Introduction to Economic

Management
Project on:
Punjab Budget 2010-11
• Presented to: • Dr. Muhammad Yousaf Bhatti

• Presented by: • Muhammad Umer Khan

• Mirza Humayun Baig
• Sheikh Asjid Mansoor
• Qadir Bhatti

• Dated • 29th July 2010

Budget
• A Budget is a plan that outlines an organization's
financial and operational goals. So a budget may be
thought of as an action plan; planning a budget helps a
business allocate resources, evaluate performance, and
formulate plans.
• While planning a budget can occur at any time, for many
businesses, planning a budget is an annual task, where the
past year's budget is reviewed and budget projections are
made for the next three or even five years.
 
Importance of Budget
A budget is generally a list of all planned expenses
and revenues. It is a plan for saving and spending. A
budget is an important concept in microeconomics,
which uses a budget line to illustrate the trade-offs
between two or more goods. In other terms, a budget
is an organizational plan stated in monetary terms.
Outline of Budget 2010-11
Budget for financial year 2010-11 is being presented
in the backdrop of difficult and challenging security
situation; sluggish economic growth; persistent
inflationary trends; ever increasing resource
requirement for rehabilitation, improvement and
up gradation of existing infrastructure; a substantial
salary increase for public sector employees; a greater
demand and emphasis on the development and
implementation of social security net.etc.
Punjab Budget 2010-11:

The Punjab announced a record Rs 580.2 billion

budget for year 2010-11 on the strength of Rs 112.45
billion additional federal transfers over the previous
year; however, Rs 54 billion of this amount will be
consumed on raise given to the provincial employees
and pensioners.
• Punjab Finance Minister Tanveer Ashraf Kaira
presented the budget for the year 2010-11 in the
Punjab Assembly, which was the third budget of the
sitting coalition government.
• The current expenditures for the next year is
estimated at Rs 386.787 billion, which is Rs 68.243
billion higher than the revised estimates of current
year. The government has allocated Rs 193.5 billion
for the annual development program (ADP) against
the revised estimates of Rs 134.734 billion for current
year.
• The Punjab government employees have been given
an ad hoc increase of 50 per cent on their salaries
while the pensioners will get 15-20 per cent increase,
plus medical allowance of 25 per cent per month for
grade 1-15 and 15 per cent for grade 16 and above.

• Chief Minister Shahbaz Sharif had ordered curtailing

non-development expenditures and voluntarily
reduced the Chief Minister Secretariat expenses by
25 per cent from the next fiscal.
• The Police again got loin’s share in the budget as its
allocation had been increased by 13 per cent from Rs
43.27 billion in 2009-10 to Rs 49.20 in 2010-11.
• The education budget has been increased from Rs
21.503 billion in 2009-010 to Rs 28.885 billion for
next year.
• The Punjab government has allocated Rs 1.96 billion
for Information Technology. The number of seats in
the engineering colleges is being increased by 300
from next fiscal that would be increased to 1,200 in
the next four years.
• The pro-poor subsidies have been increased from Rs
15 billion to Rs 21 billion, out of which Rs 13 billion
would be spent on wheat subsidy and Rs 5 billion on
Sasti Roti scheme
• Four new medical colleges would start in Punjab in
2010-11.
• The Punjab government has earmarked Rs6 billion
for the provision of free medicines to the patients at
all Tehsil and district headquarters hospitals.
• The government has earmarked Rs 2 billion for
Rescue 1122. The Rescue 1122 service will be made
available in all Tehsil headquarters in 2010-11.
Problems of Punjab budget:

• 50 percent ad hoc allowance of basic salaries to be

granted to government employees.
• GST raised from 16 to 17 percent.
• Salaries of government employees raised by 50 percent.
• Federal Cabinet cut down its salaries by 10 percent.
• Rs 1 CED imposed on manufacturing of each cigarette.
• The defense budget is set at 442.2 billion rupees, a
17percent increase from last year.
• The debt to GDP ratio has climbed to 55 percent and ‘we
must protect the poor’.
• Jobs are created when the whole economy grows.
• Development spending or the public sector
development spending is targeted at 663 billion
rupees, with 373 billion rupees allocated for
provinces.
• Inflation is targeted at 9.5 percent in 2010/11 fiscal
year, down from the central bank's forecast of
between 11.5percent and 12.5 percent for the year
ending June 30.
• 685 billion budget deficit, which is 4 percent of
GDP.etc
Division of Punjab budget:

• Rs.663bn allocated in PSDP-2010-11

-Total amount of Rs. 663 billion has been allocated
in Public Sector Development Program (PSDP)-
2010-11 for various ongoing and new schemes.
- Out of total PSDP, the federal share is Rs. 280
billion, provincial share Rs.373 billion where as
Rs.10 billion would be spent for Reconstruction and
Rehabilitation of Earthquake-hit areas.
Main allocations:
-Rs.28423.8 million for Water and Power Division (Water Sector) 
- Rs.15227.5 million for Pakistan Atomic Energy Commission. 
- Rs.14565.7 million for Finance Division.
- Rs.13629.6 million for Railways Division.
- Rs.9395.7 million for Planning and Development Division.
- Rs.15762.5 million for Higher Education Commission.
- Rs.16944.5 million for Health Division.
- Rs.10873.7 million for Food and Agriculture Division.
- Rs.3220.1 million for Industries and Production division.
- Rs.5140.9 million for Education Division.
- Rs.5584 million for Interior Division.
- Rs.3887.1 million for Defense Division.
- Rs.3618.3 million for Housing and Works Division.
- Rs.3618.7 million for Cabinet Division.
- Rs.4115.5 million for Population Welfare Division.
Other allocations are:
• Science and Technological research.
• Livestock and Dairy Development.
• Law and Justice.
• Revenue.
• Petroleum and Natural Resources.
• Information Technology and Telecom.
• Commerce.
• Ports and Shipping.
• Pakistan Nuclear Regulatory Authority.
• Social Welfare and Special Education.
• Ministry of Foreign Affairs. etc
Tax:
Salient feature for the budget 2010-11 income tax:
• In order to provide relief to large number of
taxpayers deriving their incomes from Salary and
business.
• For welfare of industrial & commercial consumers of
electricity, the maximum rate of advance tax
deductible under section 235 on monthly electricity
bills is proposed to be reduced from 10% to 5%.
• The Senior Citizens of the age of 60 years or more,
are proposed to be eligible for relief of 50% of tax on
their income, if their income does not exceed
Rs.100,000/-
No new tax in Punjab budget:
Provincial Finance Minister Tanvir Ashraf Kaira in
his budget speech termed the budget as ‘tax-free,
balanced, public friendly and development oriented
According to the budget document, the general
revenue receipts for the fiscal year 2010-11 have
been estimated at Rs 558.38 billion with a revenue
expenditure of Rs 386.78 billion while the net
revenue expenditure is given as Rs 365.78 billion’.
• Another Rs 21 billion allocation has been made for
pro-poor subsidies.
• The government has also estimated Rs 171 billion net
revenue surplus for the forthcoming fiscal year.
• The provincial non-tax revenue, including hydel
electricity profit, would contribute Rs 22.195 billion
in the general revenue receipts.
Agriculture in Punjab:
• Among fruits, mango accounts for 66%, citrus more
than 95%, guava 82% and dates 34% of total national
production of these fruits.
Mission

• A system aiming to sustain food security and support

to national economy, making agriculture cost
effective and knowledge based, with emphasis on
farmers welfare and maintenance of the yield
potentials.
Objectives

• Ensuring food security

• Enhancing productivity through better varieties and
improved management practices
• Promoting high value crops, fruits and vegetables
• Promoting export of high value agricultural products
• Promoting efficient use of water and other inputs
• Improving soil health
• Development of culturable waste lands
• Ensuring fair returns for the growers in marketing of
their produce