On Wednesday, Pakistan’s Finance Minister Muhammad Aurangzeb presented the budget for the fiscal year 2024-25, with a total outlay of Rs18.877 trillion.
The National Assembly session began with the recitation of the Holy Quran and the national anthem, with Prime Minister Shehbaz Sharif in attendance.
The session witnessed significant commotion as opposition lawmakers from the Pakistan Tehreek-e-Insaf (PTI)-backed Sunni Ittehad Council protested, raising slogans and tearing copies of the Finance Bill 2025.
Analysts Eye IMF Bailout Deal:
Analysts expect the budget to set ambitious fiscal targets to strengthen Pakistan’s case for a new bailout deal with the International Monetary Fund (IMF).
The government’s recent economic survey revealed a GDP growth of 2.4% for the current year, falling short of the 3.5% target.
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Despite this, revenues increased by 30%, and both fiscal and current account deficits were kept under control.
Pakistan is in discussions with the IMF for a loan between $6 billion and $8 billion to prevent a default, as the economy grows at the slowest pace in the region.
Optimism Amidst Economic Stabilisation:
The government is optimistic about future growth, bolstered by recent stabilisation measures, falling inflation, and a central bank interest rate cut.
Finance Minister Aurangzeb praised Prime Minister Shehbaz Sharif and his team for their efforts over the past year, expressing confidence in achieving inclusive and sustainable growth.
Federal Budget 2024-25- Cancerous, anti people, anti employment & growth budget:
– In my capacity I reject this budget
– Tax target of 12,970 billion is at the cost of all items that majority consumes by masses
– Highest tax slab of 45% will encourage human and capital flight…— Muzzammil Aslam (@MuzzammilAslam3) June 12, 2024
He acknowledged the economic challenges faced, including depleted foreign reserves, significant currency depreciation, and high inflation.
Key Budget Announcements:
The budget includes several key targets and allocations:
- GDP Growth Target: Set at 3.6%
- Inflation Rate: Projected at 12%
- Development Budget: Rs1500 billion
- Sales Tax: 18% on smartphones, with additional taxes on various goods and services
- Salary Increases: 25% for BPS1-16, 20% for BPS17-22, and a 15% increase in pensions
- Minimum Wage: Raised from Rs32,000 to Rs37,000
- Privatisation and Reforms: Focus on controlling pension expenditure and privatisation efforts
Major Allocations in Budget 2024-25:
Significant allocations in the budget include:
- BISP: Rs597 billion
- IT Sector: Rs79 billion
- Energy Sector: Rs267 billion
- Water Resources: Rs206 billion
- Public Sector Development Programme (PSDP): Rs1,400 billion
- Defence: Rs2,122 billion
- Civil Administration: Rs839 billion
Focus on Development Projects:
The finance minister highlighted various development projects, including initiatives in Azad Kashmir and merged districts, the Quaid-e-Azam Health Tower in Islamabad, and energy projects like the 600 MW power plant in Jamshoro and the Karachi Coastal Power Project.
The government’s focus, under the 5-E framework, will be on exports, equity, empowerment, environment, and energy.
Relief Measures for Government Employees:
The budget also includes relief measures for government employees, with a 25% increase in salaries for BPS1-16, a 20% increase for BPS17-22, and a 15% increase in pensions.
Additionally, the minimum monthly wage has been increased from Rs32,000 to Rs37,000.
