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Miftah announces budget 2018-19

Miftah announces budget 2018-19

The outgoing PML-N govern-ment’s newly appointed Finance Minister Miftah Ismail is presenting a sixth full-term budget in the National Assembly on Friday amid opposition protests calling for a budget covering only the remaining three months of the federal government’s tenure.

“This is a historic moment for the parliament that the 6th budget is being presented. A government cannot run for a day without the budget. The provincial government’s can-not decide their budgets with-out approval of the federal budget,” Ismail explained.

“We cannot interrupt the 5.8 per cent GDP growth. However the next government will have the right to make changes to the budget,” he assured the opposition. “Today’s budget is a reflection of Nawaz Sharif’s vision. We are missing him here today.”

“In 2013 the PML-N govern-ment came to power and set up a programme for the economy. We faced certain challenges under the leadership of Nawaz Sharif. Serving the public was our only motivation,” he added.

During Ismail’s address, members of the opposition con-tinued their protests through uninterrupted chanting. They surrounded his dias and threw papers in the air. Opposition members ripped apart copies of the budget while PML-N members encircled Ismail’s dias to keep the protesters at a distance.

The budget speech began with the finance minister recounting the government’s new tax package, through which it has lowered tax rates considerably.

Miftah announces budget 2018-19

Ismail said the government is using data mining and other technologies to catch tax thieves. “We have given people one last chance to declare their domestic assets. We will catch them and prosecute them if they do not avail our tax amnesty package,” he asserted.

“Due to high economic growth in the last five years, the size of the economy has increased unusually. It has risen from Rs22,385 billion in 2013 to Rs34,396 billion in 2018. The per capita income during this time has risen from Rs129,005 to Rs180,204,” Ismail announced.

The target GDP growth rate for the upcoming fiscal year has been set at 6.2pc against FY17-18’s target of 6pc. Agricultural production is slated to increase, Ismail said, with the government intending to continue implementing an agricultural policy in FY18-19 “until we end the tradition of subsidies”.

Loans to the agriculture sec-tor will increase to Rs1,100bn, he said. Rs4,435bn is the target tax revenue, Ismail said. An increase in the tax base is expected to contribute to a reduction in the tax rate. The government intends to restrict inflation to below 6pc, Ismail said.

The finance minister esti-mated forex reserves to come to about $15bn in FY18-19. The target tax to GDP ratio is 13.8pc, the target budget deficit 4.9pc and the target net public debt to GDP ratio 63.2pc, he announced. The 7th NFC award will have a reduced federal share, the minister said.

The government announced a Rs25bn special package for development in Karachi. A large-scale desalination plant will be set up in Karachi to end the city’s water woes, Ismail said.. Rs5bn will be allocated for the construction of roads, fire brigades and bridges in the coming fiscal year.

Rs5bn will be set aside for expansion of the Expo Centre, he added. “Today we are the 24th largest economy in the world,” Ismail told the lower house. “The GDP growth rate was 5.4pc last year — it has now grown to 5.8pc, the highest in 13 years,” he recalled. “In the last five years, infla-tion has been kept below 5pc which was up to 12pc when we took over.

The budget deficit will remain restricted to 5pc this year,” he said. “The State Bank policy rate was 5.7pc which was the lowest in decades, coming down from over 9pc. The lowest interest rate in history has brought an increase in businesses” he explained. “Exports have been under pressure… Imports have increased 17pc because of high machinery imports,” he said, adding that the current account deficit had increased Rs12bn in the first nine months of FY17-18.

“The government has made all efforts, and I am sure that foreign exchange reserves will be higher in June than they are today. In the ongoing year, for-eign investment has risen from $1.9bn to $2.1bn.” The opposition wants the government to present a budg-et only for one quarter, saying that the rulers cannot snatch the right of deciding a budget from the next government expected to come into power in August, after the general elec-tions.

“I understand the pain for democracy and Constitution,” said Prime Minister Shahid Khaqan Abbasi while address-ing the Parliament. “We want to present the budget for conti-nuity of the system. Whichever party comes can change the budget.” Addressing the opposition’s
reservation about Miftah Ismail, the newly appointed finance minister, presenting the budget, he said: “It is the cabinet’s decisions and noth-ing unconstitutional about this.”

At the outset of the session, Opposition Leader in the National Assembly Syed Khursheed Shah protested against the outgoing PML-N presenting a full-term budget instead for the remaining three months of its tenure. “Unfortunately, the govern-ment is snatching the right of the next assembly with today’s budget,” said Shah.

“My wish is that whichever party wins the elections, has the right to present the budget.” “This government has no ethical right to present the budget for the entire year.” “This mandate is given when a person comes into Parliament after being elect-ed,” he continued.

“What pains me is that Nawaz Sharif champions the narrative ‘vote ko izzat do’ [respect the vote], yet you [PML-N] are destroying the honour of vote.” “You had an elected minis-ter, Rana Afzal, but you brought in a person with no mandate through wrong inter-pretation of the Constitution,” said Shah referring to the appointment of Miftah Ismail as the finance minister on Friday morning.

“I always say respect the Parliament and make it supreme; but once again, you are making decisions outside the Parliament. This is the first time an un-elected person is presenting the budget.” “Could PM Abbasi not have presented the budget? Even the chief minister has present-ed budget in the past,” pointed out Shah.

Shah Mehmood Qureshi of Pakistan Tehreek-i-Insaf (PTI) shared the same sentiments as Shah, saying: “Instead of an elected minister, you [PML-N] are giving the mandate to pres-ent the budget to an un-elected person.”

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