KARACHI: Pakistan’s federal government is all set today, Friday, to present a “pro-growth” budget before the national assembly for fiscal year 2021-22 (FY22), with an expected total outlay of Rs 8.5 trillion.
This will be the third budget of the Pakistan Tehreek-e-Insaf (PTI) government since it came to power in 2018, and is being announced after the International Monetary Fund restored a $6 billion loan program amid ongoing negotiations between the fund and Pakistani authorities to relax austerity conditions attached with the program.
On Thursday, finance minister Shaukat Tarin presented the Pakistan Economic Survey 2020-21 at a press conference in Islamabad — a comprehensive annual performance report of the country’s economy and mainly focuses on macroeconomic indicators. He said the South Asian nation was moving from stabilization to growth and more incentives would be provided to industries.
Pakistan’s federal budget for the next fiscal year is expected to keep deficit at up to 6 percent of the Gross Domestic Product (GDP). The revenue collection target would be set at Rs5.8 trillion, which is lower than the Rs6 trillion target set by the IMF. Pakistan is also expected to achieve Rs4.7 trillion in revenue collection this year.
“IMF has been told that the government can’t afford to burden people with new taxes and hike in power tariffs,” Train told reporters on Thursday.
The federal government has increased the Public Sector Development Program (PSDP) by 36.4 percent to Rs2.102 trillion in the budget for FY22, according to the planning ministry. PSDP allocation for the federal government is being increased to Rs900 billion ($5.8 billion) from Rs660 billion while allocations for the provinces have been increased to Rs1.2 trillion from Rs867 billion.
Under PSDP, an allocation of Rs244 billion has been made for motorways, highways, interprovincial and district roads, as well as airport and railway projects, and Rs87 billion set aside for projects that come under the China Pakistan Economic Corridor.
Enhanced spending on public sector development projects is expected to spur growth and achieve the 4.8 percent target the country has set for the FY22. Pakistan forecasts that GDP growth would be 3.94 percent in the current fiscal year.