Budget of Pakistan2010-11

An introduction to budget:
The Budget is an important policy document through which the Government establishes its economic and social priorities and sets the direction of the economy. the preparation of the budget draft is the task of the government.

Budget 2010-11:
As we know that our budget year starts from June 1st of every year. The budget of Pakistan 2010-11 was presented in the national assembly by Dr. Abdul Hafeez Sheikh. It was presented on June 5, 2010. The total outlay of the budget was Rs 3259 billion, which is 10.7 percent more than the current year. This budget offered incentives for the salaried class besides tax exemptions. The salaries of the members of the federal cabinet were decreased by 10. Estimated receipts revenue was 1.9% more than the previous year. An amount of Rs 10 billion was also allocated to earthquake reconstruction and rehabilitation authority (ERU). The total estimated deficit for this year was Rs. 685 billion. A 17% increase in the defense budget of the country was introduced. All non-developmental expenditures were frozen..

Salient features:
The main aspects and features of the budget 2010-11 are as follows: Salaries of the government employees were raised by 50% while the salaries of the members of the federal; cabinet were decreased by 10%. 15 % increase in the pension of the employees who retired before 2001 and 20% for those who retired after it. Medical allowance for grade1-15 employees was increased by 100% and that of grade 16-22 is 15% of their basic pay. Inflation is targeted at 9.5%. Baitul Maal will keep working with Rs. 2 million. Three dams to build in this year. Defense budget was Rs. 442.2 million which is 17% more than 2009-10 Rs. 40 billion to be distributed among poor people by Benazir Income Support Program. Minimum wage is raised from Rs. 6000 to Rs. 7000. Rs. 663 billion was allocated in Public Sector Development Project (PSDP). For solving the issue of unemployment, the youth scheme was introduced in which 200,000 people will be employed for 100 days. Tax revenue is estimated at Rs. 1.78 trillion while non-tax revenue at Rs.1.12 trillion. The overall expenditure during 2010-11 has been estimated at Rs 2764 billion of which the current expenditure is Rs 1998 billion and development expenditure at Rs 787 billion. The debt to GDP was raised to 55%. Subsidies reduced from 228.99 billion to 126.62 billion rupees.

Custom duty is reduced on 29 items. No sales tax on health and food. Net revenue receipts are estimated at Rs. 1377 billion which are 1.9% more than the previous year. The capital receipts for year 2010-11 are estimated at Rs. 325 billion which is an 70.2% increase than the year 2009-10.

Public Sector Development Programme (PSDP) 2010-11:

In PSDP total of Rs. 663 billion was allocated. Among it, Rs. 280 billion is the federal share and Rs. 373 billion is the provincial share. The remaining Rs. 10 billion was is to be spent on reconstruction of earthquake affected areas. The other details of PSDP are given as follows: Finance division: Rs.14565.7 million Higher education commission: Rs.15762.5 million Pakistan atomic energy commission: Rs.15227.5 million Health: Rs.16944.5 million Planning and development: Rs.9395.7 million Railways: Rs.13629.6 million Food and agricultural division: Rs.10873.7 million Industries and production sector: Rs.3220.1 million Science and technological research: Rs.1646.2 million Housing and works: Rs.3618.3 million Defence sector: Rs.3887.1 million Livestock and Dairy Development: Rs.885.6 million Interior division: Rs.5584 million Education: Rs.5140.9 million Water sector: Rs.28423.8 million Cabinet division: Rs.3618.7 million Population welfare: Rs.4115.5 million Law and justice: Rs.1000 million Environment: Rs.1000 million Revenue division: Rs.1234.7 million Special Initiatives Division: Rs.1000 million Petroleum and natural resources division: Rs.1234.7 million Information technology and Telecom: Rs.718.3 million Commerce : Rs.474.1 million Defence Production Division: Rs.1229.7 million Communication division: Rs.149.1 million Ports and shipping: Rs.518.6 million Social welfare and special education: Rs.107.6 million Tourism: Rs.107.6 million Pakistan nuclear regulatory authority: Rs.246.9 million Ministry of foreign affairs: Rs.140.8 million Labour and manpower division: Rs.65.8 million

Tax details:
The government took many measures and steps in this regard like GST will be reformed to eliminate multiple tax rates and to apply a single rate of 15%.this GST will not apply on health, education and food items. Following are some other details of the tax measures taken in this budget. 1% excise duty on many import items and locally manufactured products is exterminated. Re. 1 FED (1) is imposed on manufacturing of each single cigarette. Rate of income tax on electricity bills for industrial and commercial consumers is reduced to 5% instead of 10%. An additional tax relief of Rs. 2 billion is given to FATA (2) and PATA (3) to benefit more than 300,000 taxpayers. Rate of final withholding tax on non-specified payments for non-residents is reduced form 30% to 20%. A 5% tax credit is proposed on a company in the year of its enlistment. The withholding tax for commercial importers is increased from 4% to 5%. Turnover tax on companies going in loss is increased from 0.5% to1%. Withholding tax on travelling inside the country is now 5%. Capital gains tax of 10% is imposed on stocks and shares held for less than 6 months, 7.5% for stocks held for 6 months to 1 year and no tax on stocks and shares held for more than 1 year. Recovery of large tax arrears can now be paid by easy installments. The citizens of age more than 60 years are given a relief of 50% tax on their income if their income is less than Rs. 100,000. Advance tax exemption in electricity for year 2010 and 2011 and exemption on withholding tax on exports is announced.

Women development: Rs.152.9 million Local and rural government: Rs.82.3 million Narcotics control: Rs.549.8 million Sports: Rs.229.6 million Youth affairs: Rs.74.5 million Culture: Rs.353.9 million Information and broadcasting: Rs.509.9 million Establishment: Rs.114.4 million Textile industry: Rs.164.6 million Ministry of postal services: Rs.81.1 million Economic affairs: Rs.15 million Statistics division: Rs.82.3 million Water and Power Development Authority (WAPDA): Rs.12029.7 million Peoples Works Programme-I: Rs. 5000 million Peoples Works Programme-II: Rs. 25000 million National Highway Authority: Rs. 44637 million Azad Jammu and Kashmir: Rs.10523.5 million Gilgit-Baltistan: Rs.6584.9 million

Budget of provinces:
After the declaration of budget from the national assembly, all the provinces then presented their own budgets. Some of the few main details of them are as follows:

Income tax exemption limit is increased form Rs. 0.1 million to Rs. 0.3 million.

Budget of Khyber Pakhtunkhwa:

A Rs. 294.2 billion deficit free budget of KPK was declared on june,12 2010. This budget was presented by minister of finance of finance, Engineer Mohammad Humayun Khan. According to him, the expenditures and income receipts (1) are just equal to the budget amount so this budget is said to be a balanced one. Rs. 123.4 billion of receipts are expected to be received from federal taxes. They are going to get a special grant of Rs. 15.2 billion for war against terror and Rs. 7.2 billion from provincial taxes. They will get Rs.12.3 billion fro GST and Rs. 400 million in general capital receipts. Rs. 94 billion are allocated to health and education. Rs. 21 billion for police and 11 billion for pensions, Rs. 51.9 billion for districts for salaries etc. Rs. 150 million are allocated to revenue and estate department for relief works. ADP (1) is allocated Rs. 69.3 billion. The salaries and pension criteria is same as of federal govt. according to Finance minister, the provincial ministers voluntarily agreed to cut down their salaries by 20%

Budget of Punjab:
This budget was presented by the finance minister Tanvir Ashraf Kaira with a total of Rs. 580 billion. In this budget, ADP is allocated Rs, 193.5 billion. This budget included announcement for new seats in medical and engineering colleges as well as three new medical colleges. No new taxes are imposed in this new budget. The government decided to continue the sasti roti scheme. The revenue target for this year is at Rs. 61 billion. Rs. 60 billion are allocated for law and order and Rs. 100 billion for health, education and agriculture.

Budget of sindh:
Sindh was the first among all the provinces to announce their budget with a size of Rs. 422 billion. This budget was presented by the Chief Minister Qaim Ali Shah. It was claimed to be a tax free budget but a stamp duty in sales tax and Rs. 40 billion are estimated to be collected in sales tax and there was also an increase of 27% in the receipts similarly capital gains tax is imposed for the first time.. Rs. 1.8 billion are likely were likely to be allocated for the qualification and allowance of the teachers.

Budget of Baluchistan:
Baluchistan budget of Rs. 152 billion was presented by Finance Minister Baluchistan Mr. Mir Asim Kurd Gello. They allocated Rs 1 billion for building schools and colleges and said to create 5000 new vacancies in education sector. Rs. 1.13 was allocated for health and Rs. 1 billion for medical equipments in the same sector. A total of Rs.26.75 billion are allocated for ADP. Rs. 600 million are allocated to Benazir Income Support

program and Rs. 700 million for education scholarships. The expenditure is Rs. 83.4 billion.

Budget of Gilgit-Baltistan:
A budget of Rs. 12.98 billion was presented by Finance Minister of Muhammad Ali Akhter. A Rs. 6.40 billion are allocated to non-development programs and 50% increase in the salaries of govt. employees also introduced. Rs. 20 crore is also allocated for the people who suffered form leveling up of water in Hunza Lake.

Conclusion: