ISLAMABAD: Finance Minister Miftah Ismail presented the budget for the financial year 2022-23 (Budget 2022-23) in the National Assembly on Friday.
The federal budget 2022-23 has a total outlay of 9502 billion rupees has been announced, encompassing measures for what the government termed ‘sustainable economic growth, industrial and agriculture development and relief for the poor people’.
Miftah Ismail started his speech by saying that the past government left the country’s economy in doldrums and hurt investor confidence by changing finance ministers and financial policies frequently.
The finance minister was of the view that the ruling coalition took over the country’s reins despite “the fact that it will have to take difficult decisions to save the economy” which may harm their respective parties’ popularity but they chose to keep national interest above party interest.
He maintained that the budget is aimed at giving the working class and the downtrodden more relief as compared to the elite class as working class mostly chooses to buy local products rather than imported ones and give economy a boost.
He deeply criticised former PM Imran Khan by saying that he never cared for the poor for he himself said that “keeping a check on potato and tomato prices is not a PM’s job”.
Miftah Ismail said that Budget 2022-23 will focus on providing facilities to farmers growing crops that produce cooking oil, like corn and sunflower, so that the country doesn’t have to import palm oil, which is touching a record high in international market.
He said that, keeping in view the current economic situation, the government has decided to cut the operating expenditure to maximum so there will be a complete ban on buying new furniture, stationary for govt offices. There will also be a complete ban on govt-sponsored foreign trips other than necessary diplomatic visits.
MAJOR POINTS AND ANNOUCEMENTS
Remittances target 33.2 billion PKR
GDP growth target set at 5 percent
Inflation to be brought down at 11.5 percent
FBR Revenue Target at 7004 billion PKR
Non-Tax revenue target at 2000 billion
Import target at USD 70 billion
Export target at USD 35 Billion
15 percent increase in salaries of government employees
Youth to get interest-free loans upto Rs500,000 under new employment scheme
End of 8 percent withholding tax on distributors, producers
Profit rate decreased to 5 percent from 10 percent on national saving schemes
Special exemption from income cax for cinema owners and film producers
Advance tax will be increased on cars above 1600cc
Exemption of complete custom duty on pharmaceutical ingredients
MAJOR ALLOCATIONS IN BUDGET 2022-23
Rs1523 billion allocated for defence
Rs699 billion for targeted subsidy
Rs21 Billion for Benazir Nashunuma Program
Rs800 billion for PSDP
Rs364 billion for Benazir Income Support Program
Rs64 billion for Higher Education Program
Rs24 Billion allocated for Health
Rs11 Billion for Agriculture
Rs9.60 billion for Climate Change
Rs3.46 billion for Maritime Affairs
Rs25.99 billion for Atomic Energy Commission
Rs10.12 billion for food security
Rs530 billion for pension
Miftah Ismail said that as agriculture is the backbone of our country’s economy. Along with other measures, the government has allocated Rs 21 billion to increase crop yield and uplift of livestock sector. Ministry of Food Security and Planning Commission, in consultation with provinces, have devised a three year growth strategy. The objectives of this strategy are to enhance production, increase farmers’ income, counter the negative effects of climate changes, promote smart agriculture, self sufficiency, value addition and agro processing.
Incentives for Youth
Youth are an important asset of our country. A national youth commission will be established. There are various schemes for youth. An integrated system will be introduced to increase the role of educated youth in country’s development.
Under “Youth Employment Policy”, two million youngsters’ access to employment opportunities will be ensured. Young men and women will be provided interest free loan upto Rs 5,00,000. A loan scheme on low interest rate upto Rs 25,000,000 will be introduced. There will be 25% quota for women in loan schemes.
To ensure the economic empowerment of young women, high-tech and other skills training will be imparted to them on priority basis. “Youth Development Centers” will be established all over the country.
Young people will be able to access an ‘Integrated Job Portal’ and guidance through these centers. In view of climate changes and productive activities of youngster, a ‘Green Youth
Movement’ will be initiated. Funds will be provided for schemes on the basis of merit, free laptop on installments for everyone and for construction of 250 mini stadiums.
For encouraging the youth talent and entrepreneurship, ‘Innovation League’ will be established. ‘Talent Hunt and Sports Drive’ Programme shall be devised for youngsters
aged 11-25 years.
Industry and Trade
Industry is very important for every country. Products made in factory are not only exported but they meet the domestic demand too and provide livelihood for tens of thousands of people. Keeping in view its importance, Ministry of Industries and Production, with the
cooperation of Asian Development Bank, has started work on Industrial Policy.
For the last three years, payment of DLTL claims arrears has been very slow. Prime Minister has directed to pay all the refund claims to exporters immediately. At present verified claims by State Bank of Pakistan worth Rs 40.5 billion are outstanding. We are paying this amount immediately. Likewise, despite financial difficulties, sales tax refunds are also being paid immediately.
To provide uninterrupted power supply to industries, industrial feeders will be exempted from
load-shedding.
Investment
In order to promote investment in country, Miftah Ismail said that a new strategy is being chalked out under which an investor friendly environment will be provided and cumbersome procedures will be abolished.
“Our government is planning reforms in Dispute Resolution Mechanism for citizens and foreign investors. It will be ensured that the dispute resolution mechanism is economical, simple and effective,” said the minister regarding Budget 2022-23.
International best practices will be adopted for the purpose which will include the alternate dispute resolution mechanism. These reforms will be introduced in consultation with superior judiciary so that it could immediately be implemented.
He claimed that previous government did not establish even a single new special economic zone, adding that under CPEC, a lot of work on infrastructure had been completed till 2018 and now there is a need to use this infrastructure for economy. It was agreed with the Chinese Government that nine special economic zones would be established on CPEC route, investors from China and other countries will be facilitated to set up factories on these economic zones. However, previous government created many hurdles to slow this work.
By now, despite lapse of considerable time, not a single special economic zone could be made operational.
He maintained that Prime Minister Shehbaz Sharif has directed to make special economic zones at Rashkai in Khyber Pakhtunkhawa, Lahore in Punjab and Dhabe Ji in Sindh to be made operational as soon as possible by immediately providing them electricity and gas.
Promotion of Culture and Film Industry
He said that development of tourism, social diversity, for introducing culture and identity of Pakistan at international level, the development of film, culture, heritage and fine arts is inevitable.
In 2018, first ‘film and culture policy’ was approved by Cabinet during our tenure. Unfortunately, no progress was made during the last four years. In the spirit of said policy of 2018, film has been declare industry with an amount of Rupees one billion, ‘Binding Film Finance Fund’ has been established for artists as well as ‘Medical Insurance Policy’.
Five years’ tax holiday for film procedures, and on establishing new Cenima houses, production houses, film museums, and tax rebate on export of film and drama for ten years, as well as producers income is exempted from Income Tax.
‘National Film Institute’ and ‘Post Film Production Facility’, and ‘National Film Studio’ receive an allocation of Rupees one billion. Cenima houses, Film museums and Post Production Facility is declared as ‘CSR’. Relate is offered to foreign film producers to produce films and dramas at local level here.
It will conditional to shoot upto 70% in Pakistan so that various regions get introduced and their tourism and culture flourish, as well as employment and youth skill get empowered.
55. Eight percent withholding tax on distributors and producers is being withdrawn. The import of machinery, equipment and other items shall be exempt from Custom Duty for five years. Finance Bill 2018 and Custom Act, 1969 is being amended through Finance Bill
2022 to introduce zero% sale tax and entertainment duty on import of equipment for film and drama. Because of these measures, Pakistan’s film industry will be rejuvenated whereas Pakistan severed relation with international media will be restored. Encouragement of new talent will provide career opportunities to youth in film industry.
Public Sector Development Programme (PSDP)
An amount of Rs 800 billion has been allocated for Federal Public Sector Development Program. In 2017-18 we left Federal Development Budget at Rs 1,000 billion. When we assumed the responsibilities again, it has been slashed to almost a half.
Federal government should build such infrastructure with its funds that are used by the whole country. These people stopped the work on Gawadar Port because of their negligence and irresponsible attitude. Gawadar, which is deepest water sea port in the region, at present is filled with sand and mud.
Miftah Ismail charted out the plan as:
i. We will focus on completion of ongoing projects so that funds spent on these projects may not go to waste.
ii. Despite having the lowest population, comparatively the largest allocation is being spent on Balochistans’ Development so that the province can be brought at par with other parts of the country.
iii. PSDP allocation for provinces and special areas (Azad Kashmir and Gilgit Baltistan) has been increased to Rs 136 billion.
iv. Dams that serve as water reservoirs are our utmost priority. Additional funds have been allocated for earlier completion of Mohmand Dam and Diamir Bhasha Dam under the directives of Prime Minister Shehbaz Sharif.
v. Highway connecting both sea ports to China will be completed.
vi. By expediting the completion of infrastructure projects and economic zones under CPEC, attention will be focused on economic growth and exports.
Infrastructure
The minister said that like always, development of infrastructure according to national needs is the government’s first priority. A total of Rs 395 billion has been allocated for this purpose.
Powers/Electricity
1. Enhancing generation, transmission and distribution of electricity is government’s priority. An amount of Rs 73 billion has been provided for power sector out of which Rs 12 billion will be spent on earlier completion of Mohamand Dam according to Prime Minister’s announcement.
These water reservoirs will also be used for agriculture. Earlier completion of this project will benefit farmers.
Water Resources
Water resources sector is closely linked with power sector. An amount of Rs 100 billion is included in the budget for big multpurpose dams especially Diamir Bhasha, Mohamand Dam, Dasu Dam, Nai-Gaj Dam and commend area projects.
Small dams, culverts, in less developed districts are also given priority. Power and water resources projects are interlinked for which a total of Rs 183 billion have been allocated.
Transport and Communication
An amount of Rs 202 billion has been allocated for highways and sea ports.
Communication facility not only benefit industry and trade but also give market access to farmers rather tens of thousands of people get employment. It had been over distinction
in the past that we started construction of motorways, completed them and today tens of thousands of people travel on these motorways daily. We are also utilizing private sector investment along with government investment on construction highways.
Construction of highways through public private partnership will be encouraged.
Social Sector
Pakistan is a signatory of SDGs and is striving to achieve targets of SDGs. People are directly provided with civic facilities under this programme.
To make the lives of people, easy and to serve the underprivileged people, a hefty amount of Rs 70 billion has been allocated. In addition, Rs 40 billion has been allocated for various
other schemes in social sector.
Education and Programme for Youth
Our government has given priority to the completion of ongoing projects. An allocation of Rs 51 billion in the budget for higher education project has been proposed.
Health
An amount of Rs 24 billion has been allocated to provide better health services to people, control and eradicate viral diseases, provision of medical equipments, vaccination and enhancement in the capacity of health establishment.
Climate Change
We are not oblivious of importance of climate changes in a difficult time like this. An amount of Rs 10 billion has been allocated to meet this challenge which includes plantation and other projects for improving natural environment.
Science, Technology and IT
Government has allocated Rs 17 billion for imparting training in IT sector, providing youth with laptops, improving network and promoting IT export.
Defence
Defence expenditure will be Rs 1,450 billion. Running of Civil Government expenditure will be Rs 530 billion and subsidies will be Rs 1,515 billion. Grants will be Rs 1,090 billion.
ANNUAL BUDGET STATEMENT