Finance czar Ishaq Dar presents Rs14.46tr budget, with deficit target of 6.54%

Finance Minister Ishaq Dar presented Rs14.46 trillion ($50.45 billion) worth of budget in the National Assembly on Friday. The government will target a budget deficit of 6.54% (Rs7.57 trillion) of economic output in the fiscal year starting on July 1, he said, slightly below the current year's revised estimate of 7%.

"The government has prepared a responsible budget, not an election budget," he said on the floor of the house.

The ruling alliance has planned to meet its expenses through taxes, internal borrowings, and more than $2 billion from the IMF under the loan programme.

He started his speech by blaming the PTI, the Ukraine war, and the 2022 flash floods for the country's financial woes. Prime Minister Shehbaz Sharif, Defence Minister Khawaja Asif, and other federal cabinet members were present in the august house.

The deficit target for the fiscal year ending this month had been revised higher, from a previous projection of 4.9%.

The budget needs to satisfy the IMF to secure the release of stuck bailout money for the crisis-struck country, which is due to hold a general election by November.

Around Rs1.8 trillion – out of the total Rs14.46 trillion – would go to defence. It would target debt servicing of Rs7.3 trillion.

Agriculture

IT and freelancers

Metal

Concessions for overseas Pakistanis

Construction

Education

Sports

Women empowerment

Youth

BISP

USC

Pakistan Baitul Mal

Solar panels

Health insurance for journalists, media workers

Below is the list of products on which duty has been kept at zero

Parts of Lithium Batteries

Solar PV Modules Panels manufacturing machinery and equipment

Lithium-ion batteries manufacturing machinery and equipment

Solar Inverters manufacturing machinery and equipment

Medicines

Following IT Related Equipment

Imports exempted from duty

Products exempted from Sales Tax

Reduced duty on imported items

Dar reiterated that the government hoped to get an agreement with the IMF soon, echoing comments made earlier in the day by Prime Minister Shehbaz Sharif as he addressed his cabinet.

Shehbaz's government is hoping to persuade the IMF to unlock at least some of the $2.5 billion left in a $6.5 billion programme that Pakistan entered in 2019 and which expires at the end of this month as the country deals with a series of economic and political crises.

The budget would target total tax revenue of Rs9.2 trillion, said Dar, who added there would be no new tax on the industrial sector. The government has targeted total non-tax revenue of Rs3 trillion for 2023/24.

Inflation for the next fiscal year is expected to come in at 21%, the finance czar said.

The finance czar alleged that the PTI government laid "minefields" – a term also used by his predecessor Miftah Ismail for the petrol subsidies announced by ex-PM Khan before leaving office – by giving subsidies on electricity and petrol in violation of the IMF agreement.

The people should realise who damaged the country and saved the country, Dar said as he put all the blame on the PTI.

"Rs5 trillion debt was taken before PTI took over and Rs49 trillion was by the time PTI left," he said, "The debt increased by 98% in PTI tenure." He added that God saved Pakistan from going default.

"We did not care for political loss in trying to save Pakistan from default. People must see who saved Pakistan from default and who pushed Pakistan towards it," Dar said.

He demanded that people who attacked military installations on May 9 – the day when violent protests turned up in the wake of Imran Khan's arrest – should be held accountable for their actions.

"People like these are not worthy of mercy."

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