Pakistan’s National Budget And Public Expectations (Ishraq Ahmed Hashmi)

The Economic Survey will be presented on June 11 and the Budget 2024-25 on June 12. This time, negotiations are ongoing for a new 4-year program of 6 billion dollars of IMF. The IMF wants to fulfill all its conditions through the budget i.e. finance bill, which includes additional taxes in the upcoming budget, increase in electricity and gas prices, sales tax on petroleum products, removal of subsidies, amendments in pension scheme, development projects (psdp). reduction in foreign exchange reserves, relaxation in imports, reduction in expenditure, bringing real estate, agriculture and retail sectors into the tax net, privatization of loss-making government institutions, current account deficit and current account deficit of electricity and gas sectors. To control. The decrease of 35% in the health sector and 62% in the education sector in the funds allocated for the social sector by the federal government is alarming. The external sector, especially external debt repayments, will continue to put pressure on foreign exchange reserves, which we will have to increase our remittances, exports and foreign investment to overcome.

From July to March 2024, foreign investment of 1.3 billion dollars and remittances of 21 billion dollars came into the country, while exports were 23 billion dollars, which brought the foreign exchange reserves of the State Bank to 9 billion dollars and total reserves to 14 billion dollars. .
FBR Komali is expected to achieve a target of 9415 billion rupees in the year 2023-24, on the basis of which the target of revenue collection in the next financial year 2024-25 has been proposed to be 12900 billion rupees, for which the government will spend 1500 billion rupees. New taxes will be imposed in the real estate sector in which 3% on property worth Rs 5 crore, 4% on property worth Rs 7 crore and 7% on property worth more than Rs 10 crore will be collected from the property seller. Capital gains tax was exempted on sale of these properties after a certain period but now capital gains tax will be charged irrespective of the period. The burden of the present pension scheme of the federal government has become unbearable.

The government wants to reduce its scope in the upcoming budget by banning multiple pensions and other amendments besides taxation. 15 to 20 percent increase in salaries is expected in this year's budget. Due to the strict monetary policy of the State Bank, the rate of inflation, which reached 35%, has decreased in the last two years to 11.7% in May and in view of the reduction in inflation, the State Bank has reduced its discount rate by 2%, i.e. 20%. percentage can but the business community wants to see it single digit. Development Plans (psdp) of any country help in accelerating the economic growth of that country and creating new job opportunities and the wheel of the economy moves fast but Unfortunately, the government does not have the capacity to complete development projects. In the current fiscal year 2023-24, 960 billion rupees were allocated in the budget, which was reduced to 746 billion rupees, out of which only 40 percent i.e. 379 billion rupees could be spent on development projects. This year the development budget has been proposed to be 1220 billion rupees, but considering the performance and financial resources of the government in the past years, the IMF has demanded a cut in PSDP. The government has substantially controlled the current account deficit, which has come down from a record high of 8 percent to 0.7 percent of GDP in 2024, while the fiscal deficit remained at 3 percent of GDP. Similarly, the trade deficit also decreased by 15% this year, which has decreased to 21.7 billion dollars from 25.6 billion dollars last year.

Readers! The government is taking steps for the micro economic stability of the country's economy after which we can move towards rapid economic growth. A review of the country's gdp growth shows that our gdp has been 5.8% in 2021, 4.7% in 2022, 0.21% in 2023 while targeting 2% in 2024 and 2.3% in 2025. We need faster GDP growth for economic recovery. The reason for the improvement in the economic growth of Pakistan in this financial year is our agricultural sector, whose growth was 5 percent. Banks' agriculture credit also increased by 33.6 percent. Cotton harvest was 108%, rice 35%, wheat 6.7%, corn 5.6%, livestock and fisheries 4.3%, while the performance of large-scale industries was slightly better. Pakistan's biggest problem is its local and external debt which has increased to 8100 billion rupees and its payment in federal tax revenue has increased from 51 to 81 percent which is a moment of concern. The people and the business community have expectations from the government that in the upcoming budget, electricity, gas prices, sales and income tax rates will be reduced and they will be given relief, but this is not possible in the current situation.