Finance Minister Asad Umar presented the third finance bill for the current fiscal year during the National Assembly session being held Wednesday evening.
Earlier, Umar, without revealing any specifics, had said the ‘mini-budget’ — technically the Finance Supplementary (Second Amendment) Bill of 2019 — would help generate more revenue for the government.
Speaking amidst loud jeering by opposition lawmakers, the finance minister described the bill as a measure to address the people of Pakistan’s needs.
“This is not a budget, this is a corrective package aimed at addressing various sectors of the economy,” the finance minister clarified at the start of his speech.
Starting his speech with an assessment of Pakistan’s economic condition, the finance minister said his aim had been to eliminate all factors that necessitate a return to the International Monetary Fund for a bailout package by successive regimes.
“The Constitution ensures the rights of the underprivileged segment of society and it is the Pakistani government and parliament’s responsibility to reduce the gap between the rich and the poor. Unfortunately, this responsibility was never fulfilled,” the finance minister continued. “I wish to recommend measures for the prosperity of this country,” he added.
“The people sitting on my right [the opposition had left nothing when they were leaving the government. Instead of reforming themselves, the last ruling regime tried to buy an election. The budget deficit, as presented by them [in their budget], should have been 4.1 but the actual deficit at the end of the year clocked in [much higher],” he said, speaking above opposition shouts of “Liar, liar!”
“They destroyed the electricity [generation and distribution] system and left us a Rs450bn deficit. The gas [distribution] system which had never witnessed a deficit has now recorded Rs150bn deficit,” he complained. “Similarly, the deficit was around Rs30bn in Railways.”
“They left the the country indebted with Rs2,500bn to Rs3,000bn in loans that were not shown in the books,” he further alleged.
“I wish those shouting ‘Liar, Liar!’ right now had called out their own ministers when they were in power,” he said after recounting the challenges he said he had inherited.
“We took several difficult decisions, and I appreciate that the people realised that these difficult decisions were necessary,” the finance minister said.
“I want to give them the good news that these difficult decisions are yielding dividends: the deficit is reducing, exports are increasing and imports are declining. We need to bring a balance in revenue and expenditure as it is vital for growth. Our imports are touching a dangerous point. We have to increase exports and bring reforms in the agriculture and other sectors,” he said.
“The camera is recording [when I say this]: At the time of the next election, the PTI govt will not have to purchase an election [like our opponents attempted to]. The years 2022 and ’23 will witness the highest growth as compared to the period from 2008 to 2023,” he claimed.
Earlier today, the federal cabinet headed by Prime Minister Imran Khan was given a briefing on the bill, after which it was taken to the parliament for debate.
What was expected from the mini-budget
The supplementary budget was expected to offer major incentives to boost the stock market, housing, agriculture and industrial sectors, besides imposing punitive duties on luxury imports.
According to the finance ministry’s adviser and spokesman Dr Khaqan Najeeb Khan, the mini-budget would support ease of business processes, simplify procedures and facilitate business by reducing bureaucratic red-tape.
Informed sources, however, said the government was planning to reverse documentation reforms introduced for the equity markets in a bid to turn around the declining stock index which fell from its high at 53,000 points in 2016 to around 38,000 points at present. The package was also likely to include the reduction and removal of some tax rates, commissions and capital gains tax.
Third bill for fiscal 2019
The ‘mini-budget’ would constitute the third finance bill for fiscal 2018-2019.
The National Assembly had in May 2018 passed the Finance Bill 2018-19 during the tenure of the PML-N government, the basic structure of which remained the same as announced by then Finance Minister Miftah Ismail on Apr 27, 2018.
Then, in September 2018, Umar had presented the incumbent Pakistan Tehreek-i-Insaf (PTI) government’s amendments to the budgetannounced by the PML-N.
The highlights of the amendment included a cut in federal development programmes and measures to bring the budget deficit down to 5.1 per cent.
Tax rates were lower than the previous year and the tax relief that had been granted by the PML-N was revoked from salaried persons earning more than Rs200,000 per month. The tax rate in the highest income tax slab was raised from 15 pc to 30 pc. The rate of withholding tax on banking transactions for non-tax filers was increased to 0.6pc
Other developments included an increase in federal excise duty on imports of luxury vehicles and duties on ‘expensive’ cell phones. Customs duty was also increased on more than 5,000 ‘luxury’ items. Regulatory duty was increased on the import of more than 900 items.
Opposition opposes govt decision to announce mini-budget
On Jan 16, the government had sought the opposition’s support for the mini-budget announced today. National Assembly Speaker Asad Qaiser had facilitated two meetings between the government and opposition in which the issues of the mini-budget and formation of committees of the NA were discussed.
However, leaders of various political parties had opposed the government’s plans, saying the mini-budget “will add to the miseries of public” and “badly affect the commerce and industrial sectors in the country”.
Parliamentary leader of the PPP in the Senate, Sherry Rehman, had in a statement expressed her reservations over ever-increasing prices of various commodities.
Similarly, several PML-N leaders, including former prime minister Shahid Khaqan Abbasi, had also criticised the government’s move to present another finance bill.
Speaking at a news conference on Jan 12, the PML-N leaders had lashed out at the PTI government for what they termed “directionless and failed” economic policies, which they claimed had drastically brought down the country’s growth rate in just five months.
