Pakistan Federal Budget 2009-10

Sr.# Federal Budget 2009-10 Title Download
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Federal Budget Details of Demands for
Grants and Appropriations 2009-10 Current Expenditure (Volume I)
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Federal Budget Details of Demands for
Grants and Appropriations 2009-10 Development Expenditure (Volume II)
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Budget in Brief 2009-10
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Explanatory Memorandum on Federal Receipts 2009-10
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Budget Speech 2009-10 English Version
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While stabilization of the economy was necessary it was achieved at a cost. A tight monetary policy coupled with strict public expenditure management adversely impacted access to capital in the private sector and a reduction in the public sector development programme. The biggest casualty of stabilization was economic growth which declined to around 2%. The contraction in the economy adversely affected growth in manufacturing. However, our pricing policy for Agriculture sector helped this sector in recording a growth of 4.7% in 08-09 as compared to 1.1% in the previous year. The government was fully conscious that stabilization and a contracting economy would impact the poor adversely. That is why it triggered the 2nd pillar of its nine point agenda that is, social protection. Through the Benazir Income Support Program (BISP) we targeted the poorest of the poor through an income grant of Rs. 1000 per month, allocating Rs. 34 billion for the programme. In the next financial year we propose to allocate Rs. 70 billion for BISP to bring over 5 million households in the ambit of the programme.

Having attained a certain level of stabilization it is now time to move towards growth by targeting the real sector of the economy that is Agriculture and Industry. Beginning with this year’s budget we propose to announce policies and undertake budgetary and legislative measures which would put our real sectors of the economy onto the path of greater productivity. This paradigm shift would help the country in attaining sustainable growth which would help in the reduction of poverty. Madam Speaker, we propose to pursue growth with equity. Madam Speaker, we propose to pursue stabilization with a human face. This government believes that the focus of government’s policy and investment program has to be the well being of the people, especially the poor segments of our society.

The government is managing the affairs of our country within a strategic policy framework expressed in its Nine Point Agenda of economic and social recovery.

I take this opportunity to highlight these nine pillars:
  1. Macroeconomic Stability and Real Sector Growth.
  2. Protecting the Poor and the Vulnerable.
  3. Increasing Productivity and Value Addition in Agriculture.
  4. Making Industry Internationally Competitive.
  5. Capital and Finance for Development.
  6. Removing Infrastructure Bottlenecks through Public Private Partnerships.
  7. Integrated Energy Development Programme.
  8. Human Capital Development for the 21st Century.
  9. Governance for a Just and Fair System.

This will be contributed by sectoral growth rates of agriculture amounting to 3.8 percent; manufacturing totaling to 1.8 percent; and services contributing 3.9 percent.

Increasing Productivity and Value Addition in Agriculture

The Government’s agriculture policy is aimed at ensuring food security; generating jobs; and enhancing farm profitability and competitiveness through realizing the existing productivity potential of various crops. The vast and rapidly changing agriculture sector offers enormous opportunities to millions of rural poor to move out of poverty.

‘Increasing productivity and value addition in agriculture’ will receive high priority. Self-reliance in commodities, food security through improved productivity of crops as well as development of livestock and dairy would be the main pillars of policy. More importantly government would continue to ensure a minimum guaranteed price to the farmers based on international comparisons. The response given by the farmers to the price policy of the government for the wheat crop raises hopes for improved production of other crops. Government would continue with this pricing policy. Other areas of support for agriculture and livestock would be through:

  • Focusing on research and development by upgrading existing R&D facilities and initiating the establishment of two world class institutes of research for wheat and cotton;
  • Development of new technologies;
  • More productive use of water through precision land leveling and high efficiency irrigation systems;
  • Promoting production and export of high value crops;
  • Accelerating the move towards high-value activities, such as livestock rearing, dairy production, fisheries, and horticulture;
  • Creating necessary infrastructure; and
  • Ensuring availability of agricultural credit.
  • Formation of common facilitation centres.
  • ƒ Encouraging research and extension.

In addition:
  • Establishment of ten model agricultural union councils for each major crop across the country will be undertaken;
  • Promotion of model organic farming would be supported.

Overall PSDP allocation for Agriculture will be increased by 25 percent from Rs 14.4 billion in Fiscal Year 2008/09 to Rs 18 billion during Fiscal Year 2009/10. An amount of Rs 2.5 billion is proposed for Fiscal Year 2009/10 to ensure food security and productivity enhancement of farmers.

Interventions made in this light have already started providing dividend in the shape of record production of major food crops like wheat and rice. The policy measures undertaken by the government have led to an estimated transfer of resources of about Rs 294 billion in to the rural economy. Government has made an agreement with Ms Monsanto of United States of America to formally introduce Generally Modified cotton into Pakistan on fast track basis. It has been planned that the farmers will be offered BT cotton hybrids varieties during Fiscal Year 2009/10. It is the vision of the government to treat livestock, agriculture and fisheries as an industry. In this context, the nil customs duty regime on tractors, poultry inputs and cattle feed would be continued in future.

Water Use Efficiency

To boost production of crops and improve water use efficiency, a major initiative of ‘National on Farm Water Management Programme’ was implemented by the Ministry of Food and Agriculture.

Water sector has been allocated Rs 60 billion, which comes to 14 percent of the total federal progamme. A total of 32 small and medium dams, 8 in each province are being financed. Similarly, adequate allocation has been made to projects such as National Programme of Watercourses, irrigation system, rehabilitation, lining of canals, and distribution, etc. Improved water management efforts under the PSDP for Fiscal Year 2009/10 to raise agricultural productivity will involve allocations of:

  • Rs 12 billion for Raising of Mangla Dam including resettlement;
  • Rs 10 billion for the improvement of water courses; and
  • several projects in all the provinces with allocations of Rs 15 billion for canal improvement and rehabilitation of irrigation system

For Fiscal Year 2009/10 the strategy adopted is to complete ongoing mega projects side by side with construction of small/medium dams. The Government has launched a massive programme of water resource development and is earmarking an amount of Rs 47 billion in the PSDP for Fiscal Year 2009/10. Major water sector irrigation projects being completed in the water sector include raising of Mangla Dam, Gomal Zam, Dam and Satpara Dam. Preparatory works on Basha, Akhori, Mujda, Naigaj Dam have been initiated. Kachi Canal in Balochistan and Rainee Canal in Sindh will be completed in mid 2010.

The lining of irrigation channels in saline zones is being undertaken in Punjab, Sindh and NWFP to save the seepage and other losses. A national programme of Small Dams covering all the four provinces is being implemented. A comprehensive plan is also being developed for rainwater harvesting and ground water recharge.

Development of agriculture infrastructure including warehousing facilities will involve Integrated Agriculture Marketing and Storage Infrastructure including feasibility study projects the total cost of which is Rs 37 billion, with Rs 500 million allocated for Fiscal Year 2009/10.

To assist small farmers the Government is launching the Benazir Tractor Scheme costing over Rs 4 billion over two years. 34. In order to ensure food security and to improve productivity of small farms, the Government is implementing a phased ‘Special Programme for Food Security and Productivity Enhancement of Small Farmers’ covering 13,000 villages by the year 2015 starting with 1,012 villages. This programme will be executed in all the four provinces in addition to Azad Jammu & Kashmir, FATA and FANA during the first phase at a cost of Rs 8.013 billion.

A new Agriculture Model Village Programme has been initiated in 26 villages under the auspices of Zarai Taraqiati Bank Limited. The objective is to organize the farming community at the village level ensuring farmers easy access to agri credit.

In Fiscal Year 2009/10 the Government plans to initiate new programmes like commercialization of the seed sector in order to enhance high quality supply through setting up an industry on the concept of Public Private Partnerships and diverting major investments in building and strengthening infrastructure in the sector.

Livestock and Dairy

Livestock plays an important role in our economy. The Ministry of Livestock & Dairy Development, created in November, 2008 envisages food security, greater availability of quality products at competitive prices and the promotion of deep sea fishing to enhance foreign exchange earnings to address livelihood concerns of fishermen. A number of initiatives to strengthen livestock sector include:

  • a. Prime Minister’s Special Initiative on Livestock;
  • b. livestock production and development for meat production;
  • c. Prime Minister’s Special Initiatives for White Revolution, that is, Doodh Darya and Dairy Pakistan projects are serving as a primary vehicle to bring about a white revolution through fundamental changes in the dairy sector;
  • d. National Programme for the control and prevention of Avian Influenza;
  • e. upgrading and establishing animal quarantine stations;
  • f. efforts to enter into the halal food market; and
  • g. improving reproductive efficiency of cattle under smallholders system.

Projects foreseen during the Fiscal Year 2009/10 include:
  • a. ‘Capacity Enhancement of Dairy Products under Public Private Partnership’ a project worth Rs 3,500 million, for which Rs 300 million will be allocated during Fiscal Year 2009/10;
  • b. ‘Poverty Reduction through Small Holders Live Stock and Dairy Development’ worth Rs 3,539.13 million, from which an amount of Rs 400 million will be allocated in Fiscal Year 2009/10;
  • c. More model dairy community, biogas and breeding farms, cooling tanks, rural services providers and pasteurization plants.