Rs8.4 trillion federal budget to be tabled in National Assembly today

The Pakistan Tehreek-e-Insaf (PTI) government will present a Rs8.4 trillion budget for the financial year 2021-22 in the National Assembly today (Friday) at 4pm.

According to the ministry of finance sources, the government has proposed Rs1,330 billion for defense and Rs3,105 billion for payment of interest.

Gross domestic product (GDP) growth target has been set at 4.8 per cent in the budget 2021-22.

The Federal Board of Revenue’s (FBR) tax collection target for the coming fiscal year will be set at Rs5,829 billion, while export target at $26.80 billion and import at $55.30 billion, they added.

The government will pitch the current account deficit target at $2.30 billion while foreign remittances at $31.30 billion. It plans to earmark Rs994 billion for various grants and Rs501 billion for subsidies.

The sources said inflection rate will be kept at 8 per cent for the coming financial year while industrial growth at 6.8 per cent, large-scale manufacturing at 6.2 per cent, overall investment target at 16 per cent, and national savings at 15.3 per cent.

Here are some key targets:

1. The overall outlay of the budget is expected at Rs8 trillion with an expected fiscal deficit of 5.5 percent to 6pc of GDP for FY22 compared to an estimated deficit of 6pc of GDP during FY21.
2. The revenue collection target for FBR has been set at Rs5.8tr for FY22, which will be lower than IMF’s target of Rs6tr. Still, the target seems to be ambitious, as it is likely to be 23pc higher compared to the estimated collection of Rs4.7tr in FY20-21.
3. Additional revenue measures worth Rs350 billion are also expected.
4. The non-tax collection target will be set at Rs1.42tr.
5. For FY22, the government is expected to earmark Rs900bn for federal PSDP, an increase of 38pc from the previous budget. A key element is total development outlay, which includes provincial spending. It is expected that the government will set a provincial spending target of Rs1tr, taking the total development outlay to Rs1.9tr compared to last year’s budgeted outlay of Rs1.3tr (up 44pc).
6. Government is likely to set mark-up interest and defense expenditure targets at Rs3.1tr and Rs1.4tr, up 4pc and 9pc from last year’s budget, respectively.
7. The government also intends to increase salaries and pensions by 15-20pc.
8. The fiscal deficit is expected to be around Rs2.9tr in FY22 which could be 5.6pc of the GDP.
9. For subsidies, the government is expected to set a target of Rs530bn for FY22.
10. The current account deficit for FY22 is projected to be around $2.3bn which would be less than 1pc of the GDP.
11. The cotton bales output expected for FY22 would be around 10.5m bales.
12. The government may also earmark funds for Covid-19 to procure more vaccines in the upcoming year. According to a government statement, it has spent $250m for procuring vaccines in FY21 and the upcoming budget will see an enhanced amount for this purpose.

Earlier, Finance Minister Shaukat Tarin unveiled on Thursday the Pakistan Economic Survey 2020-21.

The minister said at a press conference in Islamabad that despite the challenges the country faced due to the COVID-19 pandemic, the economy has witnessed a V – shaped recovery, adding that the current economic recovery has been achieved without compromising internal and external stability.

He expressed the determination to pursue an all-inclusive, sustained and robust economic growth through short, medium and long-term economic planning.