|Sr.#||Pakistan Federal Budget 2017-18 Title||Download|
|5||Federal Budget Speech 2017-2018 English Version||Download Now|
|6||Federal Budget Speech 2017-2018 Urdu Version||Download Now|
|7||Budget in Brief 2017-2018||Download Now|
|8||Annual Budget Statement 2017-18||Download Now|
|9||Estimates of Foreign Assistance 2017-18||Download Now|
|10||Explanatory Memorandum on Federal Receipts 2017-18||Download Now|
Main Elements of Budget Strategy
- FBR revenues are targeted to increase by 14% while the Federal expenditures will grow by 11%;
- Non-tax receipts of the Federal government are budgeted to increase by 7%
- By keeping the current expenditure under tight control, we will be able to create substantial space for development. Federal PSDP for the next year is budgeted at Rs.1,001 billion. This is 40% higher than revised estimates of Rs.715 billion for the current financial year. If we add the provincial ADPs the outlay for development of FY 2017-18 would be a whopping Rs.2.1 trillion;
- At the same time, current expenditure will be contained below the level of inflation;
- New initiatives are being announced for agriculture, financial sector, exports, textile, social sector and employment. This is being done with the aim to boost our economic activity even further. The purpose is to increase job prospects and incomes of the people. I will present these initiatives in a short-while;
- Tax incentives are being announced with the aim to give facilitation to the agriculture, SMEs, and IT sectors;
- Under the leadership and personal supervision of Prime Minister Nawaz Sharif through Cabinet Committee on Energy, approximately 10,000 MW of electricity will be added to the national grid by summer 2018. This will Inshallah eliminate load shedding;
- Investments will be made to speed up the process of development of Gwadar including development of airport, hospital and desalination plant;
- Around 5.5 million women-led families in the country who do not have economic means for sustenance will continued to be provided with cash transfer of Rs.19,338 per annum. For this purpose, Rs.121 billion are proposed to be allocated to Benazir Income Support Programme. This allocation has increased to 300% of Rs.40 billion in fiscal year 2012-13. During this period, the number of recipient families have increased from 3.7 million families in 2013 to around 5.5 million. In addition, around 1.3 million primary school children are receiving cash grants;
- The state will continue to subsidise bills of the low-income domestic consumers up to 300 units per month in shape of electricity subsidy. For the farmers in Balochistan, the Federal Government will pay a portion of their electricity bills to run agriculture tube wells. The Federal Government’s will continue to provide electricity subsidies on tube-wells in Balochistan. Off-peak rate of Rs.5.35 per unit for agriculture tube-wells will continue in the FY 2017-18. An amount of Rs.118 billion has been proposed in the FY 2017-18 for these measures;
- The Prime Minister’s youth schemes which include business loan scheme, interest free loan scheme, training scheme, skill development programme, fee reimbursement, and laptop programme will continue. For this purpose Rs.20 billion is proposed in the fiscal year 2017-18.
Special Initiatives 2017-18
Under the leadership of the Prime Minister we are committed to serve people of this country. This nation deserves a better and brighter future. In this regard, I will now present special initiatives:
- BISP Beneficiary Graduation Program - Grants to Self-Sustaining Individuals: Previously, the poverty incidence in the country was measured under the Food-Energy Intake methodology in which the poverty headcount that was 34.7% in 2002 reduced to 9.3% in 2014. However, Pakistan has now also adopted a new methodology based on the Cost-of-Basic-Needs (CBN) formula of World Bank. Under this methodology, the poverty headcount which was over 64% in 2002 has reduced to 29.5% in FY 2014. While the government is providing support to people with limited income, it is also encouraging the beneficiaries of Benazir Income Support Programme to learn skills and start their own enterprises so that they can graduate out of the scheme. To finalise this transition the government is announcing a new scheme. In the FY 2017-18, BISP beneficiary families who are willing to start their own businesses will be provided with training as well as a one-time cash grant of Rs.50,000 to start their own business and become productive members of society. Initially this grant is proposed to be provided to 250,000 families. The beneficiaries will therefore, be able to graduate from this programme.
- Off grid solutions in small cities: In order to facilitate provision of electricity to remote areas and small cities where there are no transmission lines, the Government, in partnership with the World Bank, will introduce solar-powered offgrid electricity system for residents of small towns and cities in sparsely populated areas of the country with special focus on Balochistan.
- Agriculture is the mainstay for the people and the economy of Pakistan. Keeping in view the primacy of agriculture in the rural economy the Prime Minister announced a Kisaan Package in 2015 with a total financial outlay of Rs.341 billion which included direct support to rice and cotton farmers, reduced taxes on agriculture machinery from 45% to 9%, reduced Sales Tax on cold chain machinery from 17% to 7%, a tax holiday for agriculture delivery chain for three years, provision of mark-up free loans to the farmers for solar tube wells, reduced sales tax on pesticides and seed, reduced mark-up for agricultural loans, subsidised crop insurance and increased volume of agricultural loans.
- In order to give further boost to agriculture sector, a number of new supportive initiatives were taken in budget 2016-17 including; crop loan insurance scheme, livestock insurance scheme, concession of customs duty on the dairy, livestock and poultry sectors, elimination of sales tax on pesticides, exemption of customs duty on cool chain machinery and silos, and reduction in fertilizer prices. As a result, the staple agriculture input of urea fertilizer reduced to Rs.1,400 per bag as compared to Rs.1,800 last year and DAP prices reduced from Rs.4,200 per bag to Rs.2,500 per bag. Reduction in prizes of fertilizer was achieved through a mix of subsidies and tax concessions. The outcomes of these measures are evident in increase in offtake of fertilizers and production of major crops. As a result of these measures a stagnant agriculture sector has grown by 3.46% in FY 2016-17. All of these schemes and initiatives shall continue in next FY 2017-18.
- The following new measures are being proposed in the next year’s budget:
- Reduced mark-up rates: Mark-up rates currently charged ranges between 14% to 15%. I am happy to announce that from 1 st July 2017, ZTBL and National Bank of Pakistan will launch a new scheme for small farmers with holdings of 12.5 acres who will be provided agricultural loans at a reduced rate of 9.9% per annum. The other features of the scheme are:
- Small loan of up to Rs.50,000 per farmer will be provided;
- Two million loans shall be provided by ZTBL, NBP and other banks;
- State Bank of Pakistan will monitor the implementation of this new scheme.
- Enhancement in the target of agriculture credit: Credit availability for the small farmers is a major constraint in the use of farm inputs. In order to facilitate the farmers, the volume of agriculture credit is being enhanced to Rs.1,001 billion from the last year’s target of Rs.700 billion which will be an increase of 43%. My Parliamentarian colleagues may kindly note that this target exactly matches Federal development budget of Rs.1,001 billion for the FY 2017-18;
- Maintaining Fertilizer Prices:
- As a further measure to support farmers, the government has already decided to sell the existing stock of imported Urea Fertilizer available with NFML at a concessional Rs.1,000 per bag;
- In order to create ease of disbursement of subsidy on DAP, it has been decided that DAP will be subject to fixed sales tax. As a result, GST is being reduced from Rs.400 to Rs.100. This will have a subsidy impact of Rs.13.8 billion;
- Through reduction in tax rates and subsidy the price of per bag of Urea shall be maintained up to Rs.1,400 per bag in the FY 2017-18. This will have a subsidy impact of Rs.11.6 billion;
- Prices of NP, NPK, SSP and CAN fertilizers will also be maintained at their current price levels through appropriate tax adjustments.
- Use of Land Revenue Records for Mortgage Financing: In order to facilitate the farmers in obtaining credit from banks, the State Bank of Pakistan shall take steps to align the banking system with the Land Record Management Information System for mortgaging of a property by the banks/farmers. Use of these automated records will help farmers in obtaining credit;
- Plants Breeders Rights Registry is being established to register new high quality seeds. This is aimed at increasing crop yields in the country;
- Cheap electricity for agri-tube wells: The government will continue provision of subsidised tariff on agri-tube wells at the rate of Rs.5.35 per unit in FY 2017-18. This is estimated to cost around Rs.27 billion in FY 2017-18;
- Production Index Units will be increased from Rs.4,000 to Rs.5,000. This will facilitate farmers to obtain maximum credit from the banks;
- Agriculture Tax Relief Measures:
- Combined harvesters: There is a growing trend of using combined harvesters. However, the combined harvesters currently being imported are 20 - 30 years old and are almost junk. As a result, the harvesting losses can be as high as 10%. In order to reduce these losses, it has been decided to encourage the import of newer agriculture machinery. Accordingly, it has been decided to reduce the customs duty and sales tax at import stage to 0% 5 years on new and up to 5 years old combined harvesters machinery.
- Removal of GST on imported sunflower and canola hybrid seeds GST on imported sunflower and canola hybrid seeds is being removed;
- Reduction of sales tax rate on imported machinery for poultry Sales tax rate from 17% to 7% on certain imported machinery/equipment for poultry is being made;
- Sales tax on import and local supply of agricultural diesel engines between 3 to 36 Horse Power for tube-wells currently having rate of 17% is proposed to be exempted.
- Reduced mark-up rates: Mark-up rates currently charged ranges between 14% to 15%. I am happy to announce that from 1 st July 2017, ZTBL and National Bank of Pakistan will launch a new scheme for small farmers with holdings of 12.5 acres who will be provided agricultural loans at a reduced rate of 9.9% per annum. The other features of the scheme are:
Export Promotion and Textile
Textile sector is the backbone of Pakistan’s economy and significantly contributes in the employment, usage of raw material, exports and economic growth. In view of its importance, the Government has provided special packages for the this sector since 2013. I would like to recapitulate some of the important measures:
- Mark-up rate on Long Term Financing Facility stands reduced from 11.4% to 5%;
- Duty free import of textile machinery is allowed;
- Uninterrupted supply of electricity and gas is ensured for the textile sector;
- Technology Up-gradation Fund (TUF) Scheme 2016-19 for the textile sector has been introduced;
- Prime Minister’s package for exporters was announced in January 2017 in which the centre-piece is the textile sector;
- The government made five export oriented sectors - including textile, leather, sports goods, surgical goods and carpets - as part of zero-rated sales tax regime last year. This will continue during the next financial year;
- Similarly duty free import of textile machinery will continue.
- All the measures announced in FY 2016-17 will be continued in FY 2017-18. Maintaining our past tradition of supporting the textile sector, following measures are proposed in the FY 2017-18:
- To stabilise cotton prices in the country, a system of cotton hedge trading for the domestic cotton will be initiated in consultation with stakeholders;
- In consultation with public and private stakeholders, the government will launch Brand Development fund for textile sector;
- The approval process of establishment of 1,000 stitching units has been completed and its implementation will start during FY 2017-18 and shall be completed in three years;
- Textile Ministry will launch the first ever online textile business/trade portal for textiles using B2B (business to business) and B2C (business to consumer) mode. This will bring Pakistan textiles’ value chain in line with global marketing practices.
- Pakistan’s exports have suffered due to slow-down in global trade and reduction in commodity prices. To increase exports, the government implemented a number of initiatives which will also continue for the next year:
- Mark-up rates of Export Refinance Facility have been reduced from 9.5% in June 2013 to 3% in July 2016. In addition, the mark-up rate on Long Term Finance Facility has been gradually reduced from 11.4% in June 2013 to 6% in 2015. These initiatives have resulted in reduction of input costs for exporters.
- In addition, new initiatives are as follows;
- The custom duty on raw-hides and skins will be reduced to zero;
- Stamping foil used in producing high value added finished leather will also be exempted from customs duty;
- Rice exporters are facing difficulties in marketing due to long distances from their potential market. In order to facilitate the export of rice, it is being decided in principle to allow warehousing of rice outside Pakistan. Ministry of Commerce, State Bank and Rice Export Association of Pakistan will develop details of this scheme.
Risk Sharing Guarantee Scheme: There is over 1 million shortage of housing units in the country. Every year an additional demand of 300,000 units is being added to this gap. Availability of long-term financing is a major hurdle. The banks are shy of offering long-term financing. In order to overcome this hurdle to housing loans, Risk Sharing Guarantee Scheme for low-income housing will be launched. Under this scheme, the Government will provide 40 percent credit guarantee cover to Banks and DFIs for home financing for up to Rs.1 million. Rs.6 billion have been allocated for this purpose. It has been decided that this facility will also be made available through micro-finance banks.
To fulfil the needs of infrastructure, the government has increased development spending on permanent basis. The government has consistently increased its development spending to match the financing needs of infrastructure sector. In addition to financing for public sector infrastructure the government is also facilitating private sector investment and finance in infrastructure through a range of policy instruments and regulations. These include a Public Private Partnership framework, new prudential regulations for infrastructure finance and development of new institutions and instruments.
- Pakistan Development Fund (PDF) has been created which will be made fully operational soon. PDF will provide long-term infrastructure financing for commercially viable public sector and PPP projects. The international development partners have expressed their interest to provide further support through PDF;
- Pakistan Infrastructure Bank (PIB): Pakistan Infrastructure Bank (PIB) will also be established to provide infrastructure financing for commercially viable private sector projects. This effort will be spearheaded by the IFC with a 20% equity of the Government through PDF, while the remaining share will be private sector. The Bank is expected to assist in introducing innovative project financing tools such as building domestic infrastructure bond market and creating contingent financing products which include credit guarantees, credit default swaps, foreign currency liquidity facility and refinancing options;
- Public Private Partnership Act: The PPP authority bill has been enacted by the Parliament recently. This Act provides a regulatory framework for promotion of financing public-private-partnership projects in the country. This will also cater to the requirement of viability gap funding of large sized public sector projects.
In recent years, our financial sector has demonstrated good performance. To further strengthen the financial sector in the country following measures are being taken:
- Financial Inclusion: In order to increase access to financial services for the vast majority of the people, the government is implementing the National Financial Inclusion Strategy. For the next year, the following initiatives are being proposed:
- A Rs.8 billion fund will be created at the State Bank of Pakistan to provide loans to low-income segments through microfinance banks;
- In order to facilitate transactions through mobile banking, egateway systems, mobile banking, the Government is establishing a state-of-the-art e-gateway systems at the State Bank of Pakistan at a cost of Rs.200 million. Technical training and handholding of the service delivery organisations shall also be undertaken through this project;
- Exemption from withholding tax on Cash Withdrawals by Branchless Banking Agents- exemptions on withholding tax will be given on withdrawal of cash from branchless banking;
- Pakistan Micro Finance Investment Company: The Government of Pakistan in 2016 launched Pakistan Microfinance Investment Company (PMIC) jointly with DFID and KFW to augment the availability of capital for Micro Finance institutions. It is estimated that this will lead to doubling of small loans;
- Disaster Risk Management Fund: This fund has been created with the main aim to provide disaster risk management and preparedness assistance to communities. An Endowment Fund of Rs.12.58 billion has been created..
Small and Medium Enterprises (SMEs)
SMEs are the backbone of any economy. Unfortunately, the growth of SMEs is stunted in Pakistan. Any growth that we witness is in the informal sector. The following new measures are being announced:
- Access to finance for SMEs: The biggest constraint of the SMEs sector is access to credit. Banks are generally reluctant to offer credit to the SME sector because of high risk attached to the sector. In order to enable banks to provide financing to SME sector, the Government is planning to introduce Risk Mitigation Facility for Small and Medium Enterprises through a Rs.3.5 billion fund to be established in the SBP. The facility will cater to both Islamic and conventional banking products;
- Innovation Challenge Fund: Investment in new technologies is imperative to give impetus to small businesses to keep pace with the changing market requirements. Technologies are involved at all levels of industry and supply chain uses continuous upgrade and improvement to maintain profitability. To cater this requirement of SMEs, the Government is announcing establishment of an Innovation Challenge Fund with Rs.500 million. This fund will be professionally managed in collaboration with the key technology universities of Pakistan;
- Secure Transaction registry for Movable Property: In order to encourage SME and agriculture lending the Government has passed Financial Institutions Secure Transactions Act 2016. The law provides for establishment of an electronic registry which will enable the small borrowers in SME and agriculture sector to obtain small loans by pledging their moveable property. Federal Government shall establish the registry during the next financial year.
From agricultural revolution to the industrial revolution, the World is now undergoing an information revolution. It is leading to the use of Information Technology in every sector of human activity be it communication, banking, trading, learning, entertainment, e-commerce, government and management. Just as machines have extended man’s mechanical power and his convenience and comfort, Information Technology is extending man’s mind or brain or intellectual power. In future, the gap between industrialised and non-industrial countries will become less pronounced than the one between IT enabled societies and others. The Government of Pakistan is cognizant of this challenge and has taken a number of measures in past and we will continue with similar measures. New measures for this sector are as follows:
- The Government will set up a IT software park in Islamabad with the help of Korean Government at a cost of 6 billion rupees. The financial arrangements for this have been concluded and the construction work shall start soon;
- The start-up software houses shall be exempted from Income Tax for the first 3 years;
- Exports of IT services from Islamabad and other Federal territories shall be exempted from Sales Tax;
- IT export houses/ companies shall be allowed to open Foreign Exchange Accounts in Pakistan on the condition that deposit in these accounts shall only be allowed through remittances from abroad in respect of their export earnings. They will be allowed to use these accounts for meeting business related payments outside Pakistan;
- Mobile phones are an important element in providing IT connectivity. The mobile telephony is heavily taxed. It has been decided to provide a relief to common man by reducing the withholding income tax on cell phone call from 14% to 12.5% and Federal Excise Duty from 18.5% to 17%. We hope that in the same spirit the provincial government shall also reduce the rate of sales tax on mobile telephony;
- In order to encourage use of smart / android phones - custom duty shall be reduced from Rs.1,000 to Rs.650;
- Import duty is being reduced on mobile telecom products.
Development Plan - PSDP
- Our development agenda for this year continues to be in line with the vision of the Prime Minister for achieving higher, sustainable and inclusive growth, with the aim to reduce poverty, build up human capital, improve infrastructure, balanced development, improve food security, water and energy security. The Federal Government’s development expenditure is now over three times compared to that of Rs.324 billion in 2012-13. The Federal PSDP is being increased to Rs.1,001 billion - which when compared with the revised estimates of Rs.715 billion, is 40% higher than last year. The total size of the development budget of the Federal Government and that of provinces is Rs.2,113 billion up from revised estimates of Rs.1,539 billion (Federal Rs 715 Billion and Provincial ADPs Rs 824 Billion). This means that the overall government sector has geared up to enhance its share of development spending by 37%. This will result in creation of millions of jobs. Increase in development expenditure will also lead to increase in investment by the private sector.
- As we all know, development of infrastructure and energy has generally been neglected in the past. Our government has completely reversed this trend. Today, most of the Federal development budget is allocated for roads and communication infrastructure, and energy. This is a major shift in our economic policy and this shift is the foundation of our future economic growth projections. Infrastructure has been allocated 67% of the total development outlay. Highest priority has been accorded to transport and communication sector with an allocation of Rs.411 billion including Rs.320 billion for national highways, Rs.43 billion for railways and Rs.44 billion for other projects including aviation schemes.
- The housing and population census is currently underway after 19 years but we do not anticipate any major shift in age composition. Youth under the age of 20 will continue to be the largest portion of our population. Therefore, our development plan is focused on development in human and social capital, education, health, empowerment of women, poverty alleviation, job creation and addressing inequality.
- I would like to highlight the key programmes of Federal Government’s development budget:
- Being an energy deficient country, Pakistan is unable to actualise its economic potential. By 2018 Inshallah 10,000 MW of additional electricity will become part of the national grid. In addition, financial close have taken place for 15,000 MW of electricity generation projects beyond 2018. In this regard, the government is proposing Rs.401 billion for power sector development including investment of Rs.317 billion to be undertaken by WAPDA for the next year. A new programme called ‘Energy for All’ is being introduced with an initial outlay of Rs.12.5 billion. Some of the key projects in which the government will invest are as follows:
- Rs.76.5 billion have been allocated for the two LNG based power plants in Balloki and Haveli Bahadurshah. Both projects will be completed during the year, and generate 2,400 MWs of electricity;
- Rs.54 billion have been allocated for Dasu Hydro Power project. In stage-I the project is envisaged to generate 2,160 MW of electricity;
- Rs.21 billion have been allocated for construction of Diamer Bhasha Dam - Lot 1 which will generate 4,500 MW of electricity;
- For Neelum Jehlum Hydro Power Project Rs.19.6 billion have been allocated. Through this project 969 MW of electricity will be generated. This project shall also be completed during the year;
- Rs.16.4 billion have been allocated for completing fourth extension of Tarbela Hydel Power which will generate 1,410 MW of electricity;
- Rs.16.2 billion have been allocated for installation of 1,200 MW coal fired power plant in Jamshoro;
- In addition, work on two Karachi Nuclear Power Projects with combined capability of 2,200 MW and Chashma Civil Nuclear Power plant with 600 MW capacity will be continued;
- The gap between generation and demand of electricity is only one facet of the challenge that we face. In the past, no significant investments have been made in the areas of transmission and distribution. The result is that even if we improve our generation, we will not be able to deliver electricity to the consumer. Since this year we are taking emergent measures to rectify the situation. The Matiari Lahore transmission line is being built. This is backed by a heavy investment in grid-stations and distribution lines across the country.
Pakistan is likely to become a water scarce country if investments in this sector are not made. The government is therefore, placing increased emphasis on building dams and canals / water courses. Other than the large hydro power projects that I have mentioned above, the government is allocating Rs.38 billion for the development of water sector. Key projects such as extension of right bank outfall drain (RBOD - II), RBOD - I and Kaachi Canal will be given the largest share in the water sector portfolio. Priority will be accorded to completion of Kaachi Canal. Collectively, these three projects will be allocated Rs.17.7 billion. In addition, a number of water sector projects in Balochistan, Khyber Pakhtunkhwa, Punjab and Sindh will be continued to address the water shortage in the provinces.
Pakistan’s geographical location provides a comparative advantage in connecting the regional countries. Over the past three years’ the government has focused on building deficient infrastructure with the view to translate the comparative advantage into sustainable economic growth. For the next year, we propose a massive outlay of Rs.320 billion as compared to Rs.188 billion allocated in the outgoing year. This represents the largest increase of 70% for development of roads, motorways, highways and bridges. The investment is being enhanced from Rs.51 billion in 2013. Key projects of this sector are as follows:
- Rs.48 billion have been allocated for 230 KM Lahore-Abdul-Hakeem section;
- Rs.35 billion have been allocated for 387 KM Multan-Sukkur section;
- Rs.2.5 billion have been allocated for Sukkur-Hyderabad section. This project is being undertaken with private sector partnership;
- Rapid progress is underway on Karachi Hyderabad motorway. One part of this has been inaugurated;
- Rs.38 billion have allocated for construction of Hakla to Yarik D.I Khan Motorway;
- Rs.10 billion have been allocated for construction of FaisalabadKhanewal expressway (184 KM);
- Burhan Havelian expressway is allocated Rs.3 billion;
- Rs.26 billion have been allocate for Thakot to Havelian;
- Rs.2.7 billion are allocated for restoration of Dera Ismail Khan Mughal Kot and Zhob road;
- Rs.2.5 billion have been allocation in Balochistan for Khuzdar and Panjgoor - Hoshab, Bisma, Sohrab Section and Gaward Turbat Hoashab section.
Improving Railways infrastructure and improving its services is an important policy initiative of the government. Railways provides cheap, reliable and fast mode of transport. Over the past four years, an impressive turnaround has been achieved. Each year revenues are increasing, passenger and freight services are being improved, and new locomotives and rolling stock are being added. The government is fully committed to reinvigorate our national asset. Accordingly, Rs.42.9 billion have been proposed for the next year’s budget. Allocations for the next year in the key projects include:
- Rs.15.8 billion for the procurement / manufacturing of 75 Nos new locomotives;
- Rs.4.5 billion for the procurement / manufacturing of 830 high capacity bogie freight wagons and 250 passenger coaches;
- The backbone of Pakistan’s infrastructure is the Peshawar to Karachi Railways - technically called the ML-1. A Memorandum of Understanding has been signed with China for its improvement and upgradation. This is a massive project which will introduce the next generation of railways in Pakistan;
- Rs.4.2 billion for preliminary design / drawings for upgrade / rehabilitation of ML-1 line and establishment of dryport near Havelian have been allocated in next year's budget.
- Human development occupies a central focus in Vision 2025. The government will continue to invest in this area. For this reason, allocations in the Higher Education Commission are proposed to be increased from Rs.21.5 billion in the current year to Rs.35.7 billion in the next financial year. In addition to PSDP, HEC will be allocated Rs.60.2 billion for recurrent budget. For the Ministry of National Health Services, Regulations and Coordination allocations have been increased from Rs.25 billion to Rs.49 billion. This means that investment is being doubled as compared to the outgoing year. A new programme for hospitals with the cost of Rs.80 billion is being started for which Rs.8 billion have been allocated for next year. In addition, the Phase-II of Prime Minister’s national health programme is being launched with the total cost of Rs.10 billion. Investments in vertical health programmes including EPI, Family Planning and Primary Health care and Population welfare programmes are being enhanced as compared to the last year.
- Two-thirds of all ailments are water-borne. Clean drinking water is a cine quo non for improvement in the public health. A special programme by the name of ‘Clean Drinking Water for all’ is being launched for which Rs.12.5 billion are proposed to be allocated for the next year’s budget. Furthermore, Rs.30 billion are being proposed for the Prime Minister’s SDG programme which would focus on national commitments to improvement in the social indicators.
Development of Gwadar
- Development of Gwadar is fundamental to development of China-Pakistan Economic Corridor. A comprehensive plan is being implemented for the road link networks, expansion and modernisation of the airport, and development of the area. 31 projects for development of Gwadar are provided in 2017-18 for this purpose which include projects such as implementation of Gwadar master plan, New Gwadar international airport, a 200-bed hospital, 200 MW power generation, and desalination plant.
- CPEC projects would enter into their third year of implementation during 2017-18. Funds to the tune of Rs.180 billion have been proposed for CPEC and its supporting projects during the next financial year.
For fast track development in Special Areas, Rs.62 billion have been allocated. On the direction of the Prime Minister, the development funds for Azad Jammu and Kashmir and Gilgit Baltistan have been increased from Rs.25.75 billion in FY 2016-17 to Rs.43.64 billion for the FY 2017-18 - which is a historic increase of 69%, and Rs.26.9 billion are being allocated for Federally Administered Tribal Areas (FATA).
Peace and Security
- On the directions of the Prime Minister an operation was started in September 2013 to bring back joys of Karachi. Very positive results have been obtained through this.
- Pakistan is a frontline state in the global ware against terror. We as a nation have in both men and material suffered heavy losses. In June 2014 the Government decided to launch a major offensive against the last safe heavens of the terrorists in North Waziristan and tribal areas, and the Pak Military started operation Zarb-e-Azb. Nation is proud of the fact that Pakistan’s brave armed forces defeated covered enemies who would attack in hiding. Some were killed, some were captured while some ran away. This victory is the result of hard work of our valiant soldiers. Today the entire World faces terrorism but no military has had such a comprehensive victory as Pak Army did. Our Jawans spent time away from their lovedones even in difficult times, embraced Martyrdom, got disabled but they did not lose courage and at last we succeeded. Terrorists were eliminated from Waziristan and other tribal areas. At times the terrorists cross border but face our brave offices and valiant officers.
- On behalf of the Prime Minister, to recognise the brave sacrifices of brave pillar, I announce today that a 10% increase will be given on the pay of all officers and Jawans as special allowance. This allowance will be in addition to the increase in pay that will be announced.
- Large operations like Zarb-e-Azb require vast sums. This is our national duty against terrorism for which provision of resources is the responsibility of the entire nation. For this reason, over the past three years the government has been paying Rs.90 to Rs.100 billion each year directly or indirectly. Directly for the spending on military operations and indirectly on the rehabilitation, return, reconstruction of the area. In this regard, the National Security Committee recommended that 3% of Gross Divisible Pool should be allocated for this national duty. This matter is under discussion in the CCI and NFC.
- Similarly, for Kashmir, Gilgit Baltistan and FATA discussions to allocate 3% of Gross Divisible Pool are underway with the provinces. In the last National Economic Council meeting the Prime Minister of AJK, the Chief Minister of Gilgit Baltistan and the Governor of Khyber Pakhtunkhwa as the President’s Agent for FATA had made an impassioned plea that they were also part of Pakistan. They also have a right on the divisible pool.
- I would like to clarify that the delay in decision of 3+3 of the Gross Divisible Pool for this purpose, has been the cause for delay in the finalising the NFC Award. I would request my fellow parliamentarians to lend their support vis-à-vis the provincial governments for this just and fair allocation.
Budget Estimates 2017-18
I would now like to present key budget numbers for the budget year 2017-18:
- The total revenue is estimated at Rs.5,310. This includes FBR tax estimate of Rs.4,013 billion as compared to revised estimate of Rs.3,521 billion. As compared to revised estimates of FY 2016-17 the total revenue is being increased by 12.1%. While the FBR tax revenue is estimated to increase by 14%;
- Out of the total revenues, the provincial governments share is estimated to be Rs.2,384 billion as compared to Rs.2,121 billion revised estimates for 2016-17, showing an increase of about around 12.4%. These resources will be utilized by the provincial governments in enhancing human development and security of the people.;
- After transfer to provincial governments, the net revenue of the Federal Government is estimated at Rs.2,926 billion in 2017-18 as compared to revised estimates of Rs.2,616 billion in the current financial year
- Total expenditure for FY 2017-18, is budgeted at Rs.4,753 billion compared to the revised estimates of Rs.4,256 billion for 2016-17, showing an increase of 11.7%. Out of the total expenditure highest increase is accorded to the development budget.
- The defence budget is proposed at Rs.920 billion against the revised budget of Rs.841 billion in the FY 2016-17;
- As I had said earlier, the PSDP budget is being increased from revised estimates of Rs.715 billion to Rs.1,001 showing a 40% increase;
- The result of the above revenue and expenditure estimates is that the budget deficit will be reduced to 4.1% of GDP as opposed to 4.2% of GDP of revised budget estimate in the financial year in 2016-17.
- During the last four years, the government initiated far-reaching structural and administrative reforms for moving towards a more efficient and equitable tax system. The comprehensive strategy for medium term period aims at increasing tax-to-GDP ratio to a respectable level of 15 percent.
- FBR initiated a historic exercise to eliminate discriminatory concessions and exemptions. Concessions and tax exemptions above Rs.300 Billion were withdrawn in three years. Other areas of reforms included broadening of tax base, increasing the cost of non-compliance, tariff reforms, simplification of business processes for taxpayer’s facilitation and effective enforcement through enhanced use of automation.
- Moving in the same direction, the broad principle of the proposed taxation measures for FY 2017-18 include consolidation of the gains made in the period of this government through extension of differential taxation for rewarding compliance and penalizing non-compliance, protection of domestic industry, removal of distortions, cutting down on discretion, measures for ease of doing business, providing incentives for growth and employment generation and increase in the share of direct taxes.
- I have already placed before the house, in earlier part of the speech, the tax relief and growth measures that have been proposed for the different sectors of the economy.
- Now I shall place before the House further relief and tax measures that are proposed to be introduced in the current Budget starting with income tax measures.