National Assembly approves Finance Bill 2014-15

ISLAMABAD: The National Assembly on Saturday approved the Finance Bill for fiscal year 2014-15 with total outlay of Rs 4.3 trillion, accepting some amendments moved by the government and rejecting all ones from the opposition benches.

Following nine-day discussion, the 149-page Finance Bill was moved by Minister for Finance Ishaq Dar that was passed by the House with majority in clause by clause reading. The passage of the Finance Bill has successfully brought to an end the budgetary process started on June 3 with the budget speech of the finance minister at the National Assembly.

The bill now will go to the President for assent who will sign it into law making it will be applicable from July 1 2014. The House echoed with desk thumping as the House passed the budget in presence of Prime Minister Muhammad Nawaz Sharif who also witnessed the budget s passage.

The Senate had made 133 recommendations out of those the government accepted 57 and were incorporated in the federal budget full or partially. Once signed into law, the bill will increase monthly stipend from Rs 1,000 to Rs 1,500 billion for those receiving income support and number of families for the Benazir Income Support programme will be increased from 4.1 million to 5.3 million.

The crop insurance will be increased to 25 acres and prices of fertilizers will be reduced by Rs 300 per bag. The bill will also help reduce GADC to Rs 100 on power zero on cement Rs 150 on general industry Rs 200 on captive power and zero on commercial sector.

The government will also impose uniformed income tax of 4 percent on first class air travel and reduce sales tax on solvent extractors from 17 to 16 percent. The government will withdraw the exemptions of Rs 103 billion under its endeavor for phased elimination of SROs aimed at favoring influential ones.

The Finance Bill also provides a special package of Rs 36 billion for all provinces out of that Balochsitan will get Rs 14 billion, Sindh Rs 8 billion, Khyber Pukhtunkhwa Rs 4 billion, FATA Rs 4 billion, AJK Rs 3 billion and Gilgit Baltistan Rs 2 billion.

As part of the budgetary approval, the House has also approved demands for grants worth Rs 2.6 trillion besides charged expenditures. Following the passage of the budget, the finance minister felicitated the National Assembly Senate and the whole nation on approval of the budget saying the government was committed to take the country to its bright future as per vision of founder of the nation Quid-e-Azam Muhammad Ali Jinnah.

He informed National Assembly that the country s foreign currency reserves had reached to US 14.2 billion. He said that due to its prudent policies the government had managed to cross 14 billion mark and in future it would continue taking steps for further improving foreign currency reserves.

KP cabinet approves 2014-15 budget proposals

PESHAWAR: The Khyber Pakhtunkhwa cabinet has approved 2014-15 budget proposals.

The budget will be presented during the provincial assembly session scheduled for 4:00 PM today (Sunday). The budget which is in excess of Rs400 billion will be presented by senior provincial minister and JI leader Siarjul Haq.

Rs139.70 billion has been allocated for annual development programme which includes Rs39.65 billion from the foreign development fund.

The budget allocation for education and health has also been increased in this year’s budget. Over Rs24.63 billion have been allocated for health while Rs79.92 billion have been allocated for education.

The provincial budget also includes the following projects: Peshawar mass transit, mobile hospitals, schools, highways, roads and bridges.

It is expected that the budget will also include a 15% pay raise for government employees.

Sindh cabinet approves 2014-15 budget proposals

KARACHI: The Sindh cabinet has approved the provincial budget proposals for fiscal year 2014-15.

The provincial cabinet meeting was chaired by Chief Minister Qaim Ali Shah.

The provincial budget has allocated 30 per cent for education. Sindh Education Minister Nisar Khuro said 4,000 students of class 4-10 will be provided a stipend of Rs2500-Rs3500.

Budget 2014-15 presented in NA

ISLAMABAD: Finance Minister Ishaq Dar is presenting the budget for the fiscal year 2014-15 with a total outlay of Rs3.945 trillion in the National Assembly.

Earlier, the budget was approved by the federal cabinet during a meeting chaired by Prime Minister Nawaz Sharif.

Budget Recommendations:

Rs15 billion earmarked for the construction of Diamer-Basha dam: Dar
Rs30 billion allocated for Karachi-Lahore Motorway
Rs26.8 billion allocated for Health sector
Rs63 billion allocated for Higher Education
Funds have been allocated for Karachi Circular Railway
500 locomotives will be added to Pakistan Railways
Rs77 billion has been earmarked for uplift schemes, salaries and pension in railway sector.
Rs525 billion allocated for public sector development
Rs118 billion allocated for Benazir Income Support Programme
Monthly stipend for Benazir Income Support Programme has been raised by Rs300 to 1500 per month.
Economic growth has reached 4.14 per cent
Inflation rate was 8.6 per cent in current fiscal year
Federal Excise Duty reduced from 19.5 to 18.5 per cent
Decrease in telephone service withholding tax from 15 to 14 per cent
10 per cent ad-hoc relief for government employees
Grade 1-15 officers to be provided Rs1,000 fixed medical allowance
Minimum wage increased from Rs10,000 to Rs11,000
Minimum pension raised from Rs5,000 to Rs6,000

NEC approves Rs1.310 trillion development budget for 2014-15

 

ISLAMABAD: The National Economic Council that met here on Thursday with the prime minister in the chair accorded approval to the country’s largest ever development budget of Rs1.310 trillion for 2014-15 with projected GDP growth of 5.1 percent and an inflation target of 8 percent, a senior official who was part of the meeting told The News.
The supreme economic body also approved the Pakistan Vision 2025 with the prime minister saying that this vision was our development roadmap and Pakistan would grow as this vision would ensure the best usage of our resources as was done by developed countries.

The NEC also approved allocations for the Diamer Bhasha Dam, Karachi Coastal Power Project, Dasu hydropower project, Neelum Jhelum hydropower project, Chashma NPP, Jamshoro power project, Tarbela Extension IV project, Nandipur power project, Chichon-ki-Malyan power project, Gomal Zam project, the Kurram Tangi Dam and Golan Gol hydropower project.

Citing the significant allocations for power projects, the prime minister commented that it showed the seriousness and commitment of the government towards alleviating power scarcity. The PM said that they had released Rs37 billion for the Diamer-Bhasha Dam in one calendar year in order to expedite the project.

Infrastructure projects including the Lahore-Karachi Motorway, Hasanabdal-Havelian-Mansehra Road project, Peshawar Northern Bypass, Raikot-Islamabad project, Gwadar Airport, Gwadar Free Economic Zone and the construction of jetty and infrastructure development at the Gadani Power Park also received approval of the NEC. A feasibility study for the construction of the Havelian-Raikot railway line was also approved. The PM said that the Rs53.5 billion was the land acquisition cost of the Lahore-Karachi Motorway of which Rs25.5 billion have already been released.

The Rs1.310 trillion development budget includes a federal development component of Rs525 billion and provincial component of Rs650 billion with Rs135 billion to be generated by Wapda, NTDC and Pepco for some vital projects, as against the consolidated development budget of Rs1.150 billion for the ongoing fiscal 2013-14.

However, the sources also said that the provincial chief ministers in the meeting said that as far as the provincial share of Rs650 billion in the development budget was concerned, it would have been better to first consult them as they would prefer to fix their development budget keeping in view their fiscal limits.

An amount of Rs40 has been allocated for the Pakistan Railways, Rs48 for nuclear energy, Rs 36 billion for the PM’s initiative for less developed areas that include allocation of Rs15 billion for Balochistan, Rs8 billion for Sindh, Rs4 billion for KPK, Rs3 billion for AJK, Rs4 billion for FATA and Rs2 billion for Gilgit-Baltistan.

The NEC approved allocation of Rs260 billion for the water and power sector (Rs166 billion for the power sector and Rs84 billion for the water sector), Rs1.5billion for MDGs and the community sector, Rs51 billion for education and health, Rs163 billion for transport and communication.

However, for the communication sector alone Rs113.576 billion has been allocated for the ongoing 57 schemes and Rs8.356 billion for new schemes in the communication sector. For the New Islamabad Airport, a new approach road worth Rs16 billion has been approved and an allocation of Rs10 billion for the next financial year and for the ongoing road project for the same airport, Rs2 billion allocation has been proposed.

The NEC also approved the projected GDP growth of 5.1 percent as had earlier been worked out by the National Account Committee (NAC) and then backed by the APCC. The projected target of GDP of 5.1 percent has been worked out keeping in view the projected growth of agriculture by 3.3 percent, industry by 6.8 percent and services by 5.2 percent. Nominal GDP is targeted to grow by 13.5 percent and GNP per capita is projected at Rs160,443.

However, the press release says, Ahsan Iqbal, Federal Minister for Planning, Development and Reform, outlined the seven pillars of Vision 2025 while briefing the NEC.

NEC allowed the Planning Commission to publish the details of this Summary in the form of a document titled “Pakistan Vision 2025” for public information and directed Ministries/Provinces/Special Areas and Public Sector agencies to make concerted efforts in coordination with the Ministry of Planning, Development and Reform to effectively implement the proposed Pakistan Vision 2025. Moreover, the Planning Commission was authorised for regular monitoring of progress to translate the Vision into reality through a Performance Delivery Unit against key performance indicators (KPIs) and approved the framework for the eleventh five year plan within the perspective of Vision 2025.

While discussing the development projects in Balochistan, the CM Balochistan pointed out the delay and corruption in the Quetta water supply scheme. He siad that Rs10 billion had been spent but on the ground there was no development. The prime minister directed to hold enquiry into the matter and fix the responsibility. He also asked CM Balochistan Dr Abdul Malik to monitor the projects himself.

The NEC also approved construction of a cancer hospital in Islamabad. The PM directed to prepare plan for constructing a cancer hospital in every provincial headquarters including Gilgit-Baltistan, AJK and FATA.

Senior minister Khyber Pakhtunkhwa Sirajul Haq raised the matter of the delay in the completion of the Lowari Tunnel project due to paucity of funds. The PM assured to look into the matter and directed to specify the required funds for completion of the project. He said that he would personally visit the project along with the governor and chief minister KPK to see the on-ground situation. The PM said that none of the development projects would be ignored. The PM also warned against delays in the projects.

Addressing the query of the governor KPK regarding development funds for Fata, the prime minister said that Fata needed special attention in our development strategy and the development funds for Fata would be rationalised.

Chief minister Balochistan raised the issue of funding of transmission lines for far flung areas, the issue of power shortages in Balochistan and water supply scheme for Gwadar. The PM said that nature had endowed Balochistan with vast resources of solar energy and we needed to tap this energy. He directed to prepare a feasibility for installing solar power panels in Balochistan. It would not only resolve the energy shortage but also provide affordable energy to locals, he added. Prime minister directed to plan the water supply scheme and assured funding by the federal government.

Muhammad Saleh Zaafir adds: While briefing the NEC, Federal Minister Professor Ahsan Iqbal outlined the seven pillars of Vision 2025 including putting people first, Developing Human and Social Capital, Achieving Sustained, Indigenous and Inclusive Growth, Governance, Institutional Reform and Modernisation of the Public Sector, Energy, Water and Food Security, Private Sector-Led Growth and Entrepreneurship, Developing a Competitive Knowledge Economy through Value Addition and Modernisation of Transportation Infrastructure and Greater Regional Connectivity.

Govt to get $10 billion in loans, grants in 2014-15

ISLAMABAD: The Nawaz Sharif government will receive the highest-ever foreign inflows in the shape of loans and grants of over $10 billion during 2014-15, The News has learnt.

Following the resumption of the World Bank and Asian Development Bank loans, as well as increased foreign loans and grants from bilateral creditors, the government is expecting foreign inflows of up to $10 billion against the estimates of $5.76 billion in the budget 2013-14.

“The net lending will stand at over Rs650 billion in the next budget as foreign inflows will cross the Rs1,000 billion mark and can touch Rs1,050 billion while repayment of loans in the shape of amortization will consume almost Rs400 billion,” said the official sources.

The finance ministry official claimed that the public debt would not surge despite obtaining heavy foreign loans as the government would retire its domestic debt proportionate to foreign loans. But there are certain risks as well because in case of revising downward the GDP growth, especially reduction in growth of Large Scale Manufacturing (LSM), the overall GDP growth might fall below four percent.

Then the debt-to-GDP ratio can go up instead of the official projected figures of bringing it down, said the sources.The official circles say the government is going to give a loud and clear message that there will be no more dependence on domestic banks to finance the budget deficit in a big way as had happened in the last five years when the increased demand of borrowing had resulted in a situation that the banks had started dictating terms knowing that the government had turned into a “desperate borrower”.

A senior official of the Finance Division confirmed to The News on Friday that Pakistan would become eligible for concessionary loan of $3 billion under the IDA-17 from July 1, 2014 and can get this amount within three year period. This funding, coupled with the ADB and IDB loans in the pipeline, will enable Islamabad to jack up its foreign assistance up to Rs1,000 billion against the envisaged estimates of Rs576 billion in the outgoing fiscal year.

In the budget 2013-14, the government had projected foreign inflows of Rs576 billion against the revised loan and grants figure of Rs243 billion in 2012-13.Interestingly, the foreign inflows in the first nine-month(July-Sept) period remained negative; Rs50 billion in the outgoing fiscal year as total foreign inflows stood at Rs196 billion against the repayment of loans to the tune of Rs246 billion in this period.

But the situation has changed altogether since April this year when first Saudi Arabia provided a gift of $1.5 billion in two installments and then Pakistan’s oversubscribed Eurobond fetched $2 billion in one go. The resumption of loans from the WB and ADB also helped the government to get another $1.5 to $2 billion into the national kitty.

The generous foreign inflow has increased the foreign currency reserves level to $13 billion and will touch $15 billion soon.In another important development, the finance ministry on Friday made changes in its fiscal operation for July-March period of the current fiscal year and disclosed that the budget deficit was 3.8 percent instead of the earlier released figures of 3.1 percent of the GDP for this period.

All this happened because of treatment of $1.5 billion from Saudi Arabia, as earlier the Finance Ministry had included it into the figures, resulting into fattening this head up to Rs157 billion for this period.

Now in its explanatory note on its website, the Finance Ministry states: “The high statistical discrepancy is due to the impact of a transfer receipt from a friendly country amounting to Rs157 billion which has been kept separately in an account Pakistan Development Fund. Without this, impact of statistical discrepancy would come to Rs14 billion which would imply a deficit of Rs969 billion i.e. approximately 3.8% of GDP which is significantly less than the last year’s deficit of 4.6% of GDP.”