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Friday, June 3, 2011

Govt unveils Rs2.767 trillion budget amid protest

ISLAMABAD: Finance Minister Abdul Hafiz Sheikh presented Federal Budget 2011-12 in the Parliament Friday amid protest by opposition members during his speech,.

The government earmarked 2.767 trillion rupees as its budget outlay for the 2011-12 fiscal year, a 14.2 percent increase from 2010-11 fiscal year. The budget deficit is four percent of the GDP, or Rs. 850 billion.

Opposition members created chaos in the house when the session begun with Speaker Dr. Fahmida Mirza in chair. They stood up on their seats and chanted slogans against government and the US.

In order to lodge their protest, women opposition member threw bangles and rings towards the Prime Minister Syed Yousuf Raza Gilani during finance minister’s budget speech, further adding to the melee.

The MPs agitated in front of the speaker while the finance minister continued delivering his speech.

Sheikh said there is no government intervention in regulatory bodies. “Inflation is now much lower due to government’s pro-poor polices,” he claimed.

Out of the total budget, Rs. 730 billion was being set aside for development, with Rs. 300 billion for federal development and Rs430 billion for provincial development projects.

Federal revenue was estimated Rs 1.952 trillion, while non-tax income estimates are put at Rs. 657 billion.

Sheikh said Rs40 billion have been earmarked for health and education project, and that government employees’ salaries and pensions were being raised. “The salaries of government servants will be raised by 15 per cent and pension will be increased by 15 to 20 per cent.”

Shaikh said more than 71,000 people in the country have been issued tax notices, while just 1.5 million people pay taxes, adding that the General Sales Tax (GST) has been reduced.

He further stated that Rs.50 billion had been allocated for the transport sector. HEC to get Rs14 billion during the fiscal year 2011-12, Sheikh said.

According to the budget speech, Rs158 billion has been allocated for Federal ministries development, Special programs to get Rs33 billion. Rs20.5 billion were allocated for Bhasha Dam while the Nelum-Jhelum hydro power project to get Rs10.8 billion, while water projects to get Rs35 billion.

Following are the highlights:


- Total revenue (tax revenue and non-tax revenue) is targeted at 2.732 trillion rupees, out of which the Federal Board of Revenue aims to collect 1.952 trillion rupees, compared with 1.588 trillion in 2010/11 fiscal year.

- Defence spending will increase to 495 billion rupees for 2011/12, compared with 442 billion rupees in the year ending June 30.

- External receipts are estimated at 414 billion rupees, an increase of 7.1 percent over budget estimates for 2010/11.


- Ending special exemptions and zero ratings.
- Reduction of the general sales tax to 16 percent from 17 percent.
- Tax rate for commercial importers on value addition rises to 3 percent from 2 percent.


- Pakistan will cut its subsidies to 166.5 billion rupees for 2011/12, compared with 395.8 billion rupees in the 2010/11 fiscal year.

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