Pakistan unveiled budget for fiscal year 2009-10

Posted on June 13, 2009

ISLAMABAD: The government is set to unveil the consolidated budget today for the fiscal year 2009-10 with an outlay of over Rs2.9 trillion based on uncertain external flows, mainly pledges from Friends of Democratic Pakistan (FoDPs), for the social sector spending and from donors and other countries for relief and rehabilitation of the internally displaced persons (IDPs). Minister of State for Economic Affairs Hina Rabbani Khar would present the budget in Parliament House at 5:00 pm. The federal budget is likely to hover around Rs2.2 trillion with current expenditures of Rs1.5 trillion and development expenditures of Rs261 billion. It will be the first budget based on uncertain source of external flows. However, the government is learnt to have increased relaxation in the budget deficit from 4.6 to 4.9 per cent or over 5 to 5.5 per cent, meaning the budget deficit would stand somewhere between Rs723 billion and Rs798 billion. The outlay for the Public Sector Development Programme (PSDP) will be Rs621 billion and revenue collection target, Rs1.4 trillion. However, the government is likely to revise the revenue target down because the FBR has told the government that collecting over Rs1.4 trillion will be a gigantic task. The government has withdrawn many exemptions and is also bringing the real estate and the services sectors under the tax net, including imposition of carbon tax on POL products. Different tax measures and carbon tax would bring additional revenue of Rs160-170 billion to the government, which includes Rs80-90 billion through carbon tax. The increase in the fiscal deficit up to 4.9 per cent will have no inflationary impact as the expected $2 billion from FoDPs and $550 million from donors will mainly come in terms of grants.

Tags: budget in Parliament House, budget year 2009-10, Minister of State for Economic Affairs Hina Rabbani Khar, Pakistan budget, The federal budget