Pakistan Announces Rs. 2.96 Trillion Budget For 2012-2013

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Pakistan Announces Rs. 2.96 Trillion Budget For 2012-2013

Pakistan’s government has unveiled its budget for the coming year. The plan includes outlays of Rs 2.96 trillion. The budget was announced earlier today by Finance Minister Dr. Abdul Hafeez Sheikh. Opposition parties protested the proposal as they were read out. The budget was agreed upon and passed by the country’s cabinet earlier today.

The revenue target for the year is Rs 25.04 trillion. That leaves the state incurring a deficit of 4.7%. The deficit is incurred as the government introduced a great deal of increased spending while  reducing taxes in general.

The finance minister wore earplugs during the proceedings as members of the opposition party PML-N encircled him and protested the budget loudly. Some violence broke out between members of the ruling PPP and opposition PML-N during Dr. Sheikh speech.

The government announced no new taxes for the coming year. Expenditure increases include a raise of 20% for government employees. The government has set an inflation target of 9.5% for the coming year.

Other expenditure increases included an increase of Rs 20 billion for the military in total. By sector the Navy will receive Rs 52.7 billion and the Air Force will get Rs 114 billion. the entire defense sector will receive 264 billion in the coming year.

The budget included a host of measures that reduced taxes and reduced the reach of taxes. The minimum tax rate was increased to Rs 400,000. The duty on raw materials for certain medicines was reduced from 10% to 5%. There was also a reduction in the sales tax on imports. It has fallen from 22.5% to 19%.

The government dedicated Rs 873 billion for the national development plan and Rs 360 billion for the Public Sector Development.

Despite the huge amount of changes introduced in the budget the entire proceedings were completely overshadowed by the protests of the opposition. The opposition member of parliament are angry about recent power cuts in the country and corruption among the governments current politicians.

Some of the slogans chanted by the opposition protesters were “the corrupt rulers should quit”, “people want water electricity and gas” and “respect the constitution”. These, and others, were repeated loudly by the 25-30 members of parliament that surrounded the finance minister as he read his budget.

It was made clear earlier in the week that Pakistan had missed its growth targets for the current fiscal year. The target had been set at 4.2% while the country only managed a 3.7% growth in GDP.

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