Shaukat Tarin unveils budget for FY2021-22 in National Assembly

Finance Minister Shaukat Tarin on Friday presented the budget for the fiscal year 2021-2022 in the National Assembly amid a chaotic environment as members of the Oppositions continued to chant slogans to interrupt his speech.

The session, which began at 4pm, provided an insight into the government’s estimated expenditures, revenues, and how it aims to allocate funds for vital sectors of the economy.

Despite the ruckus, the minister continued his speech uninterruptedly and said that the volume of the federal budget has been set at Rs8.5 trillion.

He said that Prime Minister Imran Khan does not shy away from taking difficult decisions for the sake of the country.

"The current account deficit of Rs 20 billion was converted to a surplus in April 2021, thanks to PM Khan's sound economic policies," Tarin said.

Criticising the previous governments,  the minister said that the PTI-led government had to inherit a "mountain of circular debt amounting to Rs1 trillion" after coming to power, adding that the debt was accumulated due to botched policies. 

"We made the [capacity] payments otherwise the country would have become a defaulter," Tarin said. "I am presenting you the real picture of the nation and to highlight our performance," added the minister. 

The minister paid tribute to the PTI government for controlling the spread of the coronavirus pandemic and taking steps to ensure businesses did not suffer massive losses in the country due to the lockdowns.

"The government, through the Ehsaas Emergency Cash Programme, provided cash to 12mn people across the country," he said.

Tarin said remittances had increased in Pakistan to record levels, adding that these are expected to rise to $29bn by the end of this month.

"This is proof of the love that overseas Pakistanis harbour for Prime Minister Imran Khan," he said.

Tarin said the economy had grown and as a result, more people had secured jobs over the years. The finance minister said that despite the coronavirus pandemic, the per capita income had increased by 15%.

Speaking about tax collection, he said it has grown by 18% and had crossed Rs4,000bn, adding that critics had no response to the government's impressive performance in this regard. 

The finance minister announced that the PTI government has steered the country towards a growth period, adding that almost every sector has seen a boost. 

"Pakistan is witnessing a historic growth in the agricultural sector  and apart from cotton, all other crops saw extraordinary increases."

He said that growth in the services sector helped improve numbers pertaining to poverty and had also played a major part in the generation of wealth in Pakistan.

Tarin said Pakistan had become a food deficient nation, thanks to the policies of the previous governments. "We will have to become a food sufficient nation and for this, we will have to provide lots of incentives to farmers," he said.

"We will need to bring back administrative controls which were removed during the Musharraf era," he added.

Tarin said the government had kept the growth target at 4.8% for the fiscal year, adding that the government will not leave the poor and the destitute at the mercy of inflation.

"Never in our economic history, were poor people able to realise their dreams," he said, adding that PM Imran Khan wanted to uplift the poor. 

He said the government had decided to provide interest-free loans of up to Rs500,000 to the poor.

Speaking about the importance of boosting exports so Pakistan can earn foreign exchange, the finance minister said the government was focused on the creation of economic zones to facilitate industries, create jobs and boost exports.

The minister announced that Pakistan has introduced mortgage financing for the first time ever, adding that the passing of the foreclosure law had enabled banks to start lending to people.

He announced that the Public Sector Development Programme will be increased from Rs630 billion to Rs900 billion to counter the adverse impact of the coronavirus pandemic.

The finance minister is interrupted by Speaker Asad Qaiser as he urges Opposition lawmakers to observe silence and the women MNAs in the Parliament to sit down.

"I would request all members to remain in their seats," he said, as the Opposition lawmakers continued to thump their desks and shout slogans against the government.

Tarin announced a development package for 14 districts in Sindh, adding that these will focus on improving education, solving the province's water issues and carrying out development in these districts. 

The minister announced that the government has slashed sales tax on locally manufactured cars from 17% to 12.5%.

He announced the government's initiative to earmark $1.1bn to procure coronavirus vaccines, adding that the government aimed to vaccinate 100mn people by July 2022.

Tarin said the government was introducing third-party audits which would thwart the FBR harassing any individual or business entity. He said those who are found guilty of evading taxes or deliberately hiding their income will be fined severely.

"The rich will be asked to pay taxes in accordance with their wealth," he said, adding that the salaries class will not be burdened with additional taxes. 

The finance minister said the track-and-trace systems will be strengthened so that undocumented trade does not flourish in the country.

Tarin said the government was slashing withholding taxes on mobile phones, adding that it will be reduced to 10% at first and then 8% later. 

He said the government was intent on eliminating the menace of corruption, adding that Pakistan Customs was focused on curbing the sale of illegal trade.

"The western borders of the country and the coastal strips should be made safe so that these practices end," he said.

The National Assembly session has been adjourned to meet again on Monday, June 14, at 4pm.

Tarin presents Economic Survey 2021

Presenting the Economic Survey of Pakistan 2021 yesterday, Finance Minister Shaukat Tarin had said the government plans to boost agriculture as Pakistan was now heading towards a direction that would enable it to become a food exporter, as opposed to a net food importer, which it had become now.

To achieve this, the finance minister revealed that the government had planned to introduce commodity warehousing and cold storages to diminish the role of the middlemen. In this way, he said, the government will be able to put a check on profiteering and be able to build strategic reserves to counter speculative and market fixing behaviours.

The minister had stressed the importance of sustainable growth, saying that the country’s burgeoning young population needed two million jobs per year, and without growth, it was impossible to create employment on such a massive scale.

Tarin had stressed that unfortunately, commercial banks do not lend to the poor in Pakistan. He said due to this, wealth was not being redistributed in Pakistan which was crushing the poor under financial burden.

The finance minister said since had a profound knowledge of the country’s banking system, he will use that experience to show commercial banks how to provide loans to the bottom 4-6mn people in the country and help them realise their dreams.

Speaking about the importance of the small-and-medium enterprises (SMEs), Tarin said it was unfortunate they were provided only 6% of the banking credit. In Budget 2021-22, he promised to prioritise funding for SMEs as well.

“Exports, exports, exports,” the finance minister had stressed yesterday, saying that Pakistan will provide incentives to enhance not only its traditional but also non-traditional exports. We have to earn dollars and until we do so, how can we repay back our debt?” he had asked.