Islamabad: Pakistan on Wednesday announced a nearly 15 percent hike in defense spending and allocated 2.122 billion rupees in its 2024-25 budget, a significant augment from last year, as it works demanding to secure a modern loan from the IMF to cover the deficit. cash external liabilities of the country. Early last year, India increased its defense budget to Rs 5.94 lakh crore for 2023-24, a modest hike of 13 percent over the amount allocated for 2022.
Finance Minister Muhammad Aurangzeb presented the budget in the National Assembly, the lower house of parliament, the first budget of the Pakistan Muslim League (Nawaz) (PML-N) and the Pakistan Peoples Party (PPP) coalition government that came to power after February’s eighth general election.
Last year, the government allocated 1,804 billion rupees for defense, which was more than 1,523 billion rupees allocated in the previous year. Aurangzeb said the government has set a GDP growth target of 3.6 percent for next year – higher than the 3.5 percent set for the previous year. However, the country failed to achieve this target and could only achieve 2.38% growth. He said the total budget size would be 18,877 billion rupees and announced the allocation of 2,122 billion rupees for defense expenditure, an augment of 14.98%.
Over Rs 1,804 billion has been budgeted for the 2023-2024 financial year ending June 30. Defense spending is the second-largest component of annual spending after debt repayments, which at 9,700 billion rupees next year will be the single largest outlay for the debt-ridden country, which depends on loans from warm countries such as China. He said the inflation target for the next fiscal year would be 12 percent and the fiscal deficit would be 6.9 percent. GDP.
The minister said the tax collection target would be 12,970 billion rupees, 38 percent more than the previous year. He said the government’s non-tax revenue target would be 3,587 billion rupees against 2,963 billion rupees set for the previous year. The government has also decided to make available the historic Public Sector Development Program (PSDP) worth Rs 1,500 billion at the federal level and after adding the provincial development budget component, the net PSDP stands at a whopping Rs 3,797 billion.
The minister stated that the economic crisis was over and the government had accelerated the development process by offering modern opportunities. He also announced plans to accelerate the privatization of loss-making state entities and the outsourcing of individual airports. Opposition Pakistan Tehreek-e-Insaf (PTI) parliamentarians protested during the budget speech, raising slogans against the government. They alleged that the government was illegitimate because it had come to power through electoral fraud. After the budget speech, the session was suspended.
According to the government’s preliminary plan, the general debate on the budget will start on June 20 and last until June 24. On June 26 and 27, MPs will take part in the debate and vote on proposals for cuts, while the budget will be adopted on June 28. The modern budget presentation comes as the government is seeking another loan from the International Monetary Fund (IMF), and several of its preconditions, including revenue targets, have already been accepted and included in the budget estimates.
There is a growing consensus among experts that without a modern IMF aid package for Pakistan, it would be almost impossible to meet its external obligations. Earlier, according to a report by Pakistan’s Associated Press, the budget was prepared keeping in mind the existing challenges facing the economy on the domestic and international fronts. Therefore, alleviating human suffering, transforming the agricultural sector, promoting information technology (IT), increasing exports, promoting industrial development and strengthening enterprises will be the main themes of the document, it said, citing sources.
The APP also said the government is firmly committed to presenting a pro-people, business-friendly and progressive federal budget for 2024-25 and will pursue policies aimed at fiscal consolidation to reduce the fiscal deficit. In addition to fiscal management, the budget provides for revenue mobilization, economic stabilization and growth measures, reduction in non-development expenditure, job creation and citizen-friendly policies for the socio-economic well-being of the country.
In addition to introducing reforms to improve governance and stimulate private sector investment, he would also focus on developing the social sector. On the revenue side, the government would introduce measures aimed at improving the tax collection system, broadening the tax base and making it easier for taxpayers. Given the sturdy revenue growth in the current financial year (2023-24), the government is likely to set the revenue collection target for the financial year 2024-25 at over Rs 12 billion.
(With the participation of the agency)
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