Pakistan’s New Budget, FATA, KP, Baluchistan Overlooked?

Posted June 3rd, 2014 at 7:34 pm (UTC+0)
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By Iftikhar Hussain

Pakistan’s budget for the year 2014-15 is an ambitious one and full of promises as usual. If one takes Finance Minister Ishaq Dar on his words that said in his budget speak in Parliament on Tuesday, Pakistan will be a beautiful place and most of its problems would be gone by next year. A deficit budget, with the economic jugglery apart, was missing many things especially for the common man and the peripheries – FATA, KP and Baluchistan. The budget reflecting an industrial mindset targets big infrastructure projects, increase in industrial output supported by high energy sector spending to power the manufacturing sector. Defense spending dominates the annual allocations and agriculture, education, health and human development remains ignored as usual.

Main outlays of the budget/defense’s lion share: The total outlay of the budget is Rs 3.945 trillion and a Public Sector Development Program allocated at Rs 525 billion. Defense allocations are Rs 700 billion increased by 11 percent as compared to Rs 635 billion the previous year. The health allocations are 26.8 billion while the education outlay still remains meagre, under two percent. The government, though, has commitment to make it five percent by 2018.  Defense traditionally takes the lion’s share in the budget of this developing nation with meagre resources where critics say there is no civilian audit of where and how the military spends its huge share. Critics say on top of the annual allocations, Pakistan military aid like the millions of dollars paid under the US coalition support funds remains untracked.

For a common Pakistani what does the budget means/Cheap & expensive items in the budget: The budget proposes tax cuts on construction machinery, fertilizers, medicines, booking charges for wedding halls, cellular phones calls and registration fees for non-governmental organizations.  The budget also puts no additional taxes on meat and beef, milk, creams other dairy products. The impact of his has yet to be seen.

Agriculture and small loans for farmers: The budget says that to encourage use of tractors by the growers it is proposed that the sales tax is reduced by 10 percent. Government has increased credit availability to agriculture sector from a targeted Rs 315 billion to Rs 380 billion, Dar adds. The State Bank has now decided to enhance overall credit to Rs500 billion for the year 2014-15.

Job creation: Signature program and promoted as engine for the new jobs growth is the introduction of 3G and 4G technology in the country and the budget says it will create 900,000 jobs in the country. The details and breakdown is unavailable.

Salaries, pensions and minimum wage: The PMLN government has promised in the budget to raise the minimum wage form 10,000 to 12,000 and keep pension 6,000 at minimum monthly. Federal employees’ salaries been raised by 10 percent but given the two digit inflation in the country the raise would hardly make any difference for the salaried class.

Punjab Vs Peripheries: The only specific announcement the war-hit people of KP, FATA and Baluchistan heard in the budget speech was the exemption of machinery and tax breaks for fruits plants in a region where the already more than 80 percent of the existing industry has closed down or sick due to the prevailing law and order situation. On the contrary, if power subsidy cuts are implemented, Baluchistan farming would suffer and Pakistan would have to lose 60 percent of the apple production to say the least just as an example. Experts say PMLN government usually champions mega project for political reasons and the budget has allocations of Rs 30 billion for a 1186 KM highway from Lahore to Karachi.

Critics accuse PML_N government of overlooking the financial troubles of smaller provinces and focusing more on Punjab, its political power base. A central government can mitigate economic worries of smaller provinces through its budget but has Prime Minister Nawaz Sharif’s government taken care of them, is likely to be raised by opposition lawmakers when they get the chance to speak on the budget.



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