Top representatives of the Pakistan Tehreek-e-Insaf (PTI) government held a post-budget press conference in Islamabad on Wednesday to explain salient features of the federal budget for fiscal year 2019-20.
“The focus of the budget is to check fiscal and external deficits, adopt austerity measures, and reduce expenditures of the government,” said Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh.
The adviser led the press conference and was accompanied by Federal Minister for Planning, Development and Reforms Khusro Bakhtiar, Federal Minister for Power Omar Ayub, Federal Board of Revenue Chairman Syed Shabbar Zaidi and Minister of State for Revenue Hammad Azhar.
Shaikh started off by highlighting the amount of debt handed over to the PTI-led government when it came to power. “We inherited a total of Rs31,000 billion in debt. The total collection of revenue is Rs4,000 billion – half of which is spent on repaying debts.”
The adviser said it would be unfair to blame the current government for the debt since the loans were taken by previous governments under better circumstances.
“We are focusing on the management of external debt. The PTI-led government has allocated Rs2,900 billion to repay past debts. We cannot default on the loans acquired by Pakistan’s previous governments.”
The finance adviser also spoke on the need to increase tax collection and said it was imperative to expand the tax net. “We cannot allow businesses and industries to continue earning here and not pay taxes. If some people are offended by increased taxation, the government is willing to take that risk. We all must realise that this is our national and civic duty.”
Shaikh also discussed the government’s austerity drive and efforts to boost exports. “We are committed to reducing expenses in all sectors. We intend to lead by example, which is why the allocation for the civilian government’s expenses has been reduced.”
“The armed forces have also voluntarily accepted a budget freeze which sends a positive message to the world that the Pakistani nation is united.”
“Reducing the fiscal deficit is a paramount challenge. We have set a daunting revenue target to address this issue. The trade deficit was near $40 billion and our imports are increasing.”
“To counter this, we are offering subsidies to the private sector on gas and electricity tariffs, and they will also be given loans to promote economic activity in the country.”
The adviser highlighted the fact that the government had enhanced allocations for protection of vulnerable segments of the society and development projects.
“We have doubled allocations for the social safety net. As compared to Rs100 billion in the current fiscal year, we are allocating Rs190 billion rupees to protect weaker segments of our society.”
“Rs260 billion have been earmarked as subsidy for electricity consumers using less than 300 units per month. This subsidy is aimed at protecting poorer electricity consumers from rising electricity prices,” said Shaikh.
On the development budget, the adviser said the annual development plan for the next fiscal year envisages allocation of Rs950 billion as opposed to the Rs550 billion allocated for the current fiscal year.
“This amount will be spent on infrastructure development and creation of job opportunities for the youth. We have also announced separate packages for Karachi and Balochistan.”
Shaikh said the new budget also aims to develop poorer districts in Balochistan and erstwhile Federally Administered Tribal Areas (Fata).
“We have allocated Rs150 billion for the development of our tribal districts and we intend to develop them at an unprecedented pace.”
