Pakistan deals with budget woes
The total budget is Rs6 trillion as officials try to get the nation’s budget woes under control. The deficit amounts to Rs3.56 trillion, according to Gulf News.
Minister of State for Revenue Hammad Azhar told the National Assembly that the nation’s debt now stands at a staggering Rs31 trillion due to high-interest loans taken out by the previous administration, according to Pakistan Today. Pakistan’s foreign exchange reserves dipped under $10 billion, and its current account deficit is at $20 billion. The nation’s trade deficit reached $32 billion.
Officials have been tasked with dealing with the nation’s budget problems as conditions of the bailout package from the International Monetary Fund. The current account deficit is expected to fall to 6.5% in fiscal 2019-2010. They also plan to enhance exports by adjusting the duty structure and will slash electricity and gas rates.
The Pakistan budget for 2019 – 2020 also calls for a Rs5.5 trillion increase in tax revenue but no increase in the general sales tax. According to Reuters, one challenge facing the South Asian nation is the fact that only 1.8 million Pakistanis file income tax returns—out of a population of about 208 million.
Major changes in the Pakistan budget for 2019
Geo News reports that the Pakistan budget for 2019 – 2020 includes a 10% salary increase for Grade 1-16 government employees, which includes military employees. Grade 17 to 20 government employees will receive 5% ad hoc relief, while Grade 21 and 22 civilian government employees will not see any pay increase.
All ministers have voluntarily agreed to take a 10% cut in their salaries, including the prime minister. Government employees will also see a 10% increase in their pensions, and officials set the minimum wage at Rs17,500.
Officials have allocated Rs1.863 trillion of the Pakistan budget for 2019 – 2020 to the Public Sector Development Programme. Rs951 billion has been set aside for federal divisions and ministries, and Rs912 billion has been allocated to the provinces, reports Geo TV. The National Economic Council approved these allocations late last month.
Defense budget stays the same
Multiple news outlets also report that the defense budget will remain the same at Rs1.15 trillion for 2019 – 2020. Officials did say that this won’t affect the nation’s ability to respond to threats. This also isn’t a huge surprise, given that Prime Minister Imran Khan had already said the defense budget would not increase for the next fiscal year, according to Outlook India. Officials said they made the decision as part of their larger efforts to deal with the nation’s financial woes.
In 2018, Pakistan’s defense budget ranked in twentieth place of all the nations’ defense budgets, the Stockholm International Peace Research Institute reported earlier this year.