2009–10 Pakistan federal budget

2010 (2010) Budget of the Islamic Republic Of Pakistan federal government
Emblem of Pakistan
Submitted	13 June 2010
Submitted by	Naveed Qamar
Submitted to	National Assembly
Website	http://www.finance.gov.pk/ Ministry of Finance
‹ 2008 2010 ›

The Pakistan federal budget of 2009-2010 has been prepared in accordance with the budgeting and accounting classification system that has been approved by the Government of Pakistan as an integral part of the New Accounting Model. This is the first year the federal budget is being prepared using the newly adopted Medium-Term Budgetary Framework (MTBF). Under this method macro projections are made over a rolling 3-year budgetary horizon. This year, expenditure ceilings were issued to Ministries on recurrent budget after Cabinet’s approval, in line with the Government’s stated priorities.^[1]

Overview

The Government of Pakistan announced federal budget for fiscal year 2009-2010 having total volume of Rs2.489 trillion.The following major changes reported by federal government:

Rs50 billion allocated for the displaced of operation in Malakand Division
Inflation rate has declined to 14.4 percent and it will further decline to single digit in the next fiscal year
Rs1.488 billion has been allocated for courts
Tax base will be broadened
Property gains tax will be expanded
CVT will be continued
GDP growth expected to be 3.3 percent for 2009-10
Salaries of armed forces will be raised from July 1
Inflation target for 2009-10 will be 9%
Rs 70 billion for Benazir Income Support Program for 09-10
Fiscal deficit will be limited to 4.9 percent or Rs722 billion
Current expenditure will be curtailed by 15.3 percent
Carbon surcharge will be introduced in FY10
Withholding tax on domestic vehicles ended
Rs2.2 billion allocated for environment
Tax target raised to Rs 2.17 trillion
Rs23.1 billion for health.
Duty on wind power plants withdrawn.
Social protection net being introduced for farmers.
Agriculture and value addition to be given special attention.
Use of new technology in agriculture sector to be encouraged.
Rs18 billion for PSDP which is 25 percent higher than the previous year
CVT on property to be increased to 4 percent from 2 percent.
Petroleum development levy to end in FY10.
Government raises salaries of government of employees by 15 percent.
Tax Collection Target has been set at Rs 1377.5 billion
Current Expenditures are estimated at 1699.19 billion
Allocation for People’s Works Program: Rs 28 billion
Allocation for Workers’ Welfare Fund: Rs 10.8 billion
Government and armed forces’ retired employees will receive 15 percent raise in their net pensions from July 1, 2009
An increase of allowance equivalent to one basic pay, effective from July 1, 2009, has been approved for the military’s personnel deputed in the western part of the country. All the members of the armed forces will get the same from January 1, 2010.
Rs 262 billion are for federal ministries
Rs 38 billion are for Azad Jammu and Kashmir, FATA and Northern Areas
Rs 60 billion are for Corporations
Rs 60 billion are for Water Sector Development
Rs 47 billion are for Dams Construction/Raising
Rs 18 billion for Agriculture
Rs 23.15 billion have been allocated for Health sector
Rs 32 billion have been allocated for Education with Rs 22.5 billion for Higher Education
Development Budget allocated for the Provinces: Rs 200 billion
National Highway Authority will receive Rs 40.2 billion
Rs 12.7 billion are for Railways
Rs 70 billion are allocated for Transport and Communication
Rs 85 billion have been allocated to overcome energy crisis and would be spent on Electricity, Gas and Water Supply projects.
Rs 2.96 billion have been allocated for environment protection
Rs 3.6 billion are for National Internship Program
Rs 450 million for cultural development
Rs 583 million for Sports
Rs 300 m allocated for Postal Ministry in PSDP-2009-10
Communications Division gets Rs.45971.990 million in PSDP 2009-10, NHA gets Rs 45706.090
Govt allocates Rs.50.000 mln for NRB
Rs. 3265.377 mln earmarked for 132 projects of Science & Technological Research Division
Govt. allocates Rs 16709.980 mln for Food Agriculture Division
Tax on imports raises to 4% from 2%.
Rs12 billion allocated for Mangla dam
Govt to set up export houses.
Excise duty on cellular down to 19 percent
Excise duty on CKD reduces by 5 percent
SIM activation charges have been reduced from Rs500 to Rs250
The funds for the science and technology being doubled
Rs10 billion fund allocated for SMEs
Govt to spend Rs4 billion on Benazir Tractor Scheme for small cultivators in next two years
Rs47 billion allocated for water resources management under PSDP
The govt not to increase tax on industry
600 filtration plants being set up
sales tax abolished on wheel chairs
Wind energy projects to be set up in and around Gharo
Amount for wedding assistance raised from Rs5000 to Rs70000
The limit of health insurance will be Rs25000 annually
The retired govt employees and army personnel to receive new raised pension from July 1
Rs60 billion allocated for water
Rs12 billion for Pakistan Railways
Rs250 levied as custom duty on mobile sets.
Rs40 billion allocation for export investment fund.
Rs166 billion for construction of dams
Small and medium-sized dams will be built^[2]

Main allocations

The provincial share in federal revenue receipts is estimated at Rs 655 billion during 2009-10, which is 15.3 percent higher than the budget estimates for 2008-09. The capital receipts (net) for 2009-10 have been estimated at Rs 191 billion, against Rs 221 billion budget estimates of 2008-09.

The external receipts in 2009-10 are estimated at Rs 510 billion, which shows an increase of 70 percent over the budget estimates of 2008-09. The overall expenditure during 2009-10 has been estimated at Rs 2482 billion, of which the current expenditure is Rs 1699 billion, and development expenditure at Rs 803 billion.

Current expenditure shows an increase of 3.5 percent over the revised estimates of 2008-09, while development expenditure will increase by 68.1 percent in 2009-10 over the revised estimates of 2008-09. The share of current expenditure in total budgetary outlay for 2009-10 is 68.5 percent, as compared to 79 percent in the revised estimates for 2008-09.

The expenditure on General Public Services (inclusive of debt servicing transfer payments and superannuation allowance) is estimated at Rs 1189 billion, which is 70 percent of the current expenditure. The size of Public Sector Development Program (PSDP) for 2009-10 is Rs 646 billion, while for other development expenditures an amount of Rs 157 billion has been allocated.

The PSDP shows an increase of 54 percent over the revised estimates 2008-09, which were mercilessly slashed during the current year to meet the budget deficit target agreed with the IMF. The provinces have been allocated an amount of Rs 200 billion for budget estimates 2009-10 in their PSDP.

An amount of Rs 25 billion has been allocated for Earthquake Reconstruction and Rehabilitation Authority (Erra) in the PSDP 2009-10. However, there are no foreign loans expected for this purpose in 2009-10. The budget for fiscal year 2008-09 was estimated a total of 31250 million rupees but the revised estimates gave a zero figure. It is not clear whether this is indicative of the donors’ backing out of their commitments.^[3]

Change

The government on 18 June withdrew the decision of levying carbon surcharge on Compressed Natural Gas (CNG) by deleting the word “carbon” from the head of the levy. Now “surcharge” will be used for taxing petroleum products from financial year i.e. 2009-10 after severe drubbing from different quarters. Prime Minister Syed Yousuf Raza Gilani agreed on the proposal of 20 percent increase in salaries and pension of government employees. Tax on SMS has been removed.

References

External links

Economy of Pakistan

History	Numbering system Five-Year Plans Nationalization Privatization Corporatization Fauji Foundation Islamic economization Economic liberalization Medium Term Development Framework Periods of stagflation

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Taxation	Federal Board of Revenue Tax on cash withdrawal

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Domestic economies	Azad Kashmir Balochistan FATA Gilgit-Baltistan Islamabad Khyber Pakhtunkhwa Punjab Faisalabad Lahore Rawalpindi Sindh (Karachi)

See also	Central business districts Foreign aid Foreign trade International ranking Investment in Pakistan Sister cities Provinces by GDP Pakistanis by net worth Politicians Standard of living

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