By Shujauddin Qureshi
Hammad Azhar, Federal Minster for Industries on Friday afternoon presented Rs7,294.9 billion federal budget 2020 -21 in the National Assembly amid the opposition’s hooting and pandemonium. The opposition members, mostly belonging to Pakistan Peoples Party, Pakistan Muslim League (N) and Muttahida Majlis-e-Ammal (MMA) were carrying banners in their hands with slogans inscribed on them against the failure of the government to control price-hikes, corruption and inefficiency. They also raised slogans against Prime Minister Imran Khan and his government, also thumped the benches to create noise.
Prime Minister Imran Khan remained present in the National Assembly during the entire speech.
The Minister, however, continued his budget speech despite disturbances and frequent warnings by the Speaker to the opposition members to keep discipline. Near the end of the budget speech the opposition members, ultimately, boycotted the proceedings and left the hall. Later, in their statements in the media, various opposition leaders termed the budget “anti-people.” They said instead of increasing the budget for health the government has increased the budget for defence.
The defence budget has been increased to Rs 1.289 trillion for the fiscal year 2020-21, which is almost 12 per cent higher than last year’s Rs 1.227 trillion.
For social protection, the budget has been reduced to Rs 230 billion from Rs 245 billion in the current fiscal year. The government has earmarked Rs 208 billion for the Ehsaas Programme to help the poor and destitute.
The Minister in his initial part of the budget mainly focused on the economic measures taken by the government to uplift the economy. The PTI government has followed a reform agenda for the revival of the economy, he said. The government initiated Public Finance Management Reforms, Reformation of government departments and austerity measures, Ease of doing business, Curbing Money Laundering/Terror Financing and overhauling the Ehsas Programme.
He also dwelt at length on the economic failures of the previous governments. He, however, ultimately blamed the Coronavirus and lockdown for the failure to achieve most of the targets set in the last fiscal year (2019-20) Budget.
He claimed that next year’s budget is a “relief budget” as people suffer economic losses due to unemployment and the drastic reduction in income due to the lockdown imposed due to the pandemic COVID-19.
According to Hammad Azhar the PTI government, during the first nine months of the current fiscal year has achieved a drastic decline in the current account deficit from 10 billion Dollars to 3 billion Dollars, thus showing a whopping 73 per cent decrease in the corresponding period. Similarly, he said the trade deficit has also reduced from 21 billion dollars to 15 billion dollars, indicating a decline of 31 per cent.
During nine months of the fiscal year, the 2019-20 budget deficit has decreased to 3.8 per cent from 5 per cent during the corresponding period of the previous fiscal year.
Salient Features of the Budget 2020-21
- No tax on coronavirus and cancer diagnosis kits
- No import taxes on kids’ food supplements and diet food
- Advance tax on auto rickshaws, motorcycle rickshaws and up to 200 cc motorcycles have been abolished
- The sales tax rate for big retailers has been decreased from 14 to 12 per cent
- For higher education, Rs 34 billion has been earmarked
- Rs 180 billion will be spent on energy, food and other sectors
- Funds worth Rs 30 billion will be spent on the Naya Pakistan Housing Scheme, aiming to build 10 million houses in Pakistan
- Pakistan Railways will be given Rs 40 billion, particularly its M-1 project
- Rs 13 billion have been allocated for the federal government-run hospitals in Karachi and Lahore
- The size of the Public Sector Development Programme (PSDP) for 2020-21 is Rs 1,324 billion. Out of this, Rs 676 billion has been allocated to provinces
- The government has allocated Rs 20 billion for the health sector. Another amount of Rs 70 billion has been earmarked for combatting the coronavirus and other disasters
- There will be no increase in salaries and pensions of the federal government
- An amount of Rs 20 billion is kept for science and information projects
- Rs 70 billion have been kept for water projects
- The limit for purchasing in cash without showing a Computerised National Identity Card (CNIC) has been increased from Rs. 50,000 to Rs. 100,000
- The federal excise duty on cement has been reduced from Rs 2 to Rs1.75 per kg
- Rs. 40 billion rupees will be spent in Gilgit-Baltistan and Kashmir, while Rs 48 billion on merged districts of Khyber Pakhtunkhwa
- The federal excise duty (FED) on imported cigarettes, ‘bidi’, and cigars has been increased to 100 per cent, which was 65 per cent earlier. The tax on cigarette filter rod has been increased from Rs 0.75 to Rs 1
- The FED on caffeine-related products is being increased from 13 to 25 per cent to discourage their use. Excise duty has also been imposed on double cabin pick-ups
Photos Credit: Associated Press of Pakistan (APP)
