Finance Minister Asad Umar presented the supplementary finance bill in the National Assembly on Tuesday.
“These are difficult times and difficult decisions need to be made. You do not have to be an economic expert to realise this,” Umar said.
Prime Minister Imran Khan, ministers, and lawmakers from various political parties attended the NA session today.
As he began his speech, Umar recalled that fiscal deficit had increased from 4.1 per cent at the start of the last government’s tenure to 6.6 per cent at the end of its term.
“The country stands at the same place where it was after five years,” the finance minister lamented, adding that the fiscal deficit might reach to 7.2 per cent [2,900 billion rupees] in FY19. Umar also recalled that the current account deficit increased from 2.5 billion dollars in 2012-13 to 18 billion dollars in FY18.
“In the five-year term [of the Pakistan Muslim League-Nawaz government], foreign debt increased by 34 billion dollars, while foreign exchange reserves continued to decline speedily,” Umar said.
He further said that the depleting foreign exchange reserves have led to the Pakistan rupee’s depreciation.
“We need to decide, not the government alone, but the Parliament together, if we want to continue like this,” Umar said.
“The government overestimated revenues by 350 billion rupees and understated expenditures by 250 billion rupees. In total, there is an 890 billion rupees difference in the projected and budgeted figures for the deficit which we have to arrest.”
“These are difficult times, and they call for difficult measures,” the finance minister added.
“We need to make sure the burden of our economic measures fall on those who can bear it. The poor are already resource-stressed, and we cannot burden them further.”
“Sure, we can seek bailouts but that is not the solution. We can only grow when our economy grows, our industries and our people grow,” Umar stressed.
The proposed amendments by the Pakistan Tehreek-e-Insaf government include removal of regulatory duty on raw materials used by export industries. “Zero duty on raw materials will benefit the export industries by Rs 5 billion,” Umar noted.
Major points
- Govt withdraws decision to increase petroleum development levy
- Rs5 billion relief provided to export industry
- Minimum pension increased to Rs10,000
- Duty on expensive mobile phones to be increased
- Duty on 1800cc and above vehicles set at 20 per cent
- WHT on banking transactions for non-filers increased to 0.6 per cent
- Health card system will be introduced across Pakistan
- Non-filer will be able to buy vehicles, property
- Tax on tobacco to be increased
