Minister for Finance and Revenue Senator Muhammad Aurangzeb on Wednesday unveiled the Rs18.877 trillion relief-oriented federal budget for the fiscal year 2024-25.
Presenting the federal budget 2024-25 in the National Assembly, the finance minister said that GDP growth target for the fiscal year 2024-25 is fixed at 3.6 percent, whereas the inflation rate is expected to remain 12 percent.
He said that the budget deficit to GDP during the period under review is estimated at 6.9 percent, whereas the primary surplus during the review period is projected at 1.0 percent of the GDP.
The minister said that the Revenue collection of the Federal Board of Revenue is estimated to Rs12,970 billion during up-coming fiscal year, adding that tax revenue collection during the current fiscal year grew by 38 percent and the provincial share would be Rs7,438 billion.
He said that the non-tax revenue targets of the federation are fixed at Rs3,587 billion, whereas the net income of the federal government would be Rs9,119 billion.
The total expenditures of the federal government is estimated at Rs18,877 billion out of the total amount of Rs9,775 billion would be spent on interest payments.
The government has allocated Rs1,400 billion for Public Sector Development Program in its current budget, adding that an additional amount of Rs100 billion would be allocated under Public Private Partnership, he added.
The minister said that the government would provide Rs2,122 billion for defence, and Rs839 billion would be allocated for Civil Administration.
Meanwhile, an amount of Rs1,014 billion is also allocated for pension expenses, adding that Rs1,363 billion are allocated for the subsidy of the gas, electricity and other sectors.
The Finance Minister further said that total grants amounting to Rs1,777 billion is allocated for the promotion of BISP, AJK,
Gilgit-Baltistan, merged districts of KP, HEC, railways and IT sectors. Finance Minister said that the government has declared a historic federal PSDP valued at Rs1,500 billion, which was higher than 101 percent of the last year’s revised PSDP.
He said that despite the fiscal constraints, the government has enhanced its budgetary allocations, which would help to develop the volume of infrastructure including transportation, energy, IT and water resources and improve the living standards of the people in the country.
Senator Aurangzeb said that in PSDP 2024-25 special focus is paid to the completion of ongoing projects as 83 percent of resources are allocated for the completion of ongoing schemes and 17 percent for the new development schemes.
During the financial year 2024-25, it is proposed to allocate 59 percent of resources for the development of infrastructure development and 20 percent for the social sector development.
To ensure the equitable development in AJK, GB and merged districts of the KP, the government has allocated at 10 percent and around 11 percent for other sectors development including IT, telecom, science and technology, governance and production sector.
The government has included projects related to support the productivity of exports-oriented industries to enhance their competitiveness, to expend the digital infrastructure in the country.
Aurangzeb described the budget as balanced, with resources matching expenditures at Rs18.877 trillion. Aurangzeb confirmed that income tax rates for salaried individuals remain unchanged, with the exemption limit at Rs600,000 annually. The budget presentation was marked by opposition uproar in the National Assembly.
Aurangzeb expressed gratitude to Prime Minister Shehbaz Sharif, PML-N leader Nawaz Sharif, and other coalition leaders for their guidance in preparing the budget.
“Mr Speaker, despite political and economic challenges, our progress over the past year has been impressive,” Aurangzeb said, urging the nation to revitalise the economy.
Aurangzeb acknowledged hurdles such as depleted foreign reserves, a 40% rupee depreciation, stagnant growth, and soaring inflation pushing citizens below the poverty line.
He credited the previous PDM government for securing a crucial nine-month IMF programme in June 2023, which averted economic collapse.
Aurangzeb noted improvements in economic indicators, attributing these successes to the efforts of the PM and his team.
“Inflation stood at 11.8% in May, a notable achievement considering the challenges. We’re on the right track, and inflation is likely to decrease further,” he said.
He highlighted bolstered foreign exchange reserves and growing international investor interest. He applauded the State Bank’s decision to cut interest rates to combat inflation, congratulating Shehbaz Sharif and his team.
“These achievements are not ordinary. As a result, the country has exited a difficult time,” he said.
Aurangzeb emphasised patience and collective effort for sustainable economic development, cautioning that progress cannot be accelerated overnight.
“There is a need for patience and extreme hard work, combined with homegrown corrective plans. The public must work together with institutions to achieve our economic goals,” he said.
Aurangzeb highlighted several key measures and reforms. The FBR’s tax policies and digitisation efforts have registered 3,400 retailers, with PM Shehbaz Sharif closely monitoring these initiatives.
He pointed out that Pakistan’s tax-to-GDP ratio is very low and requires reforms, with the federal government collaborating with provincial governments for fiscal stability.
The government is introducing pension reforms to save Rs45 billion and has approved right-sizing in PWE, which has been closed. A high-level committee will examine the government’s structure and provide recommendations in two and a half months.
State units like PIA and the Roosevelt Hotel will be privatised to promote the private sector, with Rs622 billion in liabilities transferred from PIA’s balance sheet to a holding company set up in March 2024. Major airports, starting with Islamabad International Airport, will be outsourced by July 2024.
Aurangzeb noted Rs5 billion allocated for an agriculture mark-up scheme, with financing to boost the sector, which constitutes 24% of GDP.
The energy sector will receive Rs253 billion, focusing on reducing losses and promoting wind and solar power. Efforts are underway to freeze debt from power reforms and involve the private sector.
A national digital commission will be introduced to advance digital solutions. The social welfare and education sectors will see Rs206 billion allocated for water resources, Rs8 billion for an IT park in Karachi, and Rs206 billion for drinking water projects.
Smart screens, tablets, blended learning, and e-libraries will be provided in schools, with six-month IT courses offered to students.
Overseas Pakistanis will be facilitated in sending remittances, with Rs90 billion allocated for this purpose, recognising their crucial role in the economy.
