Islamabad: Government’s second budget for the year 2014-2015 will be elaborated today by the finance minister and Senator Ishaq Dar for approval after the meeting of the federal cabinet.
According to the officials, the federal government has disbursed about Rs3.87 trillion for the next year which also include Rs525bn for a Public Sector Development Programmed. It is expected that 10-15 percent increment in the salaries of the civil and military officers along with 15 to 20 percent in their pensions will also be considered.
The budget will put forward steps to expand the tax base by reducing tax exemptions, improving audit and incentives for documented sales and purchases. The government is seeking to curtail subsidies by about Rs 110bn to Rs225bn next year- since a rise in electricity tariff is expected to lead to an increase in revenue equivalent to about 0.4 percent of the GDP, while a similar rise in gas tariff may produce an increase equivalent to 0.3 percent of the GDP.
The finance minister said that the government would maintain reasonable portion for defense in this budget and that the national security will not be compromised at any cost.
“Actual work (towards reviving the economy) would start now,” the finance minister said ahead of budget presentation. “We will take additional steps to ensure value addition in the textile sector to make the most of GSP-plus status from the European Union,” he said, adding that a 42pc increase was witnessed in raw cotton exports in FY2013-14.
The estimated tax revenue for the next year would be Rs3.94 trillion, of which the Federal Board of Revenue’s goal is being put at Rs2.81trillion. The provincial share in the national divisible pool has been estimated at Rs1.7trn and the overall tax to GDP ratio is projected to grow from 10.5pc this year to 11.3pc next year.
The defect for the fiscal year is evaluated about Rs1.63 trillion. However, the provinces have consigned to bring a cash surplus of Rs225bn to limit the total fiscal deficit to about Rs1.41trn or 4.8pc of the GDP – down from the revised deficit of 5.7pc in FY2013-14.
The disbursement on mark-up payments for FY2014-15 has been forecasted at Rs 1.35trn,up from the previous revised estimate of Rs 1.2trn.
Pensions are estimated to consume about Rs220bn as compared to Rs186bn in FY2013-14, while the government’s wage bill would increase slightly from Rs270bn to about Rs290bn in FY2014-15.
Public debt will probably go up from Rs15.5trn to about Rs16.9trn. But because of increase in the size of the economy, the public debt-to-GDP ratio may come down to 60.2pc from 62.7pc in FY2013-14.