Finance Minister Shaukat Tarin on Friday presented the Rs8.48 trillion federal budget for fiscal year 2021-22 (FY22) in the National Assembly, revealing that the government had allocated Rs2,135 billion under the Public Sector Development Programme (PSDP) – an increase of 37 per cent from last year’s development allocations, dawn.com reports.
Leader of the Opposition in the National Assembly Shehbaz Sharif and PPP chief Bilawal Bhutto Zardari were in the house as lawmakers from their parties chanted slogans in protest during the minister’s speech. Earlier, Bilawal met Sharif at his chamber in the assembly and they decided both parties would jointly oppose the PTI’s budget.
Tarin began his speech by saying it was an honour for him to present the PTI’s third budget.
Read more: PTI govt’s ‘pro-growth’ budget for FY2022
He said there were a lot of difficulties but this government had laid the ground for the economy to revive and now “it is going towards development and prosperity”.
Key announcements during budget speech
- Rs900 billion allocated for federal PSDP
- Minimum wage has been increased to Rs20,000
- Rs12 billion allocated for agriculture sector
- Rs118 billion for power distribution
- Rs61 billion for Viability Gap Fund
- Rs14 billion for Climate Change mitigation projects
- $1.1 billion for vaccines procurement
- Rs100 billion for Covid-19 Emergency Fund
- Rs12 billion special grant for Sindh
Tarin said the total expenditure budgeted for next year stood at Rs8,487 billion — almost 19pc higher than the last year’s budget size of Rs7,136 billion.
Current expenditure budgeted for FY22 stands at Rs7,523 billion, up from last year’s Rs6,345 billion.
Of this, Rs1,370 billion will be spent on Defence Services while Rs3,060 billion will be spent on interest payments.
Expenditure on Defence Services makes up around 16pc of total expenditure budgeted for FY22, down from 18pc last year.
Fiscal deficit for FY22 has been budgeted at Rs3,420 billion, which is around 6.3pc of the GDP, down from 7pc last year.
Total allocations for the Public Sector Development Programme (PSDP) have been budgeted at Rs2,135 billion for FY22, up 37pc from Rs1,324 billion last year.
Under this, federal PSDP makes up Rs900 billion, up 27.7pc from last year’s allocation, while provincial PSDP makes up Rs1,235 billion, registering a rise of 45pc from last year’s budget.
During his speech, Tarin recalled that when the PTI came into power, the economy had gone almost bankrupt. “Everyone knows we were under the burden of so many loans,” he said, adding that the current account deficit was at a historic high of $20 billion.
“During this time, exports were contracting and there was over a 100 per cent increase in imports,” Tarin added. “Despite this context, a 5.5pc growth rate was harped on about.”
Tarin said it was the PTI government that had to do all the repayments to save Pakistan from default.
“It took time to stabilise the economy due to the pandemic but we achieved our targets. The $20bn current account deficit has been turned into a surplus of $800 million while a 3.6pc primary deficit has been reduced to 1pc,” Tarin said.
“After many efforts, the government has been successful in putting the economy on the path of development.”
GDP growth target
The finance minister announced that for FY22, the government had set the GDP growth target at 4.8pc.
“We hope growth will be even higher than that due to the measures we have taken in this budget. Like in the past, we will not leave the weak segments of our society at mercy of the trickledown effect.”
He said in the next couple of years, the government wanted to increase growth to 6-7pc.
For the upcoming fiscal year, the government targets to keep inflation at 8.2pc, which is significantly higher than the 6.5pc targeted for FY21.