BUDGET OF PAKISTAN---2012-2013

• Budget session begins under the chair of Dr Fehmida Mirza
• Newly elected member Israr Tareen took oath
• Finance Minister Hafeez Sheikh delivered budget speech amid opposition protest.
• The economy the government inherited in 2008 was very unstable, unbalanced and in bad shape. Foreign exchange reserves were down and the value of the rupee was falling swiftly because of which the business fraternity had lost confidence. The oil prices in the international market had reached a historic peak of $145 in July 2008. In September 2008 due to the global economic crisis the developed world was facing depression. The growth rate of developed economies had on average fallen by 2.8%.
• The opposition members clashed with the treasury benches.
• In such conditions the present government assumed responsibilities in March 2008. During political change the external shocks of the rising oil and food prices on a large scale, global economic chaos, large scale expenditure on security and policies created a crisis situation.
• In 2008 due to the national economic pressure and global economic crisis unnecessary dependence on the dollar and transfer of investment to foreign countries was on the rise.
• In the last four years despite the challenges like a decline in the global economy especially in the developed countries, economic commotion, devastating floods of 2010, more than usual rainfall in 2011, successive increase in oil prices and the ever changing security situation, the government achieved a lot.
• During the 2011 fiscal year an unexpected improvement was seen in the foreign exchange account of Pakistan which to an extent provided some support to the economy. Exports reached 25.4 billion dollars which shows an increase of 28.4% where as in respect of imports there was an increase of 14.7%.
• The present government has taken new steps in the last four years.
• 70% share of the divisible pool is now being transferred to provinces and specific area.
• The amount in the 6th NFC award in the 2010-11 fiscal year was 999 billion rupees where as in the 2011-12 fiscal year the estimated amount in the 7th NFC award was 1204 billion rupees.
• Due to the 18th amendment in the constitution the concurrent list was eliminated and 17 ministries were transferred to the provinces.
• In respect to subsidies the government in the last four years has so far:

(1) Given a subsidy of more than a 1000 billion to consumers of electricity to give relief to the poor.
(2) 104 billion rupees petroleum subsidy.
(3) 110 billion rupees were given for subsidies on urea.
(4) 137 billion rupees were spent for nutritional aid.

• To keep the petroleum prices down the present government gave an exemption of 136 billion rupees in reference of petroleum levy.
• The government provided additional resources of 138 billion rupees to the deserving underprivileged in accordance with the Benazir income support program.
• In four year 119 billion rupees were given collectively to railways.
• The government is working on several fronts. Recently an energy policy was formulated which will improve supply of energy. The government is rebuilding the electricity distribution companies keeping in mind increase in their profits.
• The government has restructured the board of directors of some government institutions in the energy sector. In addition to that programs for alternative energy were introduced and steps were taken for better organization of the budget and solving the problem of circular debt.
• For the purpose of tax simplification the government:

(1) Improved the procedure of the tax system.
(2) The level of application of income tax was increased from 100,000 to 350,000.
(3) Increased the tax base.
(4) Empowerment of the tax department
(5) Elimination of the special excise duty
(6) Start of a systimetic elimination of the federal excise duty.
(7) Elimination of regulatory duties on 392 items.
(8) Elimination of zero rating on key sectors.

• Result of these efforts was that the tax collection of the federal board of revenue increased from 1000 billion rupees in 2007-08 to 2000 billion rupees in 2011-12.
• The estimated economic growth for the current year (2011-12) is 3.7%.
• Estimated growth of agricultural sector 3.1%, industrial sector 3.4% and services sector is 4%. All this is despite the devastating rains that destroyed agricultural production and property in Sindh on a large scale.
• Rs70 billion have been earmarked for for BISP.
• Export Development fund would get Rs10 billion.
• NO additional tax for the people.
• Tax exemption ceiling raised from Rs350,000 to Rs400,000.
• Income tax payers honour cards for law abiding tax payers.
• The Prime Minister House will be transferred into an educational institute.
• The ratio of tax to GDP in fiscal year 2011 is 9.6% whereas the ratio of FBR is 8.6%.
• Income Tax Exemption limit raised by Rs. 50,000 to Rs. 400,000.
• Finance Minister announces withholding tax to be imposed on daily withdrawals above Rs. 50,000.
• Income tax slab reduced from 17 to 5.
• Income tax payers honour cards for law abiding tax payers.
• Federal excise duty on 10 more items waived.
• No more withholding tax on withdrawal of Rs25,000 from banks.
• Now withholding tax will be charged on Rs500000 withdrawal.
• Excise duty on livestock exempted.
• Economic growth increased despite challenges.
• Fiscal Deficit estimated to be Rs1.185 trillion for 2012-13.
• Subsidy of Rs183 billion allocated for energy sector.
• The Finance Minister ended his speech at 06:31 pm.