Pak Parliament adopts Rs 9.5 trillion budget

Islamabad, Jun 29 (PTI) The lower house of Pakistan Parliament on Wednesday adopted the Rs 9.5 trillion Finance Bill 2022, commonly known as the federal budget, with a majority vote, bringing the cash-starved country closer to fulfilling the IMF’s requirement for the revival of the much-needed loan programme.

Minister of State for Finance and Revenue Dr Aisha Ghous Pasha presented the budget for voting and said that 80 per cent of the amendments were directly related to taxes.

“Our aim is to tax the rich and to give relief to the poor,” she said.

There was virtually no opposition due to the absence of lawmakers from ousted prime minister Imran Khan’s Pakistan Tehreek-e-Insaf party, as the bill was taken up clause-by-clause by the National Assembly and passed with a simple yes vote.

The budget with an outlay of Rs 9.5 trillion was presented by Finance Minister Miftah Ismail on June 10 and it was followed by a debate in the house.

But changes were made under the International Monetary Fund (IMF) pressure when the tax target was revised upwards. The house, while approving the budget, also gave a nod to impose a Rs 50 levy on petroleum products as was agreed with the IMF.

The formal approval of the budget brings the government closer to the revival of the stalled International Monetary Fund (IMF) programme.

The government presented the budget for the fiscal year 2022-23 on June 10 with a fiscal adjustment of Rs 1.25 trillion, but the IMF did not accept it, leaving Pakistan with no other choice but to make further amendments.

Then on June 24, Finance Minister Ismail announced additional taxes that are expected to generate Rs 466 billion, which helped the government reach an understanding with the IMF for the bailout package.

The budget documents show that debt servicing accounted for 45.4 per cent of the total current expenditure, while the defence expenditure of Rs 1,523 billion made up 17.5 per cent of total current expenditure.

Pakistan announced on June 10 that it will allocate Rs 1,523 billion for defence, an increase of over 11 per cent from last year.

According to the budget documents, the government has committed Rs 1,523 billion for the defence of the country, higher than last year’s Rs 1,370 billion, which was later on revised to Rs 1,450 billion on the demand of the ministry of defence.

The powerful Pakistan Army, which has ruled the coup-prone country for more than half of its nearly 75 years of existence, has hitherto wielded considerable power in the matters of security and foreign policy.

Cash-starved Pakistan has faced growing economic challenges, with high inflation, sliding forex reserves, a widening current account deficit and a depreciating currency.

China has announced it will bail out Pakistan by providing USD 2.3 billion in assistance to prop up its fast-depleting foreign exchange reserves, months after Beijing rolled over a USD 4.5 billion loan for its all-weather ally facing growing economic challenges.

Chinese banks have agreed to refinance Pakistan with USD 2.3 billion worth of funds in a massive relief for the country to help it bolster its depleting foreign exchange reserves, Pakistan Finance Minister Miftah Ismail said early this month.

Pakistan is facing an uncertain economic situation due to a delay in the revival of a stalled multibillion-dollar International Monetary Fund (IMF) programme.

Saudi Arabia has also agreed to provide Pakistan with a “sizeable package” of around USD 8 billion to help the country revive its ailing economy. Saudi Arabia provided USD 3 billion deposits to the State Bank of Pakistan in December 2021 while the Saudi oil facility was operationalised from March 2022, providing Islamabad with USD 100 million to procure oil.

The Gulf country provided USD 3 billion deposits to the State Bank of Pakistan in December 2021 while the Saudi oil facility was operationalised from March 2022, providing Pakistan with USD 100 million to procure oil.