ISLAMABAD: The cash-strapped Pakistan People’s Party-led government presented its 5th Annual budget for the Fiscal Year 2012-13 amid trade of heated words and blows between the members of opposition and government.
Federal Minister for Finance, Dr. Abdul Hafeez Shaikh delivered the speech to present the budget with a total outlay of Rs2.96 trillion with a fiscal deficit of 4.7 percent (Rs1.105 trillion) during a special National Assembly session convened for the purpose.
The Minister had to cut short his speech due to the noisy ruckus raised by the members of the opposition who also exchanged blows with members of treasury benches.
The rate of inflation is expected to remain in the range of 11-12 percent in FY 2012-13 while the GDP rate has been fixed at 4.2 percent.
Total revenue collection has been projected at Rs2.504 trillion. The target for tax revenue collection has been set at Rs2.381 trillion and non-tax revenue at Rs730 billion. The provinces will get Rs1.459 trillion from the revenue pool under NFC award.
The tax collection witnessed a 25 percent increase during 2011-12 compared to the previous year.
Defence allocation for the next fiscal year has been fixed at Rs545 billion while Rs70 billion will be spent on Benazir Income Support Programme. Debt servicing will eat away Rs926 billion.
The Minister announced an austerity measure under which the Prime Minister will move to a modest-sized residence while the existing PM house will be converted into an Institute for Advanced Studies.
The government will spend an amount of Rs183 billion with an aim to overcome the worst energy crisis being faced by the country in the presence of 325 billion circular debt while a technical training and internship programme will be initiated for the youth.
He said Rs134-billion subsidy has been allocated for WAPDA and PEPCO for the next fiscal year.
Dr. Hafeez Shaikh claimed that no new additional tax was being imposed for the next fiscal.
The number of income tax slabs are being brought down to 5 from 17 and the income tax exemption ceiling raised from Rs350,000 to Rs400,000.
Income Tax Honour Cards will be issued to the law abiding tax payers.
The Czar said that the maximum rate of custom duty will be brought down to 30 and Federal Excise Duty (FED) on 10 more items will be abolished.
There will be no more withholding tax from July 1 on withdrawal of Rs25,000 from banks. Now the withholding tax will be charged on Rs50,000 withdrawal.
Dr. Shaikh said the country received a record 13-billion dollar remittances in the current fiscal and 1.2 billion dollars were paid off to the International Monetary Fund (IMF).
He also claimed that the government cut down its expenditures by 10 percent in the outgoing financial year, adding the present regime inherited a weak government.
The charged MPs from opposition benches made the task of presenting the budget with ease a challenging one for Dr. Hafeez Shaikh who had to keep his ears plugged with earphones to focus on his speech.
The Czar’s voice was hardly audible for those present inside the NA or the viewers who witnessed the proceedings on TV screens.