Pakistan unveils $47 billion federal budget, allocates 41% to debt servicing

Pakistan's Finance Minister Miftah Ismail is presenting the annual budget 2022-23 in the National assembly on June 10, 2022. (AFP)
Short Url
Updated 11 June 2022
Follow

Pakistan unveils $47 billion federal budget, allocates 41% to debt servicing

  • Government sets an inflation target of 11.5%, raises salaries of employees by 15%
  • Country earmarks $7.4 billion for defense, $3.9 billion for development projects 

KARACHI: Pakistan’s Finance Minister Miftah Ismail on Friday presented Rs9.52 trillion ($47 billion) federal budget for fiscal year (FY) 2022-23, allocating around 40 percent to service the South Asian country’s foreign and domestic debts. 

Grappling with a widening current account deficit, currency depreciation and record inflation, the Pakistani government targets 5 percent GDP growth in FY23 that is lower than the 5.97 percent of the outgoing year. 

The budget is aimed at fiscal consolidation to convince the International Monetary Fund (IMF) to release the much-needed bailout payments for the cash-strapped South Asian nation of 220 million. 

“The total expenditures of the federal government will be Rs9,502 billion ($47 billion) out of which the debt servicing would be Rs3,950 billion ($19.5 billion), while for the next year, the PSDP (Public Sector Development Program) would be Rs800 billion ($3.9 billion),” Ismail said, while presenting the budget in the lower house of Pakistan parliament, the National Assembly. 

“For the defense of the country, Rs1.5 trillion ($7.4 billion) and for Civil administration’s expenditures Rs550 billion ($2.7 billion) have been earmarked, and for payments of pension Rs530 billion ($2.6 billion) have been allocated.” 

During his speech, Ismail said Budget 2022-23 was a “growth budget,” based on a well-thought-out strategy to boost economic growth, control inflation and increase revenue generation. 

The finance minister said the government had set an inflation target of 11.5 percent and a tax-to-GDP ratio of 9.2 percent. The fiscal deficit target has been set for 4.9 percent of the GDP, while the export target has been set at $35 billion. 

He said the government would provide targeted subsidies to protect the marginalized segments of the country in the next fiscal year. 

“To facilitate the public, a targeted subsidy of Rs699 billion ($3.4 billion) has been allocated, while in the form of grants, Rs1242 billion ($6.2 billion) have been included in BISP (Benazir Income Support Program) and Bait-ul-Mal [semi-autonomous charity organization].” 

The Federal Board of Revenue’s (FBR) revenue collection has been estimated at Rs7 trillion ($34.6 billion) for the next fiscal year.  

“This includes Rs4.1 trillion ($20.3 billion) share of provinces. The net revenue with the federal government will be Rs4,904 billion ($24.2 billion). The non-tax revenue will be Rs2 trillion ($9.8 billion),” Ismail said. 

The country has raised the tax rate on banking companies from 39 percent to 42 percent, including 3 percent “Super Tax,” which is expected to raise Rs15-20 billion ($74.2-$98 million) in revenue, according to the budget. 

The capital gains tax on the sale of immovable property has been increased to 15 percent, if sold within one year. This rate will become zero over the period of six years. Withholding tax on filers and non-filers on the acquisition of property has been increased to 2 percent and 5 percent, respectively.  

The finance minister announced that immovable property, meant to park money and valued above Rs25 million ($0.127 million), would be subject to a deemed tax. The income for such deemed tax would be 5 percent of the fair value of such property, he added. 

“The major part of the wealth of rich people is parked in the real estate sector in Pakistan. This is a double-faceted menace. It leads to the accumulation of unproductive assets and raises the prices of housing for the poor and lower-income groups,” finance minister said. 

“We intend to correct this imbalance. Therefore, all persons who have more than one immovable property exceeding Rs25 million situated in Pakistan shall be deemed to have received rent equal to 5 percent of the fair market value of the immovable property and shall pay tax at the rate of 1 percent of the fair market value of the said property. However, one house of each individual will be excluded.” 

The government has decided to impose an advance tax of 1 percent on foreign transactions through debit/credit cards, which would be 2 percent for non-filers. 

Speaking of the relief measures, the finance minister announced a 15 percent increase in salaries of government employees, along with the merger of ad hoc allowances. 

He said the tax exemption slab for salaried class has also been increased from Rs600,000 ($2,968) to Rs1.2 million ($5,937). 

“This step will benefit the salaried class and enhance business activities and consumption. The slab for business individuals and associations of persons has been also been increased from Rs 400,000 to Rs 600,000,” Ismail said. 

“Prime Minister Shehbaz Sharif wants to provide maximum relief to the people of the country, particularly those who are unable to bear the burden of rising inflation.” 

He also announced tax exemption on the import and local supply of solar panels, saying soft loans from banks would be arranged to purchase solar panels for people with less than 200 units of power consumption. 

Financial experts, however, believe the Rs7 trillion revenue generation target, which is 17 percent higher than the target in FY22, would be hard to achieve, owing to the slow economic growth.  

“It will be a challenge to achieve this target due to economic slowdown and lower collection from oil sales. Please note that tax collection (sales tax, duties, petroleum levy) from oil is roughly around 22 percent of total tax collection,” Muhammad Sohail, the chief executive of Topline Securities, a brokerage house, told Arab News. 

“Budget FY23 is an attempt to satisfy the IMF on key matters relating to revenue collection, subsidy reductions and attainment of fiscal discipline.” 

The IMF and Pakistani officials concluded talks last month, with the fund asking for bailout program objectives, including fiscal consolidation, to be put back on track. 

It is unclear when the global lender plans to consider clearing the release of over $900 million of the latest tranche of the $6 billion, 39-month program Pakistan entered in 2019. 

One of the key steps, a removal of costly fuel subsidies, has already been implemented by the government, with fuel prices being raised by 40 percent. 

Economists say they were not expecting an “expansionary budget” under the current situation. 

“The budget under the present circumstances couldn’t be expansionary. Debt servicing and defense alone take the largest chunk. The net tax and non-tax income of the federal government is too inadequate to meet current expenses, what to speak of the development outlay,” Dr. Ikram ul Haq, a Lahore-based economist, said. 

“The twin menaces of fiscal deficit, coupled with current account and trade deficits, are hard to counter in the coming days, given the high inflation and the unsustainable debt burden.” 

Industrialists and traders say the budget is contrary to the expectation of a tougher one. 

“The budget is not a difficult one as was expected. The government of the few months has presented a good budget,” said Zubair Motiwala, chairman of Businessmen Group at the Karachi Chamber of Commerce and Industry (KCCI). 

“We are thankful for removing duty on solar panels. The decision of a dispute resolution mechanism is a welcoming step it was our persistent demand. The decision of tax adjustment on industrial raw material is also a good one.” 

The federal government has allocated Rs24 billion for health sector and Rs17 billion for imparting training in the information technology (IT) sector, providing youth with laptops, improving network and promoting IT exports. 

Irfan Iqbal Shaikh, president of the Pakistan Chamber of Commerce and Industry (FPCCI), said presenting the budget in the current situation was a “daunting task.” 

“The FPCCI had given proposals for the budget and many have been accommodated in the budget. The GDP target of 5 percent for the next fiscal year is a right move,” he said. 


Pakistan rover to join China’s Chang’E 8 mission to explore lunar surface in 2028

Updated 26 min 16 sec ago
Follow

Pakistan rover to join China’s Chang’E 8 mission to explore lunar surface in 2028

  • Chang’E 8 mission is a robotic exploration of the lunar south pole, known for its challenging terrain, by China in 2028
  • Pakistan’s rover will conduct scientific experiments such as lunar soil study and conduct tests for human presence

ISLAMABAD: Pakistan’s national space agency announced this week its rover will join China’s Chang’E 8 mission to explore the moon’s surface in 2028, describing the development as a “significant milestone” for the South Asian country. 

The Chang’E 8 mission is a robotic exploration of the lunar south pole by China, expected to launch in 2028. The Pakistan Space and Upper Atmosphere Research Commission (SUPARCO), the country’s space program, said its rover will land on the lunar south pole in 2028 as part of the Chang’ E 8 mission. The south pole of the moon is known for its challenging terrain and potential scientific discoveries. 

In May, Pakistan launched its first lunar satellite aboard China’s Chang’e-6 probe, which was tasked with landing on the far side of the moon that perpetually faces away from the Earth. China was the first country to make such an ambitious attempt.

“SUPARCO’s rover, with an approximate weight of 35 kilograms, will join China’s Chang’E 8 mission, which is part of the larger International Lunar Research Station (ILRS) project,” SUPARCO said in a statement on Wednesday. 

“This collaboration marks a significant milestone for Pakistan’s space program, as SUPARCO’s indigenous rover will be part of the mission to explore the lunar surface.”

SUPARCO said the mission would involve scientific experiments such as lunar soil study, lunar surface mapping and testing new technologies for human presence on the moon. It highlighted that the rover, equipped with state-of-the-art scientific instruments, would play a pivotal role in collecting data.

“This collaboration with China highlights the strong bilateral relations between the two countries and their shared vision for space exploration,” it concluded.


After ODI series win, Rizwan to lead Pakistan in first T20I against Australia today

Updated 3 min ago
Follow

After ODI series win, Rizwan to lead Pakistan in first T20I against Australia today

  • Pakistan to play three-match series against Australia on Nov. 14, 16 and 18 in Brisbane, Sydney and Hobart
  • Rizwan’s side defeated Australia 2-1 in three-match series last week to win first series in Australia since 2002

ISLAMABAD: Pakistan skipper Mohammad Rizwan will lead his side for the first time against Australia in a T20I format at Brisbane today, Thursday, after steering the green shirts to their first ever ODI series victory against the 2023 world champions since 2022. 

Rizwan will become the 12th person to assume Pakistan’s T20 captaincy when he takes the field in Brisbane for the first T20I. Pakistan’s cricket team, encouraged by stellar performances from fast bowlers Haris Rauf, Shaheen Shah Afridi and Naseem Shah, beat Australia 2-1 in the three-match series that concluded last week. 

After Thursday’s match, Pakistan will play against Australia in Sydney and Hobart on Nov. 16 and 18 respectively. Pakistani cricketers Jahandad Khan, Mohammad Abbas Afridi, Omair Bin Yousuf, Sahibzada Farhan, Sufiyan Moqim and Usman Khan joined the T20I squad in Brisbane on Nov. 11 after undergoing a five-day training camp in the southern port city of Karachi. 

“We are confident after beating Australia in the ODI series but international cricket is always challenging so we aim to do things as better as we can going into this T20I series against Australia,” Rizwan said a day before the match. 

“We have determined the roles of various players in the team and look forward to executing our best plans not just in this series but also in the upcoming white-ball fixtures against Zimbabwe and South Africa.”

The Pakistan captain said he wanted to keep all the players involved in the series motivated. 

“Of course, the conditions have helped the bowlers on this tour so far but we also want to prove our mettle as a batting unit and I look forward to an exciting contest in the three matches,” he said. 

Pakistan last faced Australia in a T20 contest in March 2022 when the two teams played a one-off T20I in Lahore, which Australia won. In Pakistan’s last T20I series in Australia in November 2019, the hosts won 2-0 after the opening match ended in a no result. 

Josh Inglis will lead Australia in the T20I series while Tim David and Nathan Ellis have joined Australia’s T20I squad. Josh Philippe, meanwhile, has replaced the injured Cooper Connolly.

Pakistan: Mohammad Rizwan (captain – wicket-keeper), Salman Ali Agha (vice-captain), Arafat Minhas, Babar Azam, Haris Rauf, Haseebullah, Jahandad Khan, Mohammad Abbas Afridi, Muhammad Irfan Khan, Naseem Shah, Omair Bin Yousuf, Sahibzada Farhan, Shaheen Shah Afridi, Sufyan Moqim, Usman Khan
 


PM launches prevention program as over 33 million Pakistanis found to have diabetes

Updated 4 sec ago
Follow

PM launches prevention program as over 33 million Pakistanis found to have diabetes

  • Additional 11 million adults in Pakistan have impaired glucose tolerance
  • Pakistan is on the list of countries with the largest diabetic populations

ISLAMABAD: Pakistani Prime Minister Shehbaz Sharif said on Thursday, National Diabetes Day, his government was launching a new program for the control and prevention of diabetes in a country where over 33 million people had the chronic disease. 

According to a new analysis in The Lancet journal released this week, the percentage of adults suffering from diabetes across the world has doubled over the past three decades, with the biggest rises coming in developing countries. 

The serious health condition affected around 14 percent of all adults worldwide in 2022, compared to seven percent in 1990, the Lancet study said. Taking into account the growing global population, the team of researchers estimated that more than 800 million people are now diabetic, compared to less than 200 million in 1990.

“At the Federal level, we will be launching the ‘Prime Minister’s Program for Prevention and Control of Diabetes Mellitus’ under the Ministry of National Health Services, Regulations & Coordination,” Sharif said in a statement. 

“Objective of this program is controlling the disease in federal areas and improving capacities in all provinces for providing universal health coverage, diagnosis, and treatment for diabetic patients, along with raising awareness and behavioral change.”

With 33 million of its citizens having diabetes, Pakistan is on the list of countries with the largest diabetic populations. An additional 11 million adults in Pakistan have impaired glucose tolerance, while approximately 8 to 9 million with diabetes remain undiagnosed. 

“The major risk factors leading to diabetes in Pakistan are environmental and geographical reasons in addition to genetic variants, dietary, as well as inactive lifestyle,” Sharif said. 

“The Government of Pakistan is fully committed in controlling this escalation and delivering wellbeing to diabetic population.”

Diabetes is a chronic disease that occurs either when the pancreas does not produce enough insulin or when the body cannot effectively use the insulin it produces. Insulin is a hormone that regulates blood glucose.

Type 1 diabetes affects patients from a young age and is more difficult to treat because it is caused by an insulin deficiency. Type 2 mainly affects middle-aged or older people who lose their sensitivity to insulin.


Army says suicide bomber recruiter among four militants killed in southwest Pakistan 

Updated 13 November 2024
Follow

Army says suicide bomber recruiter among four militants killed in southwest Pakistan 

  • High value target recruited suicide bombers for separatist outfit BLA in district Kech, says army 
  • Last week’s bomb blast claimed by BLA at railway station in southwestern Pakistan killed at least 24

ISLAMABAD: Security forces shot dead four militants, among them a recruiter for suicide bombers for the separatist outfit Baloch Liberation Army (BLA) in an intelligence-based operation in southwest Pakistan, the military’s media wing said on Wednesday.

The operation was conducted in Balgatar area of southwestern Balochistan province’s Kech district, the Inter-Services Public Relations (ISPR), the army’s media wing, said. 

Pakistan launched an armed operation in Balochistan earlier this month against separatist militants behind multiple attacks in August in which over 50 people, including civilians and security officials were killed. The BLA also claimed responsibility for a bomb blast last week that killed at least 24 people and left 50 injured at a railway station in Quetta.

“During the conduct of the operation, after an intense fire exchange between own troops and the terrorists, four terrorists including a high-value target, terrorist ringleader Sana (alias) Baru were killed,” the ISPR said. 

“He was a focal recruitment agent, especially suicide bombers, for the so-called Majeed Brigade in District Kech and was highly wanted by the law enforcement agencies.”

Weapons and ammunition were also recovered from the slain “terrorists,” the army’s media wing said. It added that security forces had launched a sanitization operation to eliminate any other “terrorists” found in the area.

Pakistan’s Balochistan province, which shares porous borders with Afghanistan and Iran, has been the scene of a low-lying insurgency for decades. Ethnic Baloch nationalists have long accused the central government and Punjab of monopolizing profits from Balochistan’s natural resources. 

The state denies these allegations and says it is working on several projects to usher in development in the gas-and-oil rich province. 


Father of British-Pakistani girl admits killing her but denies intent

Updated 13 November 2024
Follow

Father of British-Pakistani girl admits killing her but denies intent

  • Sara Sharif, 10, was found dead in her bed in southwest London in August last year with serious injuries
  • Her father, Urfan Sharif, had fled to Pakistan a day before her body was found with his wife and Sara’s uncle

LONDON: The father of a 10-year-old British-Pakistani girl on Wednesday admitted that he killed his daughter but maintained he had not meant to harm her, even as he beat her when she lay dying.

Sara Sharif was found dead in her bed in Woking, southwest of London, on August 10, 2023, with extensive injuries including broken bones, burns and bite marks.

Her father, Urfan Sharif, 42, had fled to Pakistan a day before her body was found, with his wife Beinash Batool, 30, and the girl’s uncle, Faisal Malik, 29.

All three adults deny murder and a separate charge of allowing the death of a child.

Giving evidence at the Old Bailey court in central London, Urfan Sharif had previously blamed Batool, Sara’s stepmother, and said she had forced him to confess to killing her.

But under questioning from his wife’s lawyer on Wednesday the taxi driver said he took “full responsibility” for what had happened, but that he had not intended to hurt Sara.

Asked if he killed Sara by beating, he replied: “Yes, she died because of me.”

He also admitted causing multiple fractures in the weeks before Sara’s death, using a cricket bat on her as she was bound with packaging tape, throttling her with his bare hands and breaking the hyoid bone in her neck.

“I can take full responsibility. I accept every single thing,” he said, also accepting that he badly beat Sara on August 8 when she had collapsed and was dying.

He maintained however that he was not guilty of the murder charge. “I did not want to hurt her. I didn’t want to harm her,” he told the jury.

Sara’s body was discovered in her bed on August 10. Her father phoned British police after arriving in Islamabad and said he had beaten his daughter “too much.”

A written confession was found beside her. A post-mortem examination found she had suffered multiple injuries, including at least 25 broken bones.

She also had burns and human bite marks on her body but Urfan Sharif denied making them.

The defendants were arrested on September 13 when they flew back to the UK.