ISLAMABAD : The 2023–24 budget, according to Finance Minister Ishaq Dar, focused on economic development and was thus distinct from other budgets.
In answer to a question during the post-budget news conference in the nation’s capital, Dar said that the government was developing a “Plan B” in the event that the International Monetary Fund (IMF) would not release the awaiting loan.
But he refrained from providing any explanations or specifics, only adding that “Plan-B is always there”. He reaffirmed that Pakistan will not default and said that the elements of the plan could not be discussed in public.
Dar continued to have faith that Pakistan would pass the IMF’s 9th review when it came up for review, but he “didn’t think” it would pass reviews beyond that under the existing plan.
Dar said that one of the long-term goals of the government is to make up for all of the financial losses incurred the previous year. He said that Pakistan had experienced severe economic vulnerability, which it had effectively recovered, putting an end to any further slide. “Our first objective is to go back and achieve 2017 economic indicators,” he said.
Dar said that funding had been set aside in the budget for the country’s general elections, but he was not the main election commissioner to specify when the elections will take place. The finance minister emphasised the need of on-time election holding.
Dar expressed his opinions and responded to several issues. He said that Pakistan had attained economic stability and that raising the growth rate was the next stage, noting that the PTI chairman was to blame for the nation’s political and economic instability.
According to him, the forecast of 3.5% economic growth for the next fiscal year is reasonable. Although the aim was on the low side, it was noted that there was no further flexibility in the budget to decrease the fiscal deficit target.
According to the minister, the government has no intentions to seek debt reductions or to postpone payments to Paris Club creditors.
Dar predicted that the inflation rate will remain at 21% in the next fiscal year (2023–2024), despite an expected Rs14,040 billion in government spending.
He emphasised the need of making Pakistan a global economic force and said the private sector could be instrumental in attaining this. The minister said that only growth could result in creating jobs for people.
Regarding the agricultural industry, Dar cited the elimination of taxes on seeds and equipment as well as the granting of Rs6 billion to subsidise fertiliser costs and Rs10 billion under the prime minister’s plan as significant steps to improve the sector’s productivity and farmer quality of life.
The finance minister was optimistic that by putting the government’s recommended measures into action, the nation would advance towards attaining food security thanks to the rise in productivity.
He told reporters that the budget had included a $35 billion subsidy that could be obtained at utility shops for essential food items like wheat flour, ghee, and lentils.
According to Dar, the budget deficit for the 2019 year is predicted to be the biggest in history at Rs7.57 trillion, or 7.1 percent of GDP. It was Rs6.4tr, as of the most recent fiscal year. The predicted Rs650 billion provincial cash surplus would, however, help to balance some of it, bringing the overall deficit to Rs6.9 trillion, or 6.5 percent of GDP.
Furthermore, the amount allocated for interest payments, also known as debt servicing, for the next fiscal year has climbed by an astounding 85 percent from the previous year to Rs7,303 billion, or 55 percent of all current expenditures, making it the government’s single greatest expense.
According to him, additional taxes totaling Rs 200 would be introduced in the next budget, and the revenue from the fuel charge is expected to be Rs 875 billion.
The minister stated that the advance tax on cash withdrawals of Rs50,000 or more throughout a day was intended to bring non-filers into the tax system.
He said that the aim for tax collection for the next year was Rs9.2 trillion, a 23 percent increase from 2022–2023.
Dar said that the decision had nothing to do with the budget since it was a price problem rather than the prior idea to provide cheaper fuel to automobiles with an 800cc or smaller engine size. He said that the reason the administration hadn’t made the change yet was because some people were having trouble processing it.
In other words, the finance minister intended to convey that the proposal is still being considered, but he did so by mentioning certain obstacles or concerns without specifically identifying them.
According to him, the electricity industry has to be reformated since it continues to be a major sticking point in negotiations with the IMF.
The minister highlighted the government’s focus on renewable energy at the press conference and noted that if various duties were removed, solar panel costs will decrease throughout the nation.
The minister highlighted the government’s focus on renewable energy at the press conference and noted that if various duties were removed, solar panel costs will decrease throughout the nation.
A power generating, transmission, and distribution authority will be formed in the province as a result of the Sindh Assembly’s Wednesday adoption of the Sindh Regulation of Electric Power Services Bill 2023. Additionally, it will have the authority to set the price of energy.
Given that, according to the 18 Amendment, provincial governments are now permitted to control electric [and even gas] services, this represents a significant advancement. But until lately, they have been hesitant to take on the duty.
Due to the provinces’ willingness to apply the law to punish offenders, unlike in the past when they were federal subjects, the change would also assist reduce line losses and power theft.