Pakistan Budget for the year 2009-10 is on its way and no one is much concerned as there are a lot of other issues that’s require immediate attention. In any case, we think that we need to initiate a blog post that we will keep updating regarding the news related to Pakistan Budget 2009-2010.
ISLAMABAD: The federal cabinet has approved the upcoming budget proposals on Saturday. The cabinet met with Prime Minister Syed Yousuf Raza Gilani in chair to review and finalize the suggestions of upcoming budget for fiscal year 2009-10.
The government is set to unveil the consolidated budget with an outlay of over Rs2.9 trillion based on uncertain external flows.
The proposed budget has an allocation of Rs 724 billion for debt servicing, funds for which will be financed through local and external borrowing. Non-development expenditures are estimated at Rs 1.55 trillion, Rs 621 billion have been apportioned for the Public Sector Development Programme (PSDP) 2009-10 and the allocation for the defence budget is likely to be around Rs 343 billion.
Pro-Pakistan Comment: Well in line with our expectations. It is very much justified keeping in view the current situation
The budget proposal estimates foreign and domestic debt servicing at Rs 655 billion, Rs 70 billion have been earmarked for the Benazir Income Support Programme (BISP), allocation for the rehabilitation of the internally displaced persons (IDPs) is likely to Rs 50 billion, while the Earthquake Reconstruction and Rehabilitation Authority (ERRA) is likely to get Rs 25 billion for the year 2009-10.
According to the government’s estimates, expenditures in the coming year will amount to Rs 745 billion.
Another proposal considered in today’s special cabinet meeting is a proposed increase in the salaries of government officials by 20 percent, or an alternate remedy of merging two ad-hoc relief allowances in the pay scales and than allowing the 20 percent increase. According to another proposal included in the planned budget, government employees who retired before June 30, 1997, will get a 25 percent increase in their pension and those who retired on, or after July 1, 1997, will allowed an increase of 20 percent.
The tax collection target is likely to be set at between Rs 1.380 and Rs 1.390 trillion, with new taxes and duties amounting to around Rs 100 billion. The existing petroleum development levy may be replaced by a Carbon tax of around Rs 6 to 12 per litre on petroleum, oil and lubricant products, likely to be imposed from July 1, 2009.
Two new taxes are to be imposed under the provincial legislation – 16 percent general sales tax is to be levied on 14 services sectors and 10 percent capital gains tax on real estate sector is also expected.
Pro-Pakistan Comment:This will surely result in huge divestment from the Real Estate of Pakistan. I wonder what made the government impose this tax?
In the upcoming budget 2009-10, the federal government is likely to impose five to 10 percent duties on air conditioners, deep freezers and refrigerators, and around five percent on the import of and local sale of tea and coffee. Two percent additional duty on cosmetics and perfumes, a 10 percent increase in the duty on cigarettes and a five percent additional duty on the import of cigarettes is also expected.
The government is also likely to tax the CNG business with the removal of the 16 percent subsidy on the import of CNG kits and equipment and may also likely withdraw the zero rating tax facility for the pesticides, stationery and dairy products sectors.
Withholding tax on cash withdrawal from bank accounts and a five percent duty on the registration of new cars are also likely to go. The 16 percent GST on computer software and exclusion of some sectors from Presumptive Tax Regime (PTR) are also likely.
Thanks to everyone who have earlier dropped their comments on the topic of Pakistan Budget 2009-2010. We will be looking forward to same response once the budget is made public today.
Excerpts from Budget Speech (highlights)
- Budget speech started by Federal Minister Hina rabani Khar
- We missed some initial part since internet was giving tough time. Currently Agriculture sector in progress
- Excise duty on cellular down to 19%
- Excise duty on CKD down by 5%
- Regulatory duty on handsets of Rs. 250 abolished
- Rs. 50 bn allocated for IDPs
- Salaries to be raised from July 1
- Rs 264.9 bn foreign aid expected
- Petroleum leyv for development to end in Fy10
- Witholding tax on domestic vehicles ended
- SIM activation charges reduced from 500 to 200
- Most importance to be given to electricity and gas
- Corporate and rehabilitation act in final stages for Industrial sector
- Industrial relations act approved by cabinet for relationship between employer and employees
- NHA to get 40.2 bn (increased from 36 bn)
- Allocation for agri sector to be 18 bn
- Health secotr to get 23 bn (61% increase)
- Fata payables for PEPCO to be paid by Govt
- Current excise duty on cement to be reduced
- Souther Punjab to get power project
- Govt approves 2.2 bn for enviornment
- Education ministry to spend 2 bn on developing community schools and improve primary education
- 6419 new towns will be given electricity
- 4 bn allocated for Diamer Bhasha Dams
- 11 bn to be spent on PMs disease control program
- Tax on Ciggerattes to be increased
- Increase in CVT to generate 15 bn in revenue for FY10
- Benazir Human rights commission to be set up for Human rights
- National internship program to get 3.6 bn for 30,000 internships for youth
- 583 millions for sports
- Govt. employees to get 15% raise in salaries
- 15% adhoc relief allowance for army men on western borders (this will finish in december, since it is adhoc)
- Education to get 31 bn
- GDP growth in fy10 expected to be 3.5%
- Rehabilitation of earthquake affected to continue. 25 bn allocated
- CVT on real estate to increase to 4% from 2%
- Clean water allocation 47.2 bn
- Hina Rabbani Khar ends her speech with a positive note
To Download the Complete Budget Speech Click below link
Click here for English Version Speech of Pakistan Budget Speech 2009-10 (PDF)
Click here for Urdu Version Speech of Pakistan Budget Speech 2009-10 (Gif File)
To Download the Salient Features of Pakistan Budget 2009-2010 Click here
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There must be conveyance allowance for all the Government employees. I am daily travelling to Kamoke from Lahore. But I am not getting conveyance allowance at all.
Respected Sir,
Retired Government Servants and those Unemployeed Graduates who have obtained more than 60% of marks but are unemployeed since last ten years , should not be forgotten by this Government. This Government must provide a monthly pay to them also.
As the president Zardari, Announces in his speech that the Soldiers will get the Allowance equal to One month salary, in same manner the salaries of other Govt. Employees may be increased specially the teachers community should be given handsome increase in their salaries.
Hi, I am Govt. servant. And my specific point is reagarding % Increase in salaries. Who get the benefit is very simple. There is a huge difference in Basic salary of Lower grade and Higher grade. Any such increase gives benefit to only those with higher basic salary. So to help the lower class the % for lower grade must be higher. So the benefit can be equally effective in order to give relief. Thanks
I think there is no relief in the budget, Govt, enjoying the Period not serious for solving the issue of poor people if we don’t have the money why our president visit three or four in a month abroad, why we have the most largest cabinet if we don’t have the money where is the prime minister 100 day program. I think we don’t have competent Finance Minister or trade minister we are relying on the banker who will run the bank for three or four years and earned the profit then sale out. For GOD sake do some for country.
I studied different articles regarding the current budget of different Analyist. And I found one thing common in their articles, all they discourage/ denied too much assistance on Foreign Assistance. Also our Honourable Minister of State for Finance allocated the funds for IDPs & Banazir Income Support Program on Development side. But Development Expenditures are those expenditures which create assets for the country. I don’t know why Honourable Mr. Shaukat Tareen rely on Forieng Aid/assistance.
Besides it, I would like to share that most of the industries are remained sick for many years and if they become operatonal it may not only job opportunities but it may increase the supplies of goods in the country. But is the Government done something in this regard? The readers may havve more suitable answers for it.
Respected sir, I think that package for increasement in salary in the instant budget is not satisfactory, because the pay of the lower scale employees could not be met with day to day necessary needs and expenditures. I suggest that lower level employees must be granted a special allownce of minimum of Rs.3000/- for the time being circumstances.
WATCHING POVERTY GROW: A look at Pakistan’s budget
Electricity bills go up, so do gas prices as Pakistan government announced 0.2% for health-care, 0.8% for education and 12% for the army in the budget 2009-10. The only expenditure higher than the army’s in the budget is debt payment.
For now, the army is working for the money they make but their influence on the political set-up is obvious by the chunk of budget allocation they receive compared to the necessary public expenditure that keeps getting put off indefinitely. The minister, in her budget speech revealed that the war on terror has consumed 35 billion dollars. Americans paid ten and who paid the rest is everybody’s guess.
Most ironic is the exorbitant increase in electricity bills. The whole city of Karachi was without power for longer than 24 hours. Load-shedding of electricity for a few hours daily is the norm all over the country but consumers will see a minimum raise of one thousand rupees on their monthly bills.
Government has ear-marked Rs. 70 billion to be distributed to the poorest families. The program called Benazir income support fund would give $12.50 (one thousand rupees) per month to 5 million families who have no income. Close to a quarter of the 170 million Pakistanis live in extreme poverty.
Almost 75% Pakistanis live on an income below two dollars a day. Health-care is either hard to reach or very expensive. Middle class in the cities cannot afford necessary health-expense. For the large majority, government hospitals are the only resource and they are far and few and under-funded. The amount of Rs. 6.48 billion allocated for the health sector cannot improve on the provision of this necessity.
More than half of the Pakistani population is illiterate and Pakistan has existed for sixty-two years. Numbers speak for the government’s in-attention to this vitally important sector. With the US gestures for aid to be invested in the public sector, the allocation of a meager 0.8% towards education is pathetic.
Pakistan’s Rs.2.9 trillion budget relies on foreign aid and the government plans to seek help from IMF in case the aid does not come through on time. This budget projects a deficit of 4.9% and IMF could allow only 4.6% so the government intends to borrow money to make up for the difference. Broadening the Tax base by including agriculture could be a far-fetched idea for the government of feudal-lords. Agriculture contributes 22% to the GDP and yields only 1% of the revenue.
Rs.655 billion will be given to the provinces in 2009-10. The year before, provinces were promised more in the budget but received around Rs.600 billion. In 1948, sales-tax was taken over by the federation because national security demanded that provinces give it up. With the volatile situation in Baluchistan and a war in NWFP, the budget could be a good time to announce concessions for the provinces but a National Finance Commission is set to begin after a few months. Integrity of the country could depend on these issues but government has not shown any urgency.
Generations of Pakistanis are condemned to a life-time of hard labor on empty stomach to pay for the war, army, ministers, senators, MNAs, MPAs, international aid, loans and donations and still feel indebted to the donor countries without receiving a dime of help. The military and their feudal allies borrow on behalf of the people to keep their business running while the people are sinking deep in debt and poverty.
Respected Sir,
I want to submit a few lines about upgradation case of Senior Auditors of Pakistan Militray Accounts Department, AG Offices, the honourable FST has declared to upgrade to post from BPS14 to BPS-16 as equivalent to FBR senior auditors, but till date we have no good news from the Democratic Govt. of Pakistan in this regard.
I and other Senior Auditors appeals the Honourable President of Pakistan, Prime Minsiter Sb, to kindly look into the matter personally to solve this issue, and to prevent more injustice.
Regards.
Khalid
Email: khalid.awan.jalil@gmail.com
Dear All,
Having seen and followed many debates on government budgets and spending plans, I have come to realize this.
In order to allocate extra resources to either alleviate poverty or to create wealth, any government needs extra income.
Now this extra income can come from two sources.
a- Extra taxes.
b- Extra Borrowing.
British and German governments have usually followed the path where they have borrowed extra money to invest. For them, borrowing isn’t bad if it is to invest in projects that will pay for themselves in medium term.
For us, that’s not the road to go down for two reasons.
i- we are not responsible enough with our borrowings. Too much wastage either through corruption or lack of implementation of projects.
ii- the money we borrow ends up paying for previous loans.
I must, therefore, conclude that we need to raise taxes.
However, instead of raising taxes on salaried class of public sector, what really needs to be done is to bring the service sector i.e. Doctors, lawyers, stock-traders under tax net.
But more importantly, we need to bring the agriculture sector under tax net. If a mill-owner has to pay tax.. why not a land-lord?
The nitty gritty of it can be looked at.. but this, in my humble opinion, is a matter of political will.
.. and I do not see any, unfortunately. Neither in near nor distant future!
The Expat.
I think everyone can watch the show Corporate Corridor on dawn News tomorrow at 9:30 PM tomorrow. It talks about the effects of the budget on the banking sector so it is a must-see especially for those interested in the business sector as propagated by those in the business sector.
Dear sir,
The government employees have suffered a lot throughout the year and even now after so-called budget. How the government will able to justify its commitment to the employees after only 20% raise in their salaries???? Electricity prices have been raised once again besides the whole year increase. Have mercy on government employees who are still living hand to mouth.
Asif Iqbal
government employee
I HAVE NO COMMENT BUT I WANT TO HOW TO CALCULATE SALARY OF BASIC PAY SCALE.
PLEASE ALL OF, YOU HAVE KNOW THEN SEND MY E-MAIL snomanali.shah@gmail.com
REGARDS.
where is education man.budget mst b increase 4 education
the staff of Water Management NWFP are working with out since July 2009 due to financial problem with the federal government , I am requesting to Government officials of Pakistan please solve the problem of the On Farm Water Management Staff and release their salaries as soon as possible .
Zia Ul HAq
Assisatant Director
On Farm Water Management Chitral
ASALAM-O-ALAIKUM its reality and no one can deny from this that our bedget is not sufficient for public but i wana further say that if govt: properly and efficiently utilize this among the different sectors then it can become beneficial for whole of the public.
PAKISTAN ZINDABAD
Now what are the gross salaries of pay scales in pakistan anyone can tell me
Dear Sir,
I want to give suggesstion for the pay and pension commission that there must be equal ‘house rent’ and ‘conveyance allowance’ for big as well as small cities.
Thanks
Respicted Sir,
As the president Zardari Sahib, Annouces in his speech that the soldiers will get the allowances equal to one month salary in the same manner the salaries of other govt. Employees may be increased specialy the clerk community should be given hand same increase in their salaries, canvance allowance and other allowances.
Thanks.
yes this is really very good information that you have provided over here
its very informative for us and the readers.
i am really glad to know about this information because being the finance student i really need this to update my self.
i am working on finance projects due to which i have to be in touch with current financial knowledge.
thanks for providing this information.
I read about upgradation of Sr.Auditors from BS14 to BS16. Plz any one will tell me detail of this FST decision. I am awaiting for the same.
Rental Ceiling should be made part of monthly salary. Other perks and prividiges should be monetized.
I think that the increase in salaries should be 100% of running basic pays of each employees of grade 1~16 either in revision of basic pays or in shape of an adhoc allowance.
I think we can improve position of Pakistan just by putting out efforts on those areas or goods which are beneficial for Pakistan in future. I survied many of areas and place from which Pakistan Government can improve position of Pakistan but they are not puttung their efforts on those palces. Why??????? Will any one answer me……….
Dear Sirs,
I am working from last 7 years. I am getting salary Rs.12000/- including all benefits.
It is state reponsibility to provide job to qualified bachulars. While maintaining minmum salary of workers, officer should not be ingored
I want to give suggesstion for the pay and pension commission that there must be equal ‘house rent’ and ‘conveyance allowance’ for big as well as small cities.
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