Following is the text of press note issued by Ministry of finance
1. As I rise to present the second budget of the democratic government, I want to thank Allah (SWT) for remarkable mercies He has bestowed on us by giving enormous success to the policies and initiatives we announced in our first budget. This success is the outcome of a democratic process that has allowed people to choose their representatives and they, in turn, are working to achieve their aspirations.
2. When we started our journey, we were facing the most daunting task of repairing a broken economy. We embarked on a very comprehensive agenda of economic reforms aimed to reinvigorate the economy, spur growth, maintain price stability, provide jobs to the youth and rebuild the key infrastructure of the country.
Today, with the blessings of Allah, I say in all humility that we have not only restored the health of the economy but have put it firmly on the path of stability and growth. I by no means, am claiming that we have achieved our highest goals, however, I can gratefully and with humility, inform this House that
We are far from our destination. Therefore, we have to continue to strive and move forward, so that we achieve the status and stature among the nation, which we deserve, given our abilities. This is a national agenda and we hope that in order to achieve this, both side of the Parliament shall guide and favour us with valuable suggestions.
Review of Economic Performance 2013-14
3. I would like to place before this august House the following key economic indicators, based largely on latest data, which point to an unmistakable revival of the economy:
(a) Economic Growth, which had averaged around 3% in the five years before our government, has been projected at 4.14%as per the revised estimates. This is the highest growth in the last six years;
(b) Per Capita Income, which stood at
(c) Industrial Sector, which grew by a meagre 1.37% during Jul-Feb last year, has registered a growth of 5.84%, aided by increased availability of electricity and better management of available gas supplies. This is also highest in the last six years;
(d) Inflation, which had averaged around 12% in the five years before our government, was recorded at 8.6% for Jul-May 2013-14, that too despite the fact that we had taken difficult decisions to raise taxes and rationalize energy prices;
(f) Fiscal deficit, which was registered at 5.5% during Jul-Apr 2012-13, has been brought down to only 4.0% for the same period this year. Here I would like to remind that in the revised estimates for 2012-13, we were told that the fiscal deficit will be 8.8%. We had taken office only a few days earlier but even then in the three weeks of
(g) Credit to Private Sector, which was registered at
(h) Exports were recorded at
(i) Imports were recorded at
(j) Remittances, which were recorded at
(k) Exchange Rate, which experienced some instability due to speculative activity and initially declining reserves due to heavy repayments due from previous IMF loan, has been successfully stabilized and significantly appreciated subsequently. The speculators had thought that government would sit idly while they play havoc with the dollar.
They had pushed the rate to approximately Rs.111on 3rd December, which was totally unacceptable, as it had no economic justification. While dealing sternly with them we have expended serious efforts to stabilize the reserves position and also improved the basic economic indicators. Since 3rdDecember 2013, the rupee has appreciated by 11%. It has been trading in the range of
(l) Foreign Exchange Reserves, which had declined to a precarious level when in
For reasons I will be alluding to in my speech, foreign exchange reserves of the country have entered safe territory and no longer pose any risk to the economy. Even though reserves at present stand at around
(m) Karachi Stock Exchange Index, which stood at 19,916 on
(n) Incorporation of New Companies, which was recorded at 3212 during Jul-Apr last year has increased to 3655 during the same period this year, showing an increase of 13.79%;
4. In addition to above, we have achieved certain results that have eluded the previous government for its five year term:
(a) Euro Bond: Every year, since 2007-08, a provision had been made to raise foreign exchange resources through the issuance of Euro Bonds, which were last issued in 2006 and each year either no efforts were made as performance of the economy did not warrant or once a team on the road shows aborted the attempt for lack of interest and demand for
After achieving economic stability we immediately embarked on raising resources from the international capital market. We had set a modest target of
Against our target of
(b) Resumption of Program Lending: For a long time, and largely due to failure to implement the previous IMF program the country was denied access to program lending both by
These loans, particularly the cheap financing from the
(c) Auction of Spectrum License: Another notable achievement of our government is the successful auction of radio spectrum license of 3G and 4G. This is again an area where budget provision of
Not only have we achieved our target price, through a built in incentive mechanism that prompted two of the four winners to make upfront payment of 100% price, we still have two more licenses that we will sell during the next fiscal year. All of this we have achieved with total transparency, competition and in full view of the world.
Those who have purchased these licenses are extremely bullish in their assessment of
(d) Revival of the Privatization Program: The privatization of public sector assets, based on strategic partnership or through divestment in the capital market, was one of the key reforms we had proposed in our Manifesto and duly reflected in the budget strategy announced last year.
This is again an area that lied dormant and unattended for last many years, as the previous government, despite making an announcement and short-listing 65 entities for this purpose, could not succeed. We have reinvigorated the program with considerable effort and injected new vigour in its execution, as per the program charted out by the previous government.
Before the close of the calendar year, we would be divesting government shares in HBL, UBL, ABL and partially increasing the public listing of PPL and OGDCL. We have also appointed financial advisers for various public sector corporations where we plan to establish strategic partnership with private sector investors. These are those corporations that are burdening the public sector resources by their constant bleeding.
The proposed strategic partnership will transform them into profitable organizations and remove their burden on the exchequer. Furthermore, besides bringing much needed foreign investment in the country, this process will help lowering the debt burden of the country and make more resources available for investing in the poverty reducing programs in accordance with the privatization law.
I would like to assure this House that while pursuing this program, our government will not let the interests of workers and employees of public sector corporations compromised. Their welfare and rights will be duly protected.
(e) Import of LNG: Yet an important area that eluded others has been the plan for import of LNG in the country. Our present supplies barely meet 50% of our demand. Import of LNG is critical for our industry, power sector and fertilizer production. We had invited private sector to invest in a terminal for receiving 200 MMCFD of LNG to be expanded to 400 MMCFD. We have succeeded in awarding, again through a transparent and competitive process, the work of building the terminal at the Port Qasim. The work on the terminal has started and within one year the flow of gas is likely to begin.
We have also rolled out the process of procuring 3.5 million tons of LNG from the international market, which is again done through a competitive process.
5. From what I have stated above, it can be seen that it is a picture of an economy that is not facing any threat of instability. It is in fact poised to take off toward a sustained path of growth. Investments are re-bounding, confidence is building and people are forming expectations of a better tomorrow. It is indeed the results of a consistent and credible policy regime that the government has fashioned and practiced.
6. You would recall that when presenting the first budget of the Government, I had outlined the vision that is guiding our economic policies. The six elements of the vision were:
(a) promotion of trade and investment and protection of economic sovereignty;
(b) making the private sector primary engine of economic development;
(c) public investment to cater for building a strong infrastructure of roads, highways, railways, ports, water, hydro-power and related infrastructure;
(d) equitable sharing of the burden of development by eliminating the culture of tax exemptions and concessions and recovering cost of public services to ensure their sustainable supplies;
(e) practicing austerity and frugality in public expenditures and containing them within the available resources; and, (f) protecting the weak and vulnerable segments of population both by insulating them from inflationary pressures as well as giving cash grants to mitigate the adverse impact of economic adjustment and reforms.
7. We have scrupulously followed the vision we have set out for the economy. In every aspect of the vision, we have acted as we promised.
The brief description of our performance, given above, and what will be highlighted later in this speech, exemplifies the faithfulness and seriousness with which we are working to realize this vision. This is a reflection of a responsible representative government that is answerable to Parliament and the people who have voted it to office. And as we move to the second year of our government, the new budget will continue to reflect the same spirit and commitment as embedded in this vision.
Main Elements of Budget Strategy
8. I would now like to draw your attention to the main elements of the budget strategy we are adopting for the next fiscal year.
(1) Reduction of fiscal deficit: We will continue to reduce the fiscal deficit still further from 5.8% of GDP to 4.9% of GDP;
(2) Raising Tax Revenues: Although I will give details in the second part of the speech, this reduction in deficit will be achieved through a combination of better tax collection and tight expenditure policy.
(3) Arresting Inflationary Pressures: We have successfully warded off the inflationary pressures that were inevitable due to difficult decisions we took in the first budget.
As I noted, inflation has been kept firmly in the single digit territory. We gave more than
i. Continued reduction in deficit;
ii. Borrowings from SBP were eliminated during this fiscal year and next year these will be further brought down.
iii. The shift toward foreign borrowings we have contracted carry an average cost of less than 5%, which is considerably lower than the domestic cost that is averaged more than 12%. This will save us
iv. Regular price monitoring is being undertaken with a view to ensure adequate supplies of all commodities and maintain stable prices.
Apart from the ECC that regularly reviews price situation, a price monitoring committee comprising all federal and provincial ministries and departments headed by Finance Minister also meets every two months for more coordinated approach toward maintaining price stability. Provincial Governments have established extensive networks of
These bazars provide additional avenues of purchasing essential items at considerably lower prices than those prevailing in the markets. Remedial measures are taken whenever shortage of an essential commodity is noticed. Tariff, taxation and trade policy instruments are used to stabilize supplies and prices by making appropriate adjustments in duties, sales tax and income tax.
(4) Continued Focus on Energy Crisis: The 4Es we have given in our Manifesto refer to economy, energy, education and extremism. Thus energy occupies a central position in our program. We had inherited an energy sector that was at brink of total collapse. Load shedding was running at 16 hours in urban and 20 hours in rural areas. A gigantic circular debt of more than
Critical projects, such as Neelum-Jehlum and Nandipur, were delayed or nearly abandoned due to sheer negligence. We were not deterred by the enormity of the challenges facing the sector as we realized that without fixing this sector no realistic hope of economic revival could be made. We settled the circular debt and freed up and added some 1700 MW in the national grid.
These initiatives have paid off as the provisional figures of national accounts show that the value-added in the power sector increased by 3.72% as against a negative growth of 16.33% last year. But more importantly, we are working on a comprehensive program to add more power, improve energy mix to reduce the need for tariff increase, attract private sector investment and invest in transmission and distribution system to improve the efficiency of the entire power sector. I will be mentioning these initiatives in the context of the development plan;
(5) Exports Promotion: An emerging challenge on the horizon is the growth in exports critically needed to support a stable balance of payments over the medium to long term. Since 200001, our exports have grown at the rate of 8% compared to a growth rate of 13% for imports, leading to a large trade gap in the country. During the same period, the export to GDP ratio has declined from 13% to 10% whereas the import to GDP ratio has increased from 15% to 19%.
This rising imbalance in the trade account has been significantly corrected by a remarkable growth in remittances, which have grown by nearly 25% during this period, with the result that our current account has been stable in recent years. Not surprisingly, the terms of trade for the country during this period have also continuously worsened, eroding competitiveness of our exports. This is not a satisfactory state of affairs. Our trade balance, largely due to lacklustre growth in exports, is not consistent with our economic potential.
There is no escape from facing the challenge of stemming the declining trend in country's export to GDP ratio by giving a big push to the exports and redirecting our energies for enabling our industry and agriculture to create an exportable surplus in the country. To this end, this budget will be laying the basic foundations for a major thrust on export promotion. I will announce a number of initiatives aimed at giving boost to our potential exports.
(6) Creating New Jobs: We need to create jobs to absorb the rising number of young men and women entering the job market. As I said previously, much of this activity has to take place in the private sector, as our primary job is to provide an enabling environment for the private sector to undertake investments. The 3G-4G technologies, successfully introduced by our government, will spur growth not only in rolling out this facility but enabling other users to improve productivity and efficiency in their operations.
A detailed study on the impact of 3G-4G technology on employment has estimated some 900,000 jobs will be created in the next four years. Investments are encouraged through other policies, most notably by reducing government borrowings and making more credit available for private investments. On our part, a major increase in development spending is planned during the year. PSDP will be increased from
There would be a significant acceleration in investment in the country in months and years ahead. For the first time in recent history of the country we are investing the fullest available development outlay of
We have broken this tradition. Those who have constantly criticized the government for slow development spending did not realize that the new government needed time to reset priorities in the development plan to ensure that such projects are undertaken that are consistent with the economic program of the government that enabled it to win the confidence of the people. We have done this and with that the pace of development spending has accelerated.
(8) Public Debt Management: The composition of public debt has witnessed major changes in past few years with increased reliance on short-term domestic debt owing to lower external debt inflows, which entails high rollover and refinancing risk. Besides, the effective cost and stock of external public debt increased due to rapid depreciation of Pak Rupee in the recent past. The present government has taken immediate corrective measures to manage its public debt portfolio effectively. Key elements of our debt management policy are:
- A Medium Term Debt Management Strategy (2014-18) has been developed to lengthen the maturity profile and reduce the refinancing risk along with sufficient provision of external inflows to relieve the pressure on domestic resources and to enable private sector to access more credit from the banking system;
- To broaden the investors' base and have a liquid government securities market, trading of Treasury Bills commenced on the stock exchanges. This has provided an additional investment channel to retail investors.
- The program loans received from multilateral/bilateral development partners during 2013-14 as well as financing raised from international capital market in the form of Euro Bond will not only assist in lengthening of maturity profile of public debt, there are also strong concessional element associated with these loans i.e. low cost and longer tenors. The annual cost saving on these loans, as mentioned earlier, is around
(9) Protecting the Poor: Reaching out to the poor is a major policy objective of our government. The main intervention we have designed for this purpose is the National Income Support Program (NISP) which consists of Prime Minister's Youth Program and Benazir Income Support Program. Of this BISP remains the biggest effort to help the poor through cash transfers. The following achievements have been made in this regard:-
i. In 2008, I was the one who made an allocation of
ii. Until 2012-13, the cash-transfer program was reaching out to 4.1 million families, which will have taken to 4.8 million during the current year. Next year we will be increasing the number of beneficiary families to 5.3 million, showing an increase of 29% since 2012-13;
iii. The monthly stipend under the program was initially set at
iv. Besides the above, an allocation of
v. We are proud of this support that we are providing to our vulnerable and young people. We owe it to them; it is their own resources that we are managing in trust and making sure that in their state of vulnerability we are there to help them. I would also like to emphasize that we are not promoting a culture of dependency for the poor.
We have adopted a methodology that constantly watches the economic state of recipients and there is a very structured process through which families are graduated from being recipients to become economically independent. This program is therefore a program only to help families under need and encourage them to gain a life that does not finally depend on such assistance.
(10) Strengthening Social Safety-net Programs: A large number of social safety-net programs are scattered across different ministries and departments and it is not evident if these programs are fully synergized with each other.
To strengthen these programs it has been decided to establish a high-powered
(11) Development and Promotion of ICT Sector:- The Government is fully cognizant of the importance of Information and Communication Technology and its potential role in trade, foreign direct investment, women empowerment, employment, education, national competitiveness and ultimately the economic growth. We are making adequate provisions in this budget for the development and promotion of the this vital sector, namely:
Â€¢ Establishment of Universal e-Telecentres: In order to improve public access to ICT services such as NADRA facilities, biometric verification devices for issuance of SIMs, e-facilitation in health, agriculture, commerce, governance, learning etc. and to generate local employment and entrepreneurial opportunities,
In the first phase, 500 Telecentres will be established in the four provinces and
Â€¢ Improved Connectivity of Remote Areas: This year USF shall invest another
Â€¢ Prime Minister's ICT Scholarship Program: This Program aims at providing the highest quality ICT education opportunities at top universities to the students belonging to rural and semi urban areas. This year,
Medium-term macroeconomic framework
9. As the in past, our budget strategy is embedded in a three year medium term macroeconomic framework, the main features of which are as follows:
(a) GDP growth to gradually rise to 7.1% by FY 2016-17.
(b) Inflation will be maintained in single digit throughout the medium term.
(c) Investment to GDP ratio will rise to 20% at the end of medium term.
(d) Fiscal deficit to be brought to down to 4% of GDP by 2015-16 and maintained at this level afterward.
(e) Tax to GDP ratio will be increased 13% by the year 2016-17
10. Encouraged by the performance in the first year in office, we are confident that these ambitious targets will be achieved with consistent and resolute determination to remain on-course on the path of reforms.
11. I would now present some highlights of the development budget, focusing mainly on the sectors that will contribute most to the economic development.
12. One of the greatest assets bestowed on this nation by the Almighty (SWT) is the abundance of water resources.
13. The most important sub-sector claiming resources in our development plan is the water sector, where we are investing
We have provided
Water projects in Baluchistan are the second most important focus of water sector investments comprising construction of delay action dams, flood dispersal structures, canals and small storage dams. Major focus is on completing the long delayed projects such as
Besides, numerous schemes of lining of water-courses will be undertaken in Khyber Pakhtunkhwa, Sindh and Punjab to reduce water wastage together with flood protection and drainage schemes all over the country. Moreover, new water sector projects are being initiated which include a series of small dams across Baluchistan and Khyber Pakhtunkhwa including
14. Another sub-sector that is getting our utmost attention is the power sector. Widespread power shortages have badly damaged our industrial sector and added to the sufferings of the common people. Prime Minister
We have taken a number of steps to address structural problems of the sector including reduction in system losses, improvement in recoveries, elimination of theft and settlement of inter corporate circular debt. However, our real focus is on developing additional resources of energy so as to permanently overcome the problem of shortages. Therefore, in keeping with last year's practice we have allocated the largest amount of resources to create more economical capacity in the country.
During the current year a sum of
15. Addition of a number of hydel projects, coal based plants, wind energy and nuclear projects will correct the energy mix to provide cheap electricity to the people of
17. Leaders have to see through the future. Prime Minister
Therefore, he launched his vision of a modern communication system, which could not be materialized due to negligence of a number of intervening governments. But we are picking up the pieces from where we left off and we intend to complete most of the North to South Corridor projects during the next four years.
Broadening his vision of connectivity the Prime Minister along with his Chinese counterpart has developed the vision of Pak-China Economic Corridor that would link Kashgar and Gawadar through both motorways and railways. It is not difficult to imagine the phenomenal economic development that would be engendered by such an epoch-making project. Various components of the project have been undertaken starting this year.
18. The premier project that would transform the south-north corridor, linking Sindh to Up-country through a rapid transit mode, is the 959 KM Karachi-Lahore motorway project for which
Construction work on 276 KM Lahore to Khanewal Section, 387 KM Multan to Sukkur Section, 296 KM Sukkur to Hyderabad Section and 136 KM Hyderabad to Karachi Section will start soon and will be undertaken on public-private partnership basis. It is estimated that the project will be completed before the term of the present government expires.
On the other hand, work on the remaining portions of 892 KM Gawadar-Ratodero Motorway has been expedited and the works on 200 KM long Gawadar-Turbat-Hoshab Section have been prioritized by meeting all its financial requirements. For northern connectivity, work on for construction of 460 KM Raikot-Havelian-Islamabad Section of the corridor will also be starting as well as for widening of the Khunjrab-Raikot Section of the
19. There are many more highway projects included in the development plan. This include184 Km Faisalabad-Khanewal Section and 57 KM Khanewal-Multan Section of M4. In addition, allocations have also been made for a number of crucial bridges and tunnels to open up unconnected areas. These include accelerated completion of Lowari-Tunnel,
20. In order to address the problem of urban congestion, allocations have been made in the current budget for the Peshawar Northern-Bypass,
21. This is an extensive program in the highways sector comprising 74 projects of motorways, highways, bridges, tunnels, and regional roads and a sum of about
22. Railways is supposed to provide cheaper, faster and convenient mode of passenger and freight transport. But despite inheriting a large railway network spread across
Railway was headed for near extinction when PML N took over last year. Marginalization of Railways was simply unacceptable to us because the world over, rail transport is regaining its lost glory as more investments are made and faster trains are built for both passenger and goods transport.
23. In the budget for 2014-15, Government has allocated amounts for doubling of track from Khanewal to Lalamusa, covering a major portion of the north-south mainline. Remaining tracks will also be doubled in coming years.
24. Similarly allocations have been made for rehabilitation of track from
25. Modern railways depend heavily on technology that increases efficiency and reduces accidents. However we have not upgraded our system to benefit from technological advancements. In the budget for the current year the Government has allocated significant amounts for mechanization of track maintenance, replacement and improvement of signalling system and provision of a centralized traffic control system.
27. Similarly around 1500 new wagons/bogeys are also being arranged.
28. In order to make
29. All these steps have been taken to revive the existing services of
30. Similarly urban railway is being introduced initially in
31. A path-breaking project of Islamabad-Murree-Muzzaffarabad Rail Link is being initiated and a new company with the name of
32. In this budget, we have allocated
33. People are the most precious resources of any nation. Therefore we consider the expenditures on human development as investments as they lay the foundation of future growth at an accelerated pace.
34. Initiatives that will be undertaken for the promotion of this sector are as follows:
(a) A sizeable allocation of
(b) Health sector service delivery has been fully devolved to the provincial governments. But the Federal Government is cognizant of its responsibilities to support the provinces in eradication of deadly diseases, regulation of the health sector and coordination to achieve the Millennium Development Goals (MDGs).
Therefore the current budget allocates
(c) Additionally the budget will also fund the Expanded Program of Immunization (EPI), National Maternal Neonatal and Child Health Program,
(d) Most importantly, funding for the provincial programs for population welfare has been kept at
35. Having stabilized the economy and announced a significant acceleration of investment program in the public sector let me turn to some special initiatives our government is announcing in order to meet the special needs of exports, in general, and textiles, in particular, commerce and industry, agriculture and housing. These sectors are central to economic development and there recent dormant performance has been a cause of concern. Accordingly, we have decided to give impetus to development in these sectors.
36. I had earlier highlighted the weaknesses in our exports performance that have emerged over the last decade. We must arrest this low exports growth and declining export to GDP ratio. The following measures are being adopted for promotion of exports:
(a) Setting up of
(b) Exports Refinance Facility (ERF): The Government, through the State Bank of
(c) Long Term Finance Facility: The Government, through the State Bank of
(d) Removing Anti-exports bias in Imports: A tariff rationalization program, being announced in the present budget, will gradually remove the anti-export bias in country's tariff policy and make exports more competitive.
(f) Establishment of
37. Textiles sector is the mainstay of country's exports as it accounts for more than half of country's exports. Its performance has been affected due to poor crops, delays in introduction of quality seeds and regulatory approvals for introduction of Bt cotton, widespread energy shortages, numerous local taxes and levies, high cost of finance and restricted trade regimes adopted by importing countries.
38. A meaningful export promotion policy will not be possible unless we provide the much-needed support for the development of this sector. Accordingly, the following package of support and incentives is provided for the textile sector:
(a) Draw-back for local taxes and levies to be given to exporters of textile products on FOB values of their enhanced exports if increased beyond 10% (over last year's exports) at the following rates:
o Garments 4%
o Made ups 2%; and
o Processed fabric 1%
(b) Mark up rate for Export Refinance Scheme of State Bank of
(c) The Expeditious Refund System is being improved and a fast track channel for manufacturers-cum-exporters is being created. I have already directed
(d) The textile sector value chain will be given protection as per the study carried out by
(e) Textile industry units in the value added sector would be provided Long Term Financing Facility (LTFF) for up gradation of technology from State Bank of
(f) Textile sector enjoyed duty free import of machinery under textile policy 2009-14. This facility will end on
(g) Use of Bt Cotton will be promoted by expediting regulatory approvals. To enable availability of quality seeds requisite amendments in Seed Act 1976 will be made and Plant Breeders' Right Act will be promulgate.
(h) A new vocation training program will be launched to train 120,000 men and women, over the five year period, for skills required in the textile sector, especially in the value added sector such as garments and made ups. The scheme will have following features;
Â€¢ Total Cost:
Â€¢ Monthly stipend of
Â€¢ 3 months training program
Â€¢ To be run through TEVTA institutes and textile industry
39. Agriculture occupies a central position in country's economy as besides contributing more than 21% to GDP it houses more than 65% of population and employs nearly 45% of our labour force. It has also great export potential but little has been done to this end, except a few token efforts to provide some support for transport of agriculture produce.
The key to improving agriculture productivity is access to seeds, water, credit, research and extension serves, markets and better pricing. Many of these responsibilities have been devolved to provinces and we are urging provinces to play their role in this regard. However, the federal government remains actively engaged with provinces in developing policies required for maintaining national food security and undertaking research in basic agriculture activities.
With a view to develop a national policy for the long-term sustainability of agriculture on profitable basis it has been decided to establish a
40. Within the areas where Federal Government can help the following package of incentives and support are being announced for the agriculture sector:
(a) Credit Guarantee Scheme for Small and Marginalized Farmers: The government is introducing Credit Guarantee Scheme in order to encourage banks for financing to unbanked small farmers. Government, through the State Bank of
(b) Reimbursement of Crop Loan Insurance Scheme (CLIS) Premium: Farming is one of the most vulnerable occupations in the face of natural calamities, climatic changes and plant diseases. In order to cover the risk to various crops the Government has introduced the crop loan insurance scheme for farmers with landholdings of 12.5 acres.
From this budget, the scope of CLIS premium reimbursement is being enhanced up to 25 acres. All farmers obtaining loans for production of 5 major crops are eligible to benefit from this scheme. 700,000 farmers households/families will benefit from this scheme. Total budget cost of the scheme is
(c) Livestock Insurance Scheme:
(d) Reduction in Sales Taxes on Tractors: The previous government levied sales tax on tractors which w.e.f.
(e) Establishment of Commodity Warehouses/Receipt Financing Mechanism: In order to develop a mechanism for establishment of quality warehouses, silos, cold storages and cold chains, and linking it to finance through warehouse receipt system, the Government, through the State Bank of
This scheme will cover all existing or new warehouses, silos and cold storage for farmers, aggregators, traders and other value chain players. Under the scheme,
(f) Agriculture Credit: Credit to agriculture is critical for enhancing famers' productivity. We are conscious of the difficulties faced by the farmers in getting credit through the loan sharks. During the year, our Government has increased credit availability to agriculture sector from a targeted
(g) Incentives for
To encourage establishment of processing units at such places, Government is introducing a policy to support processing projects in Makran, Gilgit-Baltistan,
(h) Airfreight Subsidy: Government has also decided to provide 50% airfreight subsidy for horticulture produce from Gilgit-Baltistan.
41. Housing is a basic need of the human beings and the government owes it to its people to facilitate provision of housing in the country. The following initiatives are being planned to promote housing sector in the country:
(a) Low Cost Housing Guarantee Scheme: The government has specially designed a program to provide housing credit to low cost housing units to enable the poor to have their own houses. Banks will provide loans of up to
(c) Revival and Restructuring of HBFC:
Immediate formation of Board of Directors;
Improvements in efficiency and capacity;
Simplification of procedures;
Major drive to recover non-performing loans.
Provision of new resources;
(d) PM Low Cost Housing Scheme: In addition to above, a provision of
42. Prime Minister's Health Insurance Scheme: At present, only a quarter of population in
Urgent corrective measures warranted to rectify this situation. Accordingly, with the involvement of provincial governments an insurance scheme is being designed that will help the poorest segments of population obtain health insurance for tertiary care and special diseases, if the provincial governments provide the coverage for the primary and secondary care. A provision of
43. In the past, an effort was made to establish the forum of
44. We have revived the efforts to promote Islamic banking and financial system in the country. A Committee has been constituted for this purpose comprising prominent Ulema, bankers, economists and government officials, which will finalize its recommendations by
45. Now I turn towards the estimates of revenues and expenditures for the next fiscal year.
46. Gross revenue receipts of the federal government for 2014-15 are estimated at
47. The share of provincial governments out of these taxes will be
Federal Government recognizes that the provincial governments have increased responsibilities of social sector service delivery under the new arrangements. Therefore, we have raised the level of provincial transfers over the last year from
48. Total expenditure for 2014-15, is budgeted at
This approach of gradually increasing the revenues and reducing the expenditure will make us self-reliant and sustainable. The current budget is estimated at
Budget deficit is considered as the main culprit behind economic instability as it leads to both infla
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