deficit would be at the level of Rs 850
billion i.e. 4% of GDP.
(ii) Gross federal revenues (tax and non-tax) are projected at Rs. 2732 billion. FBR collection is projected at Rs. 1952 billion (FBR tax to GDP ratio of 9.3%).
(iii) A sum of Rs. 1203 billion will be transferred to the provinces under the 7th NFC Award compared to Rs. 998 billion estimated (revised) during the current financial year.
53. I turn now to an issue of the greatest importance in the budget. This is our historic failure to mobilize our resources. Our inability to raise tax-to-GDP ratio.
54. If we are really concerned about our sovereignty, if we actually want a better quality of life for our citizens, then we have to be self-reliant. We have to collect more revenues at the domestic level. A country the size of Pakistan cannot be managed in a self-reliant manner if our tax-to-GDP ratio continues to remain as low as 10%. If the tax-to-GDP ratio of Sri Lanka can be 14%, of India 16%, of Malaysia 18% and Turkey 29% – why is it that Pakistan’s revenue base is one of the lowest in the entire world?
55. Just look at some facts relating to income tax.
• We are a country with a population of 180 million
• Only 2.8 million individuals are registered for income tax
• Only 1.5 million actually file returns
56. There is huge affluence in Pakistan amidst a sea of poverty. Yet the affluent do not wish to be taxed. We have to correct that. The Government has compiled credible data of people living in huge bungalows in posh localities, driving luxury vehicles, possessing assets and bank accounts, traveling abroad at will, who do not pay a single paisa of their income as tax. Indeed, these individuals do not even possess a tax number!
57. The Government has narrowed in on these individuals. We have identified 2.3 million such individuals. We have selected 700,000 individuals, for the first round to make them pay taxes. 71,000 notices have already been issued. In the next three months, each one of them would have been put on notice. Madam Speaker it is our resolve to pursue these non-taxpayers, bring them in the tax net and add to the revenue base of our country. The initial results are most encouraging. 9687 people who were sent notices have filed returns. Of the initial 7484 provisional assessments made, a tax demand of around Rs.3 billion has been created.
58. While the Government is determined to increase the tax base of Pakistan the people of Pakistan lookup to this august House and to its Parliamentarians to lead the way and discharge their responsibility in promoting a culture of paying tax. Each one of us has a personal and a joint responsibility to emerge as leaders in the campaign for tax compliance. God forbid, if we shirk our responsibility in this cause, we would have failed our nation.
59. After the passage of the 7th NFC award and the 18th Constitutional Amendment much of the potential for growth in tax revenue has shifted to the Provincial Governments. The Constitutional amendment gives the Provinces more autonomy but along with it comes the responsibility to maintain fiscal discipline. The enhanced role of Provincial Governments must compel them to take the lead in ensuring an equitable tax structure and to effectively bring in areas such as agriculture income, services and property in the tax net.
60. Our country suffers from an absence of a responsive tax culture. Tax evasion is a big problem. This evasion is only possible with the collusion of the tax machinery. I wish to share with you some facts about tax evasion in our country:
• Only 50% of registered corporate taxpayers and withholding agents file their returns.
• Only 100,000 persons are registered under sales tax. Even out of this small number, 24% do not file sales tax returns.
• There are massive complaints about evasion in customs duties through under-invoicing and under-valuation.
• Alarming anomalies have surfaced in Afghan Transit Trade; the missing containers case is only one instance of its misuse.
61. We have already taken steps to curb tax evasion and corruption in our country. We are fully committed to collect all taxes. FBR has been shaken up. Hundreds of placements have been made without influence and politics. Merit is our only criterion. I have personally addressed the rank and file of FBR. I have made it clear to them that if they work honestly and diligently, I would personally champion their case for rewards and performance bonuses. I have also informed them that corruption and slackness would not be tolerated. They would have to go. There cannot be any compromise on this principle. We cannot afford it! Our country cannot afford it!
61. Let me share with you the results shown by a rejuvenated FBR:
• It is this very FBR which has collated data from different sources, including NADRA, to identify the affluent who do not pay any tax.
• It is this very FBR which is making concerted efforts to bring 700,000 non-taxpayers into the tax net.
• It is this very FBR which, in just three months, has detected a short deduction of Rs.25 billion in withholding taxes.
• It is this very FBR which has detected Rs.26 billion in irregular input adjustment in sales tax; FIRs have been lodged against all companies involved, without fear and favour.
• The FBR has completed 3577 risk based audit, raising a demand of Rs.42 billion and collecting Rs.3.4 billion already.
• The FBR has been re-activated to pursue in Courts, the recovery of tax demand of Rs.131 billion; applications for early hearing of cases and vacation of stay orders beyond six months are being filed and monitored on a monthly basis.
62. This is just a beginning. More needs to be done. My point is that an organization which was the subject of public ridicule and scorn can be changed into an effective and functional organization provided we are prepared to accept and discharge our leadership role. Allow me to share with you some data on a matter of constant public concern, that is, tax refunds:
• The regime of sales tax refunds has been criticized by the stakeholders and businesses for slowness and corruption. It was alleged that even genuine refund cheques were only available after paying a price.
• Taking note of this practice, we introduced a centralized system of cheque distribution at FBR level in end September, 2010. Please see what has happened!
• In the period September to May, 09-10, only 13,000 cheques worth Rs.16 billion were refunded; in the same period for 10-11, 46,600 cheques worth Rs.40 billion have been refunded
63. I can claim with pride that all these cheques were issued to the taxpayers in a most transparent manner and without the exchange of a single paisa of graft. I quote believe that with resolve and good intentions we will be able to minimize and ultimately eliminate corruption from our tax machinery. In this regard, we are optimizing the use of technology to reduce the unnecessary contact between the taxpayer and the taxman.
64. Administrative reforms in the FBR must be accompanied by structural changes in our taxation system. One important example is replacement of our prevalent sales tax system with a modern, integrated and reformed system. The reformed GST legislation is pending with the Parliament, for approval.
Meanwhile, we propose to continue with our structural reforms in this direction.
65. In March, 2011 we removed some zero ratings and exemptions from the sales tax regime. We are continuing with our efforts to remove distortions in our sales tax system by removing more exemptions and zero ratings. However, I hold out a pledge that in our tax proposals relating to sales tax we have protected those sectors which affect the common man. Madam Speaker, I affirm that the Government does not wish to propose any sales tax on food items, education sector and health sector. In addition, no sales tax is leviable on agricultural produce. We also propose to abide by our international commitments on sales tax exemption, as well as protect charities from the operation of sales tax law.
66. Since we have embarked on a program of broadening the tax base and reforming our system of sales tax, I have the privilege to announce a reduction in the rate of sales tax from 17% to 16%. On full implementation of the sales tax reforms we pledge to reduce the rate even further. This reduction, on an across the board basis, would lower prices, provide relief to the common man as well as reduce the cost of doing business for our trade and industry.
67. This budget presents a vision for future tax reform in Pakistan.
• We believe in equitable taxation; all sectors of the economy and all persons deriving income beyond the exemption limit should be brought in the tax net.
• In this context we are working closely with the provinces to improve the systems and collections from agriculture income tax, sales tax on services and taxes on property.
• I have already spoken in detail about the efforts at the federal level to bring non-taxpayers into the tax net and to minimize tax evasion.
• In our vision the tax system needs to be simple. As such, we propose to move away from multiple tax regimes and retain just three main taxes – income tax, sales tax and custom duties.
68. In furtherance of this objective, I am happy to announce that:
• All special excise duties are proposed to be abolished.
• In addition, 15 items out of the list of 46 federal excises are proposed to be removed from the excise law.
• 392 regulatory duties out of 397 are proposed to be abolished, limiting these to luxury vehicles, cigarettes, arms and ammunitions, betel nuts and sanitary ware / tiles.
• FED on cement shall be phased out in 3 years. A reduction of Rs. 200/MT is proposed in the first year and equal reduction of the balance of Rs. 500/MT in the next two budgets.
• Further, federal excise duty on beverages is also being phased out. It is being reduced to 6% this year and would be completely abolished next year.
69. The revenue loss on account of the above measures would be compensated by the following:
• Removal of selected exemptions and zero-ratings under GST.
• Revision of federal excise structure on cigarettes.
• Revision in rate of tax in lieu of value added tax on commercial importers from 2% to 3%.
• Improving tax compliance through effective monitoring and risk based audits
70. We are contemplating different schemes to incentivise the taxpayer to become fully compliant; prizes on sales tax receipts would be offered during the year to customers who retain these receipts. In this way, we propose to create a partnership with our citizens and make then responsible for ensuring that taxes paid by them are not pilfered by withholding agents.
71. Several initiatives have been taken in this budget to promote investment, which include increasing the money base for private credit, special incentives for equity based projects, BMR, expansion of existing production capacity and capital market growth measures.
72. Allow me to highlight the fiscal measures for banking sector/capital market growth measures:
• In order to increase the money base for private credit and to provide an incentive to individuals and non-residents, the tax rate on interest income from Government securities will be 10% with no tax return requirement.
• The rate of withholding tax on cash withdrawal is being brought down from 0.3% to 0.2%.
• Last year we provided a 5% tax credit to a company in the year of its enlistment. This year, this rate is being increased to 15%.
• Limit for adjustment of minimum tax on turnover is being increased from 3 years to 5 years.
73. In order to promote savings, some of the measures taken are:
• Tax credits for investment in shares through IPOs and in voluntary pension funds are being allowed at 15% from 5%.
• Capping of Rs. 500,000 is being deleted to encourage investments in voluntary pension scheme.
And for facilitating exports:
• Supply against international tenders is proposed to be treated as deemed exports since winning of international tenders by local bidders is important to promote entry into international procurement markets.
74. We are aware of the increase in cost of living and of our responsibility to deliver financial assistance where needed and support families and their children. At the cost of repetition, let me announce that:
• The GST rate is being reduced from 17% to 16%.
• Special excise duty is being abolished. Some federal excise duties are also being abolished; others are being phased out.
• The Government has also decided to raise the tax-free limit from Rs. 300,000 to Rs. 350,000. However incomes above Rs. 300,000 would continue to be subjected to filing of returns, to institute a culture of compliance; no wealth statement would be required on incomes upto Rs. 1 million; at present the threshold is Rs. 500,000.
• We are not increasing custom duty on any product. In fact, for 31 categories, customs duty is being simplified and reduced.
• Custom duty on 22 essential raw materials for the pharma industry used for producing anti-biotic, anti-allergic, anti-diabetic and TB medicines are being reduced substantially.
• I am also happy to announce that as promised, there is no extension in the duration of the one-off taxes levied due to floods:
15% surcharge on income tax and 1.5% increase in special excise duty.
• Regulatory duty on 392 out of 397 items is being abolished.
75. Our country suffers from the menace of smuggling and under-invoicing.
The Afghan Transit Trade facility is being abused by some of our importers creating distortions in the market. I am happy to report that we have signed the Afghan Pakistan Transit Trade Agreement (APTTA) 2010. Under the agreement it has been made mandatory to submit financial guarantees equivalent to leviable taxes. This guarantee would only be releasable on cross-match of data with Afghan Customs. The following measures are also noteworthy:
• Equipment support such as weigh bridges, container scanners and tracking posts will be installed to monitor movement of containers
• transport of afghan transit goods has been restricted to vehicles of customs bonded carriers hired by NLC for effective monitoring and inventory control
• A mechanism for exchange of data through Electronic Data Interfacing (EDI) is being established at Torkhum and Chamman.
• a national valuation database has been established which provides online access for verification of mis-declaration of value.
76. I have presented the highlights of our taxation measures for the financial year 2011-12. The full details have been provided in the Finance Bill.
77. I would like to graciously appreciate the guidance and support that I and my team continue to get from the President, Prime Minister, my Cabinet colleagues and all other members of the Government. This year has been difficult. But our efforts have paid off. With difficulty we seem to have navigated troubled waters and are beginning to see calm sea. However, there is much to be done to consolidate stabilization and accelerate and sustain growth.
78. Through this year we have engaged in an extensive consultative process across the country to share the challenges that we face. In addition we have been totally transparent in all policy deliberations with our allies as well as the opposition. In this connection I would like to extend my gratitude and professional appreciation to our allied political parties-ANP, MQM and PML-Q. I and my team have benefited enormously from interactions with several civil society organizations and forums, such as the Chambers of Commerce. In particular I would like to mention the efforts of the experts of the Economic Advisory Council and the Revenue Advisory Council.
79. The Budget that I have presented to you today is ambitious but realistic. It is embedded in a medium term macroeconomic strategy that will create enabling environment for strong private sector investment. I am convinced that implementation of this budget and strategy will secure the foundations of financial discipline that we have been seeking for decades which will push the economy on to a higher and sustainable growth path.
80. We have laid an ambitious program of reform before you. This reform program is essential for delivering the vision of a poverty-free and a prosperous Pakistan entrusted to us by Shaheed Mohtarma Benazir Bhutto and Shaheed Zulfiqar Ali Bhutto. We must prove ourselves worthy of their legacy.
81. I hope that all of us will put aside our minor differences to bring progress and prosperity to our people who are beset with security challenges, economic hardships and unrealized dreams. With the help of a united Parliament we can be assured of a strong implementation of the program and policies that we have presented to you today. It is this quality of unity that is required to accelerate us out of a current recession into a high growth trajectory of over 7% per annum to employ our youth.
82. Let us all feel the resolve of our forefathers who created this nation and take on the challenge to carry it into the 21st century. We must all recall the golden rule of the Quaid-i-Azam. I quote: “there would be ample revenues from equitable taxation levied in a manner consistent with social justice to finance good governance and allow us to have a state as good as any in the world and better than many sovereign countries on the map of the world today”
83. I thank you Madam Speaker! Pakistan Paindabad
The budget 2011-12 has the following main salient features:
.. The total outlay of budget 2011-12 is Rs 2767 billion. This size is 14.2% higher
than the size of budget estimates 2010-11.
.. The resource availability during 2011-12 has been estimated at Rs 2463 billion
against Rs 2256 billion in the budget estimates of 2010-11.
.. Net revenue receipts for 2011-12 have been estimated at Rs 1529 billion
indicating an increase of 11% over the budget estimates of 2010-11.
.. The provincial share in federal revenue receipts is estimated at Rs 1203 billion
during 2011-12 which is 16.4% higher than the budget estimates for 2010-11.
.. The capital receipts (net) for 2011-12 have been estimated at Rs 396 billion
against the budget estimates of Rs 325 billion in 2010-11.
.. The external receipts in 2011-12 are estimated at Rs 414 billion.
.. The overall expenditure during 2011-12 has been estimated at Rs 2767
billion of which the current expenditure is Rs 2315 billion. Current expenditure
shows an increase of less than 1% over the revised estimates of 2010-11, while
development expenditure will increase by 64.4% in 2011-12 over the revised
estimates of 2010-11.
.. The share of current expenditure in total budgetary outlay for 2011-12 is
84% as compared to 90% in revised estimates for 2010-11.
.. The expenditure on General Public Services (inclusive of debt servicing transfer
payments and superannuation allowance) is estimated at Rs.1660 billion which is
71% of the current expenditure.
The salient features of the PSDP 2011-12 are as under:-
.. The size of Federal Public Sector Development Programme (PSDP) for 2011-12
is Rs. 300 billion. While for Other Development Expenditure an amount of Rs.97
billion has been allocated. The PSDP shows an increase of 53% over the revised
.. The provincial PSDP for 2011-12 has been approved at Rs.430 billion against
revised estimates of Rs.266 billion.
.. An amount of Rs.10 billion has been allocated to ERRA in the PSDP 2011-12.
.. Within the resource available, allocations have been made to maximize
economic impact of the development programme and to achieve core objective
of growth reducing poverty and to ensure balanced development.
.. The proposed federal development programme places an equal emphasis on
physical infrastructure sector (55%) and social sector (44%).
.. Water sector has been allocated Rs.36 billion i.e. 12% of total federal PSDP.
Raising of Mangla Dam including resettlement Satpara Multipurpose Dam,
Gomal Zam Dam, Kachi Canal, Raini Canal and other water sector projects have
been provided appropriate funds.
.. To overcome energy shortage, investment would be made for power generation,
distribution and conversation by the government in WAPDA during 2011-12 at
Rs.115 billion which include Rs.32.5 billion through budget. This will help in
reducing power shortage in the country.
.. For Basha Diamer Dam, Rs.18 billion has been allocated from budget while
WAPDA will arrange Rs.2.5 billion from the market. In addition, Neelam Jhelum Hydro Power Project, Gudu Steam Power Project and Combined Cycle Power Plant at Chechoki Malian are being implemented by WAPDA.
.. In addition to hydel projects, nuclear sources would also be used for power
generation. An amount of Rs.22 billion has been allocated to Pakistan Atomic
.. Transport and Communication Sector has been allocated Rs.55 billion. NHA has
been allocated Rs.40 billion and Rs.15 billion has been allocated to Railways.
This would ensure economic integration and balance regional development.
.. Health sector will be devolved to the provinces by June, 2011, however, to
implement CCI decision, Rs.15 billion has been proposed to finance different
vertical health programmes.
.. HEC and Population Welfare Programme will also be financed by federal
government with an allocation of Rs.14 billion and Rs.4 billion respectively.
.. Allocation for Special Areas (AJK, GB and FATA) is at Rs.28 billion with a view to
accelerate development activities in less developed areas.
.. Allocation for special programmes (People Works Programme-I and People
Works Programme-II) an allocation of Rs.33 billion has been made.
Following relief measures are proposed to be extended to the Civil Servants and
the Personnel of the Armed Forces with effect from 1st July, 2011:-
.. An increase of 15% in pay of all Civil Servants and Personnel of the Armed
Forces with effect from 1st July, 2011.
.. Pensioners who retired on or after 01.07.2002 may be allowed an increase @
15% and those who retired on or before 30.06.2002 may be allowed an increase
@ 20% in pension.
.. Existing Conveyance Allowance may be increased by 25% to all the employees
in BPS 1-15 and their equivalent in the Armed Forces.
.. All the Civil Servants and Personnel of the Armed may be allowed Conveyance
Allowance at the prescribed rates irrespective of their place of duty.
.. Increase in misc allowances mostly admissible to the employees in BPS 1-15.
.. All the ad-hoc relief allowances granted upto 01.07.2009 will be merged in the
Basic Pay Scales-2008 and to introduce the new pay scales.
.. Compulsory Monetization of transport facility to the Civil Servants in BPS-20 to
BPS-22 of the Federal Government.
Pakistan Budget 2011- 2012′ Highlights of PSDP 2011-12 | Public Sector Development Programme (PSDP) Highlights
Highlights of PSDP 2011-12: Pakistan Budget 2011- 2012′ Highlights of PSDP 2011-12 and some of more Following are the highlights of Public Sector Development Programme (PSDP) 2011-12:
Total amount of Rs. 730 billion has been allocated in PSDP-2011-12 for various ongoing and new schemes.
Out of total PSDP, the federal share is Rs. 290 billion, provincial share Rs.430 billion whereas Rs.10 billion would be spent for Reconstruction and Rehabilitation of Earthquake-hit areas.
Following are the main allocations:
— Rs.36136.0 million for Water and Power Division (Water Sector)
— Rs.22000.0 million for Pakistan Atomic Energy Commission.
— Rs.10370.9 million for Finance Division.
— Rs.15000.0 million for Railways Division.
— Rs.31974.6 million for Planning and Development Division.
— Rs.14000.0 million for Higher Education Commission.
— Rs.2137.8 million for Industries and Proudction division.
— Rs.5800.0 million for Interior Division.
— Rs.3845.7 million for Defence Division.
— Rs.1396.0 million for Housing and Works Division.
— Rs.2692.1 million for Cabinet Division.
— Rs.1146.6 million for Science and Technological research Division.
— Rs.1200.0 million for Law and Justice Division.
— Rs.1970.0 million for Revenue Division.
— Rs.149.7 million for Petroleum and Natural Resources Division.
— Rs.793.1 million for Information Technology and Telecom Division.
— Rs.1454.7 million for Defence Production Division.
— Rs.424.6 million for Commerce Division.
— Rs.172.0 million for Communication Division (other than NHA).
— Rs.744.3 million for Ports and Shipping Division.
— Rs.350.0 million for Pakistan Nuclear Regulatory Authority.
— Rs.285.0 million for ministry of Foreign Affairs.
— Rs.534.2 million for Narcotics Control division.
— Rs.33.8 million for Establishment Division.
— Rs.18047.5 million for Kashmir and Gilgit Baltistan division.
— Rs.10000.0 million for States and Frointier regions division.
— Rs.630.1 million for Information and Broadcasting Division.
— Rs.150.0 million for Textile Industry Division.
— Rs.252.4 million for Statistics Division.
— Rs.161.1 million for Economic Affairs Division.
— Rs.677.4 million for Capital Administration and Development Division.
— Rs.70.0 million for Inter Provincial Coordiantion Division.
— Rs.32500.0 million for WAPDA (Power)
— Rs.39900.3 million for National Highway Authority.
The economy has shown resilience despite severe challenges i.e. floods, security situation, energy shortages, rising international oil and commodity prices and higher interest rates.
GDP growth from 2.4% (revised) in 2010-11 to 4.2% (target) 2011-12.
Inflation (CPI) from 15.5% during 2010-11 to 12.0% in 2011-12(target).
Fiscal Deficit reduced from 6.3% in 2009-10 to 5.1% in 2010-11 and 4% of GDP in 2011-12 (target). During 2010-11 past arrears amounting to Rs.120 billion (0.6% of GDP) were paid. Fiscal deficit 2011-12 including grants would be at 3.4% of GDP.
Exports grew by 27% in the first ten months and will cross $ 24.5 billion mark.
Remittances are likely to cross $ 11 billion.
The foreign reserves above $ 17 billion.
Pakistani Rupee is stable.
FBR tax collection at Rs.1320 billion for 11 months i.e. an increase of 16% over the same period last year.
Current account in surplus July-April 2011 (US $ 748 million).
- Federal Finance Minister Dr. Hafeez Shaikh begins budget speech amid opposition slogans “US slavery unacceptable, Federal Budget unacceptable”.
- Finance Minister begins budget speech at 06:10 pm.
- Finance Minister praises President, Prime Minister and Opposition leader Chaudhry Nisar.
- PML-N’s members agitated in front of Speaker’s dais.
- JUI-F, PPP Sherpao lawmakers among protesting members.
- I (Dr Hafeez Sheikh) pay tribute to President Asif Ali Zardari who handed over his powers to the Parliament.
- I congratulate Prime Minister Yusuf Raza and Opposition Leader Chaudhry Nisar Ali Khan for upholding the supremacy of the democratic norms in the parliament.
- The foreign reserves stood at as low as 6 billion dollar when the incumbent government took over in 2008. Strict monetary policy was adopted which helped control the sky-rocketing inflation and boost energy sector.
- Special relief was provided in terms of funds and other facilities to flood affectees and peasants following the devastating floods in 2010.
- This is the fourth budget of PPP government: Hafeez
- Salaries of Government employees are being raised by 15 %. Last year they were given 50 % raise.
- Remittances reached record 12 billion dollars: Sheikh
- 35000 civilians and 5000 troops lost their lives due to security situation in the country.
- Exports rose by 26 %.
- Remittances shot up to a record level of 12 billion dollars.
- The foreign exchange reserves are now touching 17.3 billion dollars and rupee value became stable.
- Inflation much lower due to government policies: finance minister
- We need to continue fiscal policies: Hafeez
- Forex reserves were as low as six billion dollars in 2006: minister
- Economic stability is government’s top priority: minister
- Inflation will be brought to a single digit level.
- Inflation rose by 25 % in the current fiscal.
- Development Budget had to be slashed by Rs100 billion in current fiscal.
- Rs 20 billion were saved through austerity drive adopted by the government.
- Rs 15 billion are being allocated for Railways.
- Rs 2.10 billion for industries and production.
- Rs 1.5 billion for defence production.
- Rs 290 billion for National Development Program.
- PML-N female lawmakers threw bangles towards finance minister.
- PML-N’s Ahsan Iqbal shows bread to PM Gilani.
- FBR sets revenue target of Rs 1952 billion.
- GST reduced from 17 to 16 percent.
- Taxable income increased from Rs 300,000 to 350, 000.
- For the first time the proposals include elimination of special excise duties.
- Tax reforms are being adopted by this government.
- Only 1.5 million people out of the population of 180 million people pay tax.
- Federal excise duty on soft drinks is being reduced from 12% to 6%.
- 31000 rich people have been issued notices to bring then into the tax net. 7000 more such people will be issued notices in this regard.
- 2.3 million new tax payers will be brought into the tax net.
- Fifteen out of 40 items are being exempted from Federal Excise Duty.
- Proposals include complete abolishment of Federal Excise Duty in the next two years.
- Budget deficit will be Rs 850 billion (4 percent of GDP).
- Conveyance allowance for government employees of Grade 1 – 15 is being increased by 25 percent.
- The total outlay of budget 2011-12 is Rs 2767 billion. The size is 14.2 per higher than the size of budget estimates of 2010-11.
- The resource availability during 2011-12 has been estimated at Rs 2463 billion against Rs 2256 billion in the budget estimates of the outgoing fiscal year.
- Net revenue receipts for 2011-12 have been estimated at Rs 1529 billion indicating an increase of 11 percent over the budget estimates of fiscal year 2010-11.
- The provincial share in federal revenue receipts is estimated at Rs 1203 billion during 2011-12 which is 16.4 per cent higher than the budget estimates for 2010-11.
- The capital receipts (net) for 2011-12 have been estimated at Rs 396 billion against the budget estimates of Rs 325 billion in 2010-11 indicating an increase of 11 per cent.
- The external receipts in 2011-12 are estimated at Rs 414 billion. This shows an increase of 7.1 per cent over the budget estimates for 2010-11.
- The overall expenditure during 2011-12 has been estimated at Rs 2767 billion of which the current expenditure is Rs 2315 billion and development expenditure at Rs 452 billion. Current expenditure shows increase of less than one per cent over the revised estimates of 2010-11, while development expenditure will increase by 64.4 per cent in 2011-12 over the revised estimates of 2010-11.
- The share of current expenditure in total budgetary outlay for 2011-12 is 83.7 per cent as compared to 89 per cent in revised estimates for 2010-11.
- The expenditure on General Public Services (inclusive of debt servicing transfer payments and superannuation allowance) is estimated at Rs 1660 billion which is 71.1 per cent of the current expenditure.
- The size of Public Sector Development Programme (PSDP) for 2011-12 is Rs 730 billion. While for Other Development Expenditure an amount of Rs 97 billion has been allocated. The PSDP shows an increase of 58 per cent over the revised estimates of 2010-11.
- The provinces have been allocated an amount of Rs 430 billion for budget estimates 2011-12 in their PSDP as against Rs 373 billion in 2010-11.
- An amount of Rs 10 billion has been allocated to Earthquake Reconstruction and Rehabilitation Authority (ERA) in the PSDP 2011-12.
- National Assembly session adjourned till June 6, 2011
ISLAMABAD: The government will spend Rs56 billion on internal security of the country during 2011-12 as the intensity of terrorist attacks, especially after the killing of Al Qaeda chief Osama bin Laden in Abbottabad, has made the job of the departments concerned more challenging.
The projected allocation includes Rs5.8 billion for various projects under the Public Sector Development Programme (PSDP).
It is not known how much money will be spent on training police and civil armed forces personnel and what steps are being taken to equip them with latest weapons and other apparatus.
Most of the money allocated for security departments will be spent on pay and allowances, accommodation and construction of buildings.
The allocation is Rs1.5 billion more than the Rs54.58 billion spent this year.
The break-up of the allocation shows that Rs457.13 million has been earmarked for the interior division, Rs4.77 billion for Islamabad police and local administration, Rs856.57 million for passport outfit and Rs24.08 billion for civil armed forces.
The Frontier Constabulary will get Rs5.63 billion, Coast Guards Rs1.71 billion and Rangers Rs11.45 billion, while Rs1.96
billion has been set aside for ‘other’ expenditures.
A sum of Rs755 million has been allocated for the administration of public order, Rs14 million for prison administration, Rs85 million fire protection and operation and Rs1.05 billion for police.
Significant projects to be financed under the PSDP include the Integrated Border Management System (IBMS) for which Rs220.58 million has been allocated.
During the year, Rs102 million will be spent on raising the Balochistan Constabulary, Rs25 million on conversion of B- into A- areas in Balochistan and Rs300 million on setting up the National Forensic Science Agency headquarters and the Islamabad laboratory.
The Pakistan Automated Fingerprint Identification System (PAFIS) Phase-II has been allocated Rs300 million, procurement and installation of a Non-Intrusive Vehicle X-Ray System (NVIS) Rs150 million, Machine-Readable Passport and Visa Project’s phase-I Rs60 million and Phase-II Rs900 million, construction of accommodation for Bhitai Rangers in Karachi Rs200 million and for Abdullah Shah Ghazi Rangers Rs200 million.
A sum of Rs81.17 million has been allocated for hardware and software upgrading of the National Data Warehouse at Nadra headquarters, Rs497 million for the Islamabad development package, Rs30 million for the construction of a Judicial and Administration Complex in Islamabad, Rs147 million for the Population Welfare Programme and services in Islamabad, Rs300 million for the National Response Centre for Cyber Crimes Phase-II, Rs39.91 million for allied facilities at the National Public Safety commission building.
Purchase of land and allied facilities under occupation Qalat Scouts in Balochistan will cost Rs120 million and Rs186 million has been earmarked for the Safe City Islamabad Project.
ISLAMABAD: With Rs300 billion revenue adjustment through reduction in subsidies and withdrawal of tax exemptions, sweetened with relief to government servants and pensioners, Finance Minister Dr Abdul Hafeez Shaikh announced on Friday the PPP-led coalition government’s fourth budget which envisaged a federal expenditure outlay of Rs2.504 trillion and budget deficit of Rs975 billion (4.6 per cent of GDP).
The announced outlay, however, did not match with budget documents that put the federal expenditure at Rs2.767 trillion and was supported by detailed expenditures and revenues. In order to meet an agreement with the International Monetary Fund to revive the $11.3 billion loan programme, the finance minister said the provinces would present a cash surplus of Rs125 billion during next year to contain the overall consolidated deficit at four per cent of GDP, or Rs850
The federal budget set an ambitious tax revenue target of Rs1.952 trillion, which also involved a sweet-and-sour mix of reduction in general sales tax rate by one per cent, removal of special excise duties and imposition of sales tax on more than 15 major categories through withdrawal of the existing exemptions without calling it RGST.
Dr Hafeez said administrative reforms in the Federal Board of Revenue would be accompanied by structural changes and reforms in taxation for an equitable and fair system. “The reformed GST legislation is pending with parliament for approval. Meanwhile, we propose to continue without structural reforms in this direction”.
Sakib Sherani, a former principal economic adviser to the government, said the tax revenue target of Rs1.952 trillion was unrealistic, withdrawal of subsidies was an overambitious attempt that would be difficult to implement ahead of elections and a four per cent fiscal deficit target was simply not achievable.
He said the reduction in sales tax rate from 17 per cent to 16 per cent would be offset by reduction in subsidies and hence would have no significant impact in reducing inflation. This argument is supported by a government decision to withdraw Rs229 billion in subsidies, mostly given to the power sector, including KESC, for tariff differential. The subsidies which stood at Rs395 billion during the current fiscal year would be contained at Rs166 billion next year. Another Rs70 billion will come through withdrawal of more sales tax exemptions.
It was in this context that the finance minister announced empowering the National Electric Power Regulatory Authority (Nepra) to directly notify monthly fuel adjustments in tariff. He said there were plans to bring the private sector to manage public sector entities. He talked about listing of public sector entities on the stock exchange to improve their performance, but did not set any target to generate revenues from these entities.
Dr Hafeez said the government would continue to provide relief to people on wheat and sugar through provision of strategic reserves to the Utility Stores.
But budget documents suggested that Rs21 billion in subsidies provided to both the Utility Stores Corporation (USC) and Trading Corporation of Pakistan for these two items had been drastically cut to a paltry Rs6 billion.
Total resources for the next year have been estimated at Rs2.767 trillion. This includes Rs2.074 trillion in tax revenue — FBR taxes of Rs1.952 trillion and non-tax revenue of Rs658 billion. Another Rs304 billion is estimated to come from bank borrowings. External receipts have been estimated at Rs414 billion while the provincial share out of federal revenues has been put at Rs1.203 trillion.
Of the total expenditure of Rs2.767 trillion, current expenditure has been put at Rs2.315 trillion and development expenditure at Rs452 billion.
An amount of Rs495 billion has been allocated for defence expenditure and Rs295 billion for grants and transfers mostly to meet unusual security expenditure. Put together, the overall security-related expenditures are estimated at Rs790 billion.
An additional burden of Rs25 billion has been estimated to come from increase in salaries for government employees and their pensions. The existing pensions will eat away about Rs96 billion, of which Rs73 billion will go to retired armed forces personnel.
The resource availability for 2011-12 has been estimated at Rs2.463 trillion – a rise of Rs207 billion over the current year’s budget estimates of Rs2.256 trillion.
The expenditure on general public service (including debt servicing transfer payments and superannuation allowance) is estimated at Rs1.66 trillion, which is about 71 per cent of the current expenditure. The Public Sector Development Programme has been put at Rs730 billion, including a federal chunk of Rs300 billion.
With the slogan of “jobs and growth”, Dr Hafeez emphasised the change in growth strategy from infrastructure development to domestic market developments, better regulatory authorities and improvement in state-run enterprises. He said the government would strengthen stabilisation efforts and reduce inflation to single-digit next year through continued fiscal consolidation.
PAY AND PENSIONS: The finance minister announced a 15 per cent increase in pensions of those government employees who retired on or after July 1, 2002, and 20 per cent for those who retired on or before June 30, 2002. Likewise, a 15 per cent increase in salary of all government employees and armed forces personnel has been allowed with effect from July 1, 2011.
Dr Hafeez announced merger of all ad hoc relief allowances allowed to government employees up to July 2009 into the basic pay scale-2008 to introduce new pay scales. There will also be compulsory monetisation of transport facility to civil servants in grade 20-22 of the federal government.
The conveyance allowance has also been increased by 25 per cent for all employees in BPS 1-15. All civil servants and armed forces personnel have been allowed conveyance allowance at the prescribed rates irrespective of their place of duty. The finance minister passed on the responsibility of increasing revenues to provincial governments, saying their enhanced role after the 18th Amendment must compel them to take the lead in ensuring an equitable tax structure and to effectively being in areas such as agricultural income, services and property in the tax net.
He announced continuation of removal of zero-rating and exemptions form sales tax introduced in March and said the effort would continue to remove distortions by removing more exemptions and zero ratings, without affecting food items, education and health sectors.
INVESTMENT: Dr Hafeez said the objective of tax reforms was to make the system simple and move away from multiple tax regimes to retain just three of them — income tax, sales tax and customs duties. In this regard, all special excise duties have been abolished. Likewise, 15 items out of a list of 46 federal excise items are proposed to be removed from the excise law; 392 regulatory duties out of 397 have been abolished, limiting them to luxury vehicles, cigarettes, arms and ammunition, betel nuts and sanitary ware.
The finance minister said federal excise duty on cement would be phased out in three years, with a reduction of Rs200 per metric ton next year and remaining Rs500 per ton over the next two years. The federal excise on beverages has also been reduced from 12 per cent to six per cent in the same fashion.
He said special initiatives had been taken to promote investment, equity based projects, BMR, expansion of the existing production capacity and capital market growth. The tax rate on interest income from government securities will be 10 per cent with no tax return requirement.
The rate of withholding tax on cash withdrawals from banks has been brought down from 0.3 per cent to 0.2 per cent. Tax credit for a company to enlist on the stock market has been increased to 15 per cent from five per cent, while the limit for adjustment of minimum tax on turnover is being increased from three to five years.
Likewise, tax credit for investment in shares through IPOs and in voluntary pension funds has also been increased to 15 per cent from five per cent
ISLAMABAD: Pakistan has matched India’s increase in defence spending, jacking up its defence budget by nearly 12 per cent for the next fiscal year amid renewed US pressure for a full-scale military operation in the North Waziristan tribal agency.
Defence allocation has been increased to Rs495.2 billion for 2011-12, compared to last year’s Rs444.2 billion. Interestingly, India had also raised its defence expenditure by 12 per cent in February this year, though the size of their budget is much bigger than Pakistan’s.
Citing resource constraints, the government, however, refused to accept the original request by the military establishment which had sought an 18 per cent increase, or Rs524 billion, for defence expenditure. According to the budget document, of the total Rs495.2 billion, Rs206.4 billion has been allocated for employee-related expenses, Rs128.2 billion for operating expenses and Rs117.5 billion has been set aside for physical assets.
The figures, however, do not include over Rs73 billion allocated for pensions of military personnel that would be paid from the civilian budget and a separate allocation for security-related expenses in a move, which critics say, seeks to conceal the actual defence budget.
Calls have been made for greater scrutiny of the defence spending since the May 2 Abbottabad episode that embarrassed the military establishment over their ignorance of Osama bin Laden’s presence in Pakistan and the US operation.
The defence budget has never been debated in detail in parliament. “Parliament should critically review defence allocation in the budget,” said Bushra Gohar, lawmaker from the Awami Nation Party, a coalition partner in the government.
The main opposition party, the Pakistan Muslim League-Nawaz (PML-N), has also questioned the increase in defence spending. “In the long run, it’s a recipe for disaster,” said PML-N’s Information Secretary Ahsan Iqbal. “Investing in education is the only way to ensure security,” he added.
However, military officials tried to play down the increase in defence expenditure, arguing that additional funds have been sought to meet expenses of troops’ deployments in restive areas, ration expenses and to offset the impact of the depreciation of rupee against dollar and double-digit inflation.
In his budget speech, Finance Minister Abdul Hafeez Shaikh briefly commented on the increase in defence spending, saying that the current security situation warranted the hike.
And it is not just the human cost. The battle against militancy has cost Pakistan $68 billion in the same period. Interestingly, while the US has just provided over $13 billion to Pakistan over the last 10 years, the losses in 2010-11 alone were recorded to be $17.9 billion.
Published in The Express Tribune, June 4th, 2011
The additional allocation of Rs 150 billion for 2011-12 is Rs 8.4 billion or almost six per cent more than the similar outlay for the outgoing fiscal.
In the outgoing fiscal, the government allocated Rs 110 billion for contingent liabilities but actually spent Rs 141.7 billion, according to budget documents.
The stated defence budget for the outgoing fiscal was Rs 442 billion.
The Armed Forces Development Programme too was conceived by Musharraf’s regime to equip the military with the latest combat aircraft, surveillance planes and systems, submarines and other sophisticated weapons.
This programme will continue till 2025.
However, the Finance Ministry official told the journalists that the government has decided to reduce the amount it expects to receive from the US Coalition Support Fund in a substantial manner.
In the outgoing fiscal, the government had estimated that the US would reimburse around USD 1.3 billion but the actual reimbursements had amounted to USD 745 million so far.
The US is “using dilly-dallying tactics” while making reimbursements and uses the funds as “leverage to achieve its strategic goals,” The News daily quoted its sources as saying.
The US now wants to Pakistan to launch a fresh anti-militancy offensive in the weeks ahead after which the funds might be reimbursed, the sources said.
In the wake of Pakistani military’s failure to detect Osama bin Laden’s presence in the garrison city of Abbottabad and the daring terrorist raid on a naval airbase in Karachi that killed 10 security personnel and destroyed two surveillance aircraft, opposition parties like the PML-N have called for a debate on defence spending in Parliament.
Some defence analysts have demanded that defence allocations should be linked to performance.
The opposition parties have also demanded that full details of the defence budget should be placed in Parliament but the government stuck to the prevalent practice of tabling the outlay in the form of a brief statement.
Of the stated defence budget of Rs 495 billion, Rs 206.5 billion were allocated for employees-related expenses, Rs 128.3 billion as operating expenses of the armed forces, Rs 117.6 billion for creating physical assets and Rs 42.7 billion for civil works
General subsidy system being abolished: Hafeez Shaikh
Debt to GDP ratio 55.5 pc till end March: Dr. Hafeez Shaikh
Highlights of tax – APP
— The basic exemption limit on incomes is proposed to be enhanced from
Rs.300,000 to Rs.350,000
— A tax credit equal to 100% of tax payable is proposed to encourage enhanced equity financing, and to provide relief to new corporate industrial undertakings established on or after 1st July 2011, with 100% equity financing. —The rate of tax deductible on Cash Withdrawals from Banks is proposed to be reduced to 0.2% from existing 0.3%.
— The maximum cumulative limit for investments in shares and for premium paid to Insurance Company investments is fixed @ 15% of the taxable income, with maximum upper limit for investment upto five hundred thousand.
— Tax relief is proposed to be provided to withdrawals exceeding Rs.500,000 from a Voluntary Pension Fund.
—For encouraging companies’ enlistment on stock exchange, the existing tax credit equal to 5% is proposed to be enhanced to 15%.
—NTN and CNIC of eligible taxpayers are proposed to be provided expressly along with other particulars, in the withholding tax statements filed by withholding agents.
—The requirement of mandatory filing of return of income by the commercial and Industrial consumers of electricity with annual billing above one million rupees is proposed.
—In order to discourage the practice of arbitrage by banks for receiving ‘dividends’ from Asset Management Companies, the rate of tax on such return is proposed to be enhanced from 10% to 20%.
—For encouraging investments made by non-residents in Government Securities,the withholding tax on profit on debt deductible @ 10% is proposed to be a final tax.
—The withholding tax on profit on debt deductible @ 10% arising from investment in Government securities by individual is also proposed to be a final tax.
—After imposition of capital gain tax on Modarba certificates and instruments of redeemable capital traded at stock exchange through Finance Act 2010, the 0.01% CVT on such instruments is proposed to be withdrawn in order to encourage their trade.
–Sales tax rate has been reduced from 17% to 16%.
–Scope of federal excise duty reduced and special excise duty eliminated to reduce the burden of multiple taxation.
–Reduction in the quantum of excise duty on cement and withdrawal of excise duty on white cement.
–Reduction in the rate of federal excise duty leviable on aerated beverages from 12% to 6%.
–Federal excise duty levied on services provided by property developers or promoters to reduce the level of taxation which will in turn reduce the quantum of taxation on housing sector already subject to levy of Capital Value Tax.
–Exemption on local supply of reclaimed lead to recognized manufacturers of lead batteries has been proposed to check misuse of the facility whereby taxes are charged by the suppliers of reclaimed lead but is not deposited into the exchequer.
–Immediate full adjustment of sales tax paid on import or local purchase of capital goods has been allowed to mitigate the cash flow of industrial sector and to ensure timely and quick adjustment of input tax paid.
— Withdrawal of exemption of sales tax on defence stores at import and local supply to bring it in line with international best practices
–Revision in the upward limit of duty slabs to enhance the burden of Federal Excise Duty on locally produced Cigarettes.
–The exemption regime is being rationalized with objective to reduce its scope only to selected sectors.
–The value addition tax levied on commercial importers is being enhanced from 2% to 3%, which is levied and collected at import stage.
–Exemption of sales tax on cement/concrete blocks and bricks has been withdrawn to extend similar treatment in line with other inputs used in the construction industry.
–The sales tax leviable on sugar at import and local supply stage has been withdrawn and federal excise duty @ 8% is being levied on aforesaid stages.
–The zero-rating regime has been rationalized to limits its application only to selected sectors.
–The Federal Excise Duty leviable on filter rods for cigarettes has been rationalized from Rs.1 per filter rod to 20% ad val.
–Regulatory duty reduced, particularly on edible items.
–5% reduction made on pharmaceutical raw materials.
— Concession announced for butyl acetate on import of its raw materials (Sabutol).
–Incentives for glass industry through concession on its two major raw materials namely “mirror backing paint” and “waste/scrap of glass”.
–Incentive for CNG compressors manufacturing industry through concession on its 15 components.
–Concession in machinery and equipment to incentivize oil exploration companies.
–Concession on raw material of audio cassettes.
–Incentive for hi-tech car audio manufacturing industry through concession on import of mechanism for car audio system.
–Tariff rationalization on bars, rods and profiles of refined copper and copper alloy.
–Corrections in descriptions of PCT codes 2923.9010 and 2930.9060.
–Creation of separate PCT codes for brass scrap and armoured cash carrying vehicle.
–Tariff correction to remove ambiguity in re-import scheme
Rs 166,448 mln subsidies provided in Federal Budget 2011-12
2010-11 2010-11 2011-12
Adjustment of Addl.surcharge against GST 4,000 7,000 10,000
Inter-Disco Tariff Differential 30,000 238,827 50,000
To Pick up Receivables from FATA 10,000 10,000 7,000
To Pick up Interest Payment for TFCs 40,000 40,000 55,700
Subsidy to KESC 3,317 47,317 24,588
Adjustment of Addl. surcharge against GST 1,000 1,000 350
KESO- to Pick up Tariff Differential 2000 46,000 24,000
KESC- Payable to PSO & PKGCL 317 317 238
Subsidy to TCP 17,130 17,130 4,000
Import of Sugar 4,000 4,000 4,000
TCP – Import/Export of Wheat 12,000 12,000 0
TCP – cotton Operation 1130 1,130 0
Subsidy to USC 4,200 4,200 2,000
USC – Ramzan Package 700 700 2,000
USC – Sale of Sugar 3,500 3,500 0
Subsidy to PASSCO 2,900 2,900 74
PASSCO – Sale of Wheat 600 600 0
PASSCO – Paddy Operation 2,000 2,000 0
PASSCO – Mung Operation 2,000 2,000 74
Subsidy to Others 15,137 28,427 13,086
Fauji Fertilizer Bin Qasim Ltd 185 185 162
Oil Refineries/OMCs 10,807 10,807 7,921
Servicing of Outstanding Foreign Loan
Liability of SOPREST/GIK Instt. Topi 200 38 0
Wheat Reserved Stock 3,000 4,000 4,000
R & D Support to Textile Sector 0 7,500 0
Manufactures of Phosphatic Pottasic Fertilizer0 800 0
Imports of Phosphatic Pottasic Fertilizer 0 200 0
TCP for Import of Urea Fertilizer 0 4,000 0
Sale of Wheat to FATA 233 233 255
Sale of Wheat in Gilgit Baltistan 707 659 744
Sale of Salt in Gilgit Baltistan 4 4 4
Total Subsidies: 126,684 395,801 166,448