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Pakistan to present deficit budget with Rs9.5tr outlay, Rs800bn PSDP today

ISLAMABAD: The incumbent coalition government is all set to present budget for the fiscal year 2022-23 in the Parliament on June 10 (Friday), with a special focus on fiscal consolidation to contain budget deficit. The budget would be presented by Federal Minister for Finance and Revenue, Miftah Ismail.

According to official sources, the budget has been formulated while considering the existing challenges being faced by economy at domestic and international fronts. Hence, mitigating people’s suffering, transforming agriculture sector, promoting Information Technology (IT), boosting industrial and bolstering businesses would be the main focus of the document.

The budget was being prepared in close coordination between all departments and ministries involved in budget related events including the presentation of the budget in the Parliament and launching of the Economic Survey, they added.

Keeping in view the robust growth of revenues during the current fiscal year (2021-22), the government is likely to set the revenue collection target at over Rs.7 trillion for the fiscal year 20222-23.

ISLAMABAD: Federal Minister for Finance and Revenue Miftah Ismail Along withAhsan Iqbal, Khurrum Dastgir, Dr. Aisha Ghous Pasha and Finance Secretary and Economic Adviser, showing copy of Economic Survey at a press conference on Thursday.

The coalition government has decided to allocate Rs800 billion for the Public Sector Development Programme (PSDP) in the next fiscal year, said sources.

A development budget worth Rs800 billion has been proposed for the next financial year, out of which Rs538 billion will be allocated for federal ministries and departments.

It has been proposed to allocate Rs 121billion to the National Highway Authority (NHA), while Rs96 billion has been proposed for water resources.

Rs50 billion has been proposed for the development of the merged tribal districts in the Khyber Pakhtunkhwa, while Rs96.36 billion has been proposed in the development budget for Azad Kashmir and Gilgit-Baltistan.

Sources further said that in the energy sector, a development budget of Rs49 billion has been proposed for Pakistan Electric Power Company (PEPCO) and Rs 33 billion for Railways.

Meanwhile, the government has decided to allocate Rs 25 billion for Atomic Energy Commission, while Rs41.87 billion will be allocated to Higher Education Commission (HEC) and Rs2.5 billion for Aviation.

Rs84 billion has been proposed for energy sector, Rs83bn for water schemes while Rs39 billion will be given to Housing Ministry and Planning.

Moreover, the Ministry of Climate Change will be given Rs9.5 billion. It has been proposed to allocate Rs10.47 billion for the Ministry of Home Affairs, Rs 12 billion for the Ministry of Health, Rs 12 billion for the Ministry of Food Security and Rs3.1 billion for Maritime Affairs.

Economic Survey

Finance Minister Miftah Ismail unveiled the Pakistan Economic Survey (PES) 2021-22 on Thursday, which revealed a growth rate of 5.97 per cent against a target of 4.8pc.

However, the country’s growth story — having rebounded from the pandemic (when the economy contracted in FY20) to posting growth of 5.74pc last year and maintaining a V-shaped recovery by posting GDP growth of 5.97pc this year — was dampened in the face of glaring macroeconomic imbalances, suggesting that this growth is unsustainable.

ISLAMABAD: Finance Minister Miftah Ismail addressing a press conference to present National Economic Survey 2021-22 on Thursday. 

The balance of payments situation of the country particularly stood out with trade deficit jumping more than 50pc over the same period last year and the current account deficit spiralling out of control as well.

The economic survey is an annual report on the performance of the economy, focusing in particular on major macroeconomic indicators. Interestingly, this time — perhaps a first — a new government (PML-N-led coalition) is presenting the economic performance of a previous government (PTI).

Growth

The finance minister, while unveiling the survey, said “achieving growth was not an issue for Pakistan, the real issue is achieving sustainable growth”.

“This year GDP growth is 5.97pc growth … but as usual the current account deficit has once again shown that we have a balance of payments issue,” Ismail said.

This overall growth came on the back of 4.40pc growth in Agriculture, 7.19pc growth in Industries, and 6.19pc growth in Services — meaning that all three major sectors surpassed their targets of 3.5pc, 6.5pc and4.7pc, respectively.

Even though the country surpassed overall growth expectations as well as sector-wise growth targets, “underlying macroeconomic imbalances and associated domestic and international risks have dampened celebrations”, according to the survey document.