ISLAMABAD: The government has unveiled Rs 4,394.70 billion budget for fiscal year 2016-17. The defense budget increased from existing Rs 776 billion to Rs 860 billion.
The government has fixed a tax collection target of Rs 3.96 trillion and wish to push the tax-to-GDP ratio to over 10 percent for the coming tax year. The government’s aim is to restrict the fiscal deficit at 4.3 percent of the GDP. The budget deficit, excluding provincial surpluses, will be brought down to 4 percent by 2017, and 3.5 percent by 2018. Minimum wage has been increased to Rs 14,000. Last year, the amount went up from Rs 12, 000 to Rs 13, 000.
Foreign exchange reserves target has been set at $30 billion. The government has decided to zero-rate the local supplies of textile, leather, carpets, surgical and sports sectors from July. The import of textile machinery will continue to be exempted from customs duty.
The agriculture sector has suffered due to floods and depressed prices. The prime minister announced a Rs 341-billion Kissan package in September 2015 to help farmers. For the coming year, fertilizer price will go down to Rs 1,400 per bag from Rs 1,850. The price of DAP fertilizer will be reduced from Rs 2,800 to Rs 2,500 from July 1. Beginning from July 1, off-peak tariff for agriculture tube-wells will go down from Rs 8.85 per unit to Rs 5.35 per unit. The government will bear a burden of Rs 27 billion due to this measure.
Similarly, Rs 115 billion have been allocated for the Benazir Income Support Program (BISP). Last year, the set amount was Rs 102 billion. The government allocated Rs 22.4 billion for the health sector and Rs 21.5 billion for the Higher Education Commission projects. Over Rs 79.5 billion has been set for higher education only. This amount is 11 percent higher than the last year and highest ever in Pakistan’s history. Pensioners older than 85 years will see a 25 percent increase in compensation. The total estimated size of the federal expenditures is over Rs 4.42 trillion, around 8 percent higher than the last year’s budget of Rs 4.1 trillion.
