Nawaz-led Govt Announces Debut Budget

Nawaz-led Govt Announces Debut Budget

The budget projections presented by the Pakistan Muslim League-Nawaz (PML-N)-led coalition government soon after its formation following May 11 elections is widely being dubbed by the experts and analysts as ‘investment and business friendly’.

This clearly indicates that the outlay of Rs3.5 trillion budget has hardly anything for the people belonging to the under-privileged and low income sections of the society.

The cash-strapped government depended on indirect tax to improve the condition of its kitty by proposing one percent increase in General Sales Tax (GST), raising it from 16 to 17 percent. The regressive budgetary measure will unleash a new wave of indiscriminate price hike for the nation comprising 185 million people. The worst hit will once again be the poor that form the majority of the population.

However, it was promised that the rate of inflation will be kept under single digit, whose targeted rate for FY 2013-14 has been fixed at 9.5 percent.

Unlike the previous government, that announced consecutive increases in salaries for the government employees in each of its budget, the Nawaz-led government decided not to follow this practice. However, it did increase the pension of retired government employees by 10 percent and also raised the minimum pension from Rs3000 to 5000.

What will be welcomed by the people are a few austerity measures that have been proposed in the budget. In this regard, the government seemed to have followed the policy of ‘charity begins at home’. Ishaq Dar proposed to bring down the expenditures of Prime Minister House by 45 percent, which is claimed to result in a national saving of Rs40 billion. There will be a complete ban on purchase of new cars for Prime Minister’s office.

The budget for next fiscal earmarks an amount of Rs75 billion under Income Support Program.

The tax exemption for luxury cars is proposed to be abolished while 1200 cc hybrid cars are being exempted form import duty. A concession of 25 percent has been proposed for 1800-2500 cc cars and 1200-1800 cc cars 50% duty reduction.

The government has allocated Rs185 billion as power subsidy and Rs225 billion for the development of energy sector.

It is to be seen if the Finance Minister’s claim to eliminate the circular debt amounting to more than Rs500 billion in 60 days gets fulfilled.

The budget also proposed to initiate a Prime Minister Laptop scheme while the auction for 3G technology will be held soon.

Ishaq Dar also expressed the government’s commitment to reduce the government borrowing from the central bank.

Do you think the promises made and budgetary measures announced by the newly formed government carry what it takes to steer the country out of the quagmire of current energy crisis and unprecedented inflation? Will the proposed steps put the country’s battered economy on the track of sustained growth?

Mazhar Bughio can be followed on Twitter @mazharbughio

Mazhar Bughio

Web journalist/ writer associated with Geo News/ The News International.

  • Farooq Hashmi

    Cheer up all of you who had voted for PML(N). Spill into the streets! It’s the day of celebration. Supporters of PML(N), shed tears no more over your destitution. With its first budget, your PML(N) government has ushered in an era of prosperity in the country.

    • Anonymous

      Hashmi Sb

      As your buddy Mr Trotsky puts it, “Life is not an easy matter… You cannot live through it without falling into frustration and cynicism unless you have before you a great idea which raises you above personal misery, above weakness, above all kinds of perfidy and baseness.”

      Were the people expecting rivers of milk and honey so soon considering the ponds of blood and tears have not even dried up yet – infact they still carry on accumulating a bit more!

    • Anonymous

      Hashmi Sb

      May I impose upon you to suggest an alternative and enforcible budget given the practical and financial constrains and the knowledge the public debt sweltered during tge past five years.

      • Farooq Hashmi

        Mr.Qalim, Of late, the Moderator is frustrating me. He/she is not letting through 90% of my replies and comments.

  • M.Saeed

    Hathailee pay sarsouN nahi ugtee!

    It all depends upon the real intents. When PML(N) came into power for the first time, Prime Minister Nawaz as his first priority had imposed strict censure on wasteful expenditures in marriages. He said marriage in Pakistan was the costliest extravaganza in the whole of the world and donor countries had shamed him on that account.

    Today, we have much more wastage of resources and funds in marriages and if effectively controlled, we can solve many of our financial problems. I am surprised how it remained out of context in the current budget proposals.

    Perhaps, Government could introduce some marriage bonds with high profits under long maturity periods and Government guarantees, as alternate to the crushing burden on parents of the aspiring couples, in the name of “Nose-saving” slavery of useless rituals in marriages.

    • Farooq Hashmi

      Mr.Saeed, thank you for the humorous expression______ ” Nose-saving” slavery______ in the last lines of your post.

    • Anonymous

      Saeed Sb

      “Nose- saving” indeed but at the expense of a horrendously disfigured face! Incidentally, people did find innovative ways to get round those laws last time round.

      Statecraft and legislation – a difficult thing but Perhaps better to tax them (consumption tax) to get funds into government coffers instead of having laws almost immpossible to enforce. People moan about 1% rise in GST but a large part of government revenues come from indirect taxes on consumption. For marriage ceremonies, one can have a higher rate GST. Considering how much is spent on these ceremonies, the government should have all the circular debt cleared in no time!


    A 10% increase for defense — 0 % increase for education?

    • Anonymous

      NASAH Sb

      Can the fight against the TTP mitigate 10% increase for defence?! You can’t exactly fight those guys with a pen!

      As mind boggling as ut may sound, Education is a provincial matter and their budgets will reflect any increase or lack of it.

      The federal budget fir Higher Education has seen a substantial rise after last year’s decrease. A good thing despite the feeling amongst many that Pakistan Higher Education budget funds the market for very well trained professionals in the US and Europe.

      • NASAH (USA)

        Can the ‘TALK’ with the TTP mitigate 10% increase for defense?

        • Anonymous

          Perhaps it is the ‘TALK’ with the TTP that resulted in the 10% compromise – else it could have been higher!


    “the circular debt amounting to more than Rs500 billion in 60 days gets fulfilled.”

    In 50 days — would have been a little easy to calculate and straighter to be paid.

    “Kharch zeyadah aamdani kum” — “Qarz ki peetay haiN mai”

    • Anonymous

      “Qarz ki peetay haiN mai” or is it more approprite in Pakistani terms to say : Qarz ki peeta huN meiN. What good is spending own capital?!

    • NASAH (USA)

      Qalim sb — will the PML(N) gov be able to pay he debt in 60 days? — to me it sounds like an imitation of the Imranian over promise.

  • Anonymous

    Watching news reports, it appears all in the country have this delusion of self entitlement NOW, be it for electricity or cng or….These were the things not part of the basic life only a generation ago and people still survived in sweltering heat then and managed to get from A to B. The governments did not have huge public debts and law & order was far better. The intent here is not to question progress but rampant consumerism and expectation across all classes but without making much effort or sacrifice towards achieving the goal. What good is increase in salaries if inflation turns it into a negative?

    All want the perceived necessities but do not want to pay for them – ‘tax the rich’, they say. By all means do so but secure the base first so the investors don’t pack up and leave for Dubai or beyond or set up their operations in Bangladesh or elsewhere. No good thrashing your own infrastructure as its not going to do much for you.

    We have TV anchors pronouncing fatwas against ‘interest’ charge in Electricity charges for mosques. Question with respect is, should the House of Allah be reliant of electricity in these austere times. Another to ask of these expert anchors is, do they ubderstand what interest is in modern economy? Perhaps the CII can dwell upon this in their next meeting in addition to the DNA in rape cases. I mean considering inflation, the person recieving any payment is worse off by the time payment hits his pocket – the payer in effect receiving interest instead of paying it!

  • Farooq Hashmi

    Thank you for your diagnosis.

  • Anonymous

    You need to chill out – don’t be so judgemental asamieh.

  • Anonymous

    CM cum Finance minister in Sindh declares that the primary responsibility of the government is to provide jobs. With logic like that, I guess it will be a while before finiancial stability visits Pakistan.

    Having enjoyed the chair for the last 5 years, still eluding the CM that government’s primary responsibility is not employment provision (specially when it cannot raise sufficient revenues) but to maintain law and order. If they can do that, employment opportunities will be created when environment is stable. 150,000 government jobs add to inefficient government and tax payers’ burden. Yet more people to hold government hostage – seeking huge pay rises without realising how that fuels inflation.

    Still trying to decipher the education sector/education budget and amounts. Pity all provinces so far have not bothered bringing agricultural income into the tax net.