Government on Saturday unveiled the Federal Budget for the fiscal year of 2009-10 with a total volume of Rs. 2.89 trillion and record deficit of over Rs 722 billion near 5 Per cent of the Gross domestic Product (GDP).
For the first time in country's Parliamentary history, a woman Hina Rabbani Kher, who is State Minister for Finance and Economic Affairs, tabled the budget in the National Assembly.
Despite economic crises and Pakistan's economic loss of over $ 35 billion in war against terrorism, the minister said, Government has raised the salaries of Government employees by 15 per cent and allocated Rs. 50 billion for rehabilitation of internally displaced people and Rs 70 billion for Beanzir Income Support Programme to help deserving families.
In order to overcome economic challenges, she said, Government has introduced 9 Points agenda. "The best way to decrease poverty is to decrease inflation. Inflation is now at 14 per cent but it would be brought to single digit", she said.
Unfortunately no concentration was given on agriculture sector during regime of last Government, which directly affected the common people, but the incumbent Government is fully aware of challenges being faced by the masses, she said.
The Government is now focusing on agriculture and industrial sector, which will bring a revolutionary change in country's economy, she said. "Our government wants to improve living standard of poor segment of society. I want to discuss about the nine point agenda which the Government has made. Macroeconomic support targeting the poor and vulnerable", she said.
"The total budget deficit will be only 3.4 percent. Pakistan is among countries where taxes are extremely low. Being a nation we have not adopted a culture of giving taxes. Being responsible citizens we all have to pay taxes", she said.
"We are introducing revolutionary changes in tax collection but it will only be possible with cooperation of masses. Rather than imposing taxes on the people who are already paying we are expanding tax bases. Capital value tax will only be imposed after having it discussed in NFC and after having recommendations from all Provinces", Hina said.
Government expects GDP at 3.3 percent in the financial year 2009-10 but it will be possible with 3.8 percent growth in agriculture sector, 1.8 percent in industrial sector and 3.9 percent services, Hina said.
She said that the Government will take all necessary measures to expand tax base while collection in taxes is expected to grow from 9 percent to 9.6 percent.
The previous regime expected that through the trickle down effect, poor would benefit, however, in the end the poor become poorer and rich became further richer, she said.
In order to address poverty, she said, BISP was introduced. In financial year 2008-2009, 1.8 m families were given Rs. 22 b but in the upcoming financial year it has been increased by 200 percent. The BISP in a short span of time will become a major source of supporting the poor. Government would also adopt new policies and introduce new programmes to help poor. The government wants to ensure transparency in the BISP, she said.
The State Minister said that the Government plans to introduce social protection for Sindh Haris.
"A support quota for marriage of Girls has been abolished and now Girls of the family can obtain support form this programme. The amount has been increased to Rs. 50000 to 70000 for each Girl", she said.
"Our visionary leader four decade ago raised slogan of food, clothes and shelter. We are working on this agenda. The information minister has also announced residential programme for journalists", she said.
She further that the Government is working to provide food security and along with agriculture, attention will also be paid to livestock sector. "Research and development facilities will Provided for these two sectors. We will also expedite production of livestock, fishery and other related sectors", she said.
The State Minister for Economic Affairs further stated that attention will be given to grow organic food and 10 model dairy councils will also be established.
"Measures taken by the government have begun yielding results with the bumper production of wheat and rice", added by the minister.
Talking on irrigation, the minister said that to improve this, National Programme on farm water was implemented and funds have also been allocated for irrigation and removing slit from canals, adding Rs. 15 billion has been allocated for this purpose.
She said: "The government is also focusing on building small dams along with large dams, adding Mangla Dam raising and construction of several other dams have been initiated.
"Canals in Sindh, Punjab and NWFP are being brick lined to save water wastage and it will cost Rs. 37 billion", said by the minister and adding that to support small farmers Rs. 4 billion have been allocated in Benazir Tractor Programme for 2 years.
"The government is also introducing model village in which uniting the farmers at villages level and their access to agricultural loans is focused. To increase production of meat a programme is being initiate at cost of Rs. 300 million", added by the minister.
Hina Rabbani Khar said that the government will also work to end sanctions by EU on fishermen and will also work to improve boats used in fishery.
She underlined that to deal with this situation, financial year 09-10 has been announced as a year of industrial revival and the government has already allocated Rs. 2.5 billion for small industry.
The government has also allocated Rs. 10 billion for the poor people who want to start their business and the loan will be available on soft terms.
In this budget the government has allocated Rs. 3.1 billion for science and technology departments. No new taxes are being levied on the industry expect tobacco industry.
The government has also taken initiative to help the cellular industry and charges on SIM have been decreased from Rs .500 to Rs. 250.
She said that export centers will be set up to improve exports of the country and negotiation will done with the US for this purpose.
"The government is implanting transparent policy of private public partnership and privatization", she added.
The minister said that Rs. 12.7 billion apportioned to improve railway infrastructure while the power minister has introduced an integrated energy plan which is first of its kind in the Pakistan and the an amount of Rs. 91 billion allocated for PEPCO to pay to the IPPs.
She underlined that projects are also being initiated to improve transmission and distribution of power. There are also 15 IPPs under construction at the moment. Also 16 hydro power production projects are being initiated.
A media campaign has been launched to raise awareness regarding power saving, Hina said, added, the Government has also allocated Rs. 4 billion for Diamer Bhasha Dam.
We are introducing comprehensive renewable energy Projects While the new projects we are introducing are a mixture of hydro, coal, solar and wind sources, she added. The minister said, developing human resource is basic to improve social and economic indicators and the Government is improving planning and implementation in the education sector and it is also working to improve capacity of education and building school committees for this purpose.
Under the PSDP 66 percent budget has been increased in the health sector and now Rs. 23.5 billion is being provided in this sector, she said.
"We also suggest removing import tax on wheelchairs. Clean water is essential for better health. To provide clean water so far 600 filtration center have been setup. Pakistan has signed CEDAW and will work for gender equality. For this purpose, it has allocated Rs. 44.7 billion which was in the pervious year at Rs. 7 billion".
"The BISP is also encouraging gender equality. The gender mainstream programme is going on and we are also working on gender building. A separate ministry has been setup for human rights. Under a internship Programme, 30,000 fresh graduates will be provided an opportunity of internship at the cost of Rs. 3.6 billion", she said.
The Government also wants to promote sports so that children and youth have recreational activities. The federation has also provided Rs. 500 million to provinces into the programme of access to justice and under this programme public defenders and free legal aid will be provided, she said. "Salaries in public sector will also be brought at power with the private sector gradually. In this regard pay and pension sector had already been initiated and competent persons in public sector will be given opportunity of employer of choice", she said.
She said "15 percent increase will be given in pensions to ex-army servicemen. The national saving scheme and statistics bureau will be made into departments. In the current budget Rs. 708 billion have been allocated for provinces. While for the federation Rs. 1.3 billion have been allocated".
This is the first time after 1964 that the defense budget has been presented in the parliament and first time in Pakistan's history the leader of the opposition has made head of the Public Accounts Committee, the minister added..
Hina Rabbani said Government is introducing carbon surcharge in this budget and to discourage smoking we have increased tax on tobacco by which Government will get Rs. 15 billion.
The tax policy is based on fair and equitable and taxing those who can pay it. In order to expand tax base there is suggestion to increase capital value tax on properties from 2 percent to 4 percent and it has been suggested that person receiving more than Rs. 1 m should be taxed 30 percent, she said.
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