ISLAMABAD: Finance Minister Senator Ishaq Dar, presented Rs 4.8 trillion pro-growth, relief-oriented federal budget for financial year 2016-17, and announced special package for agriculture, measures to improve economic growth and overcome challenges in energy sector by maintaining fiscal discipline and reducing non-development expenditure.
The Minister while announcing the budget in the Parliament House Friday announced relief for the masses, particularly the farmers, besides promoting investment for jobs creation and people-friendly policies for the socio-economic prosperity of the country.
The main focus in his budget speech was on the development of energy, infrastructure and human resource sectors, besides prioritising the China-Pakistan Economic Corridor (CPEC) projects.
The Finance Minister also announced relief for the government employees, besides announcing relief to the elderly people in the country.
Highlighting key economic indicators, based on 9 or 1 0 months data, he said the economic growth remained at 4.71pc which was the highest in the previous eight years.
The performance could have been better, had cotton crop not witnessed a loss of 28pc due to which national economic growth was reduced by 0.5pc , he added.
The minister said per capita income, which stood at $1334 in FY 2012-13, was projected to increase to $ 1561 in FY 2015-16, showing a growth of 17pc in dollar terms while it increased by 24pc in terms of rupee.
He pointed out that the average inflation was recorded at 2.82pc from July 2015-May 2016, the lowest in a decade.
Ishaq Dar said for the current FY 2015-16, the target of Rs 3,104 billion was fixed and considering the collections till date, it would be achieved.
Likewise, tax revenues would be increased by 60pc, an historic and record increase, he added.
The minister said the fiscal deficit this year was being brought down to 4.3% of DGP.
Credit to private sector that was negative Rs 19 billion in FY 2012-13, had reached Rs 312 billion till May of the current fiscal year, he noted.
The Policy Rate of SBP, he said, was brought down to 5.75pc as in May, 2016, which was the lowest during the last four decades.
The exports were recorded at $ 18.2 during Jul-Apr FY 2012-13, showing a decline of 11pc, he added.
He said, imports were recorded at $ 32.7 billion during Jul-Apr FY 2015-16 while remittances have risen to $ 16 billion for the year 2015-16, adding, for the current year target is $ 19 billion.
Ishaq Dar said exchange rate had shown remarkable stability in the last three years which was currently at 104.70/$.
About foreign exchange reserves, he said, the level of $ 21 billion had been achieved, which was a historic record.
Ishaq Dar said the government kept average current deficit to a very low level of 1pc of GDP.
He said, Stock Exchange Index stood at 19,916 on May 11,2013, has now surged to above 36,000, adding, in the same period, market capitalization has increased from Rs 5.2 trillion to Rs 7.391 trillion and from $ 51.3 billion to $ 70.5 billion.
The merger of Lahore, Karachi and Islamabad stock exchanges, which was pending for the past 15 years, was completed this year.
Ishaq Dar said reduction of fiscal deficit, raising tax revenues, continued focus on energy, exports promotion, poverty and unemployment, income support programme (BISP), Development and Promotion of ICT Sector, were main elements of government’s budget strategy.
About medium-term macroeconomic framework, he said, “Our budget strategy is embedded in a three-year medium term macroeconomic framework, spanning the period 2016-19.”
He said increase in GDP growth, investment to GDP ratio, decrease inflation, cut in fiscal deficit, increase in tax-to- GDP ratio besides enhancing foreign exchange reserves to $ 30 billion, are the main features of the framework.
The minister said a special development programme has been devised for Temporary Displaced Persons (TDPs) and Security Enhancement.
To cater for the needs of hosting, rehabilitation and the return of TDPs and security enhancement, a special development programme of Rs 100 billion has been provided in the budget.
About China-Pakistan Economic Corridor (CPEC), he said, $46 billion investment will result in improvement of economies of the four provinces and special areas of the country.
He said keeping in view significant role Gwadar has to play for strengthening the economy, the government has taken development of this area very seriously.
In order to strengthen exports and remove bottlenecks, he announced a number of measures to increase exports.
Ishaq Dar said to further enhance the export competitiveness of textile sector, measures including setting up of technology upgradation fund, duty-free import machinery, withdrawal of customs duty on manmade fibers, plant breeders right act, have been announced.
He said agriculture is the backbone of country’s economy and keeping in view difficulties faced by this sector, special steps have been taken which include concessions of taxes and duties, reduction in prices of fertilizer, enhancement in the target of agriculture credit, reduction of cost of credit, credit guarantee scheme, concessional electricity tariff for agriculture tube wells, concession of customs duty for dairy, livestock and poultry sectors, concessions of customs duty for fish farming, relief on cool-chain machinery, exemption of sales tax on pesticides and exemption to silos.
He said for industrial development the special measures included enhancing tax credit on employment generation, tax credit for making sales to registered persons, tax credit for balancing, modernization and replacement of plant and machinery, tax credit for establishing new industry, tax credit for expansion of existing plant or new project, exemption on investment in green-field industrial undertakings, reduction in customs duty on raw materials and machinery, abolishing regulatory duty on bead wire and protection of local industry. APP