Islamabad 27 April 2018 (Daily Dawn)
The outgoing PML-N government’s newly appointed Finance Minister Miftah Ismail presented a sixth full-term budget in the National Assembly on Friday amid a raucous protest staged by opposition leaders calling for a budget covering only the remaining three months of the incumbent government’s tenure.
“This is a historic moment for the parliament that the 6th budget is being presented. A government cannot run for a day without the budget. The provincial governments cannot decide their budgets without approval of the federal budget,” Ismail explained.
“We cannot interrupt the 5.8 per cent GDP growth. However the next government will have the right to make changes to the budget,” he assured the opposition.
“Today’s budget is a reflection of Nawaz Sharif’s vision. We are missing him here today.”
“In 2013 the PML-N government came to power and set up a programme for the economy. We faced certain challenges under the leadership of Nawaz Sharif. Serving the public was our only motivation,” he added.
During Ismail’s address, members of the opposition continued their protests through uninterrupted chanting. They surrounded his dais and threw papers in the air. Opposition members ripped apart copies of the budget while PML-N members encircled Ismail’s dais to keep the protesters at a distance.
The budget speech began with the finance minister recounting the government’s new tax package, through which it has lowered tax rates considerably.
Ismail said the government is using data mining and other technologies to catch tax thieves.
“We have given people one last chance to declare their domestic assets. We will catch them and prosecute them if they do not avail our tax amnesty package,” he asserted.
“Due to high economic growth in the last five years, the size of the economy has increased unusually. It has risen from Rs22,385 billion in 2013 to Rs34,396 billion in 2018. The per capita income during this time has risen from Rs129,005 to Rs180,204,” Ismail announced.
In the aftermath of the 7th NFC, the provinces have been issued an extra Rs2,500bn in eight years, and the federal government will have a reduced share in the NFC, he said.
“Our macroeconomic policy aims to address the imbalances of the external account, while protecting economic growth,” the finance minister said.
“Over the medium-term we propose to continue reduction of fiscal deficit, maintain a cautious monetary stance, and embark upon next generation of reforms for strengthening investment climate, export promotion, and energy sector. Priority should be accorded to reducing losses in the public-sector enterprises and expanding tax base.”
Salient features of Budget 18-19
- The budget hikes current expenditures and cuts development
- Bank borrowing estimated at Rs1,015.3bn, roughly 2.6 times the borrowing last year
- Defence budget experienced a 19.5pc increase from last year
Budget strategy 18-19
- Expenditure for the government in FY18-19 has been set at Rs5.246 trillion.
- The target GDP growth rate for the upcoming fiscal year has been set at 6.2pc against FY17-18’s target of 6pc.
- The government intends to keep inflation to below 6pc.
- The intended tax to GDP ratio is 13.8pc, while net public debt is targeted to be contained at 63.2pc of the GDP. The budget deficit is also targeted to be contained at 4.9pc of GDP.
- A $15bn target for forex reserves has been set in FY18-19.
- As part of the budget strategy, social protection programmes will be continued in the upcoming fiscal year.