Federal Budget 2015-2019
Budget Analysis
Lahore College for Women
University, Jhang Campus
7/20/20
Financial Management
Federal Budget 2015-2019
Lahore College for Women University,
Jhang Campus
Project
Federal Budget Comparison
2015-2019
Group: A
Rabbia Ijaz
1724106004
Sadia Sarfaraz 1724106005
Shanza Ahmad
1724106008
BBA 6th Semester
Session 2017-2021
Ma’am Iram Aziz
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
1
Federal Budget 2015-2019
Acknowledgement
Praise and thanks to ALLAH ALMIGHTY, the lord of universe who is
either of all knowledge and wisdom to mankind. We bow our head in
gratitude o almighty Allah who blessed us with the capability to complete
our project, which was challenge for us.
“We the group members would like to avail this opportunity to thank our
course instructor of Financial Management MA’AM IRAM AZIZ for
stimulating our creative abilities by assigning this project to us and for her
able guidance and useful suggestions, which helped us in completing our
project in time.
The report submitted today is a result of collective efforts. Writing this
report appeared to be a good experience for us. It added a lot to our
knowledge.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
2
Federal Budget 2015-2019
Table of Contents
Chapter no. 1 ......................................................................................................................................... 4
Budget analysis .................................................................................................................................. 4
Introduction ....................................................................................................................................... 4
The Importance of the Budget in the Public Sector .......................................................................... 4
Budget Classifications........................................................................................................................ 5
Revenue Classifications ................................................................................................................. 5
Expenditure Classifications ........................................................................................................... 5
Comparison of Approved Budget and Executed Budget .................................................................. 5
Chapter no 2 .......................................................................................................................................... 6
Budget Analysis 2015-2019 ................................................................................................................ 6
The Budget 2015-2016 ....................................................................................................................... 6
Salient Features ............................................................................................................................. 6
The Budget 2016-2017 ....................................................................................................................... 8
Salient Features ............................................................................................................................. 8
The Budget 2017-2018 ..................................................................................................................... 10
Salient Features ........................................................................................................................... 10
The Budget 2018-2019 ..................................................................................................................... 12
Salient Features ........................................................................................................................... 12
PML-N’s Budget 2018-19: ........................................................................................................... 12
The Budget 2019-2020 ..................................................................................................................... 14
Salient Features ........................................................................................................................... 14
PTI’s mini-budget ........................................................................................................................ 16
Chapter no 3 ........................................................................................................................................ 17
Budget comparison from 2015-2019 ............................................................................................... 17
Detailed Explanation of The Difference Between Financial Decisions of the Two Different
Governments.................................................................................................................................... 18
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
3
Federal Budget 2015-2019
Chapter no. 1
Budget analysis
Budget analysis involves examining and explaining the components of budget expenditure and revenue.
The use of budget indicators (ratios) can help to improve understanding of issues such as the level of
implementation of expenditure and revenue budgets or the structure of the budget. In the public sector, the
main objective of budget analysis is to control expenditures and predict future budget needs, thereby
providing decision makers with the information they need to prepare the budget for the next fiscal period.
The International Public Sector Accounting Standards Board (IPSASB) 2014 defines a number of basic
concepts related to the budget, some of which are presented below:
•
•
•
Approved budget means the expenditure authority derived from laws, appropriation bills,
government ordinances, and other decisions related to the anticipated revenue or receipts for the
budgetary period.
Original budget is the initial approved budget for the budget period.
Final budget is the original budget, adjusted for all reserves, carry-over amounts, transfers,
allocations, supplemental appropriations, and other authorized legislative or similar authority
changes applicable to the budget period.
Introduction
The budget plays a key role in the public sector, as it is an essential tool for financial management and
control. Studying its composition provides information about important aspects such as forecasts and
executions of revenue and expenditure. However, classification criteria are needed in order to analyze and
compare the budgets in different countries. Various international organizations have introduced methods
for this purpose, such as the International Monetary Fund’s (IMF) system for classifying expenditures and
revenues according to their economic and functional nature or the International Public Sector Accounting
Standards Board’s (IPSASB) International Public Sector Accounting Standards (IPSAS), an important tool
in helping to prepare accounting reports.
The Importance of the Budget in the Public Sector
Although numerous authors have written on the conceptualization of the budget, Anthony and Young’s
(2003) definition of the budget as “a plan expressed in quantitative, usually monetary terms” is particularly
useful. Horngren et al. (2012) define the budget as “the quantitative expression of a proposed plan of action
by management for a specified period and an aid to coordinating what needs to be done to implement that
plan.” Thus, public budgets can be said to have the following features:
•
•
•
•
The budget activity is an act of foresight. The budget reflects expenses and revenues during a given
period of time.
It is produced at regular intervals (usually one year).
It is based on quantitative balance between revenue and expenses, expressed in accounting
language.
It is an important planning and control instrument, which includes the forecasts and execution of
expenditures and revenues. Thus, it shows the government’s economic performance for a given
period with marked targets and the resources required for its implementation.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
4
Federal Budget 2015-2019
Budget Classifications
The budget is divided into revenue and expense budgets. The revenue budget can be further divided into
two classifications: administrative and economic. The spending budget can have three classifications:
administrative, economic, and functional. As well as these three classification systems, some countries use
additional systems to provide complementary information (Jacobs et al. 2009):
•
•
•
Classification by geographical location of the administrative unit, the taxpayer, or the recipient of
government transfers and subsidies
Classification of the beneficiaries of government transfers and subsidies
Classification of the sources of financing and counterpart funds used for recording external loans
and grants
A budget classification system provides a normative framework for public administration, the structure of
which is based on the establishment of common aspects that help authorities make decisions at all stages of
the budget process (planning, execution, and presentation of information). The classification of budgetary
operations in terms of their economic, functional, administrative, and other characteristics is important for
policy and performance analysis, allocating resources efficiently among sectors, ensuring compliance with
the legislative authorizations and financial regulations, and the day-to-day administration of the budget
(Tommasi 2013; Jacobs et al. 2009).
Revenue Classifications
Revenue classifications are generally based on international standards. Revenue can be classified according
to two systems:
•
•
Administrative classification: informs which entity is responsible for entering the resource.
Economic classification: identifies the type of revenue.
Expenditure Classifications
Expenditures can be classified according to various criteria:
•
•
•
Administrative classification: identifies the entity responsible for managing the public funds
concerned.
Economic classification: identifies the type of expenditure incurred.
Functional classification: organizes expenditure according to the purposes and objectives for which
it is intended.
Comparison of Approved Budget and Executed Budget
The comparison of the approved and the executed budgets informs users whether the resources were
obtained according to forecasts and whether they were carried out according to the approved budget.
Although all budgets need some flexibility to respond to unexpected circumstances, variations from the
approved budget must be clearly reported because they can have significant economic and social impacts.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
5
Federal Budget 2015-2019
Chapter no 2
Budget Analysis 2015-2019
The Budget 2015-2016
Salient Features
The budget 2015-16 has the following salient features:
A. The total outlay of budget 2015-16 is Rs 4,451.3 billion. This size is 3.5% higher than the
size of budget estimates 2014-15.
B. The resource availability during 2015-16 has been estimated at Rs 4,168.3 billion against
Rs 4,073.8 billion in the budget estimates of 2014-15
C. The net revenue receipts for 2015-16 have been estimated at Rs 2,463.4 billion indicating
an increase of 10.7% over the budget estimates of 2014-15.
D. The provincial share in federal taxes is estimated at Rs 1,849.4 billion during 2015-16,
which is 7.5% higher than the budget estimates for 2014-15.
E. The net capital receipts for 2015-16 have been estimated at Rs 606.3 billion against the
budget estimates of Rs 690.7 billion in 2014-15 i.e. a decline of 12.2%.
F. The external receipts in 2015-16 are estimated at Rs 751.5 billion. This shows an increase
of 12.1% over the budget estimates for 2014-15
G. The overall expenditure during 2015-16 has been estimated at Rs 4,451.3 billion, out of
which the current expenditure is Rs 3,482.2 billion and development expenditure is Rs 969
billion
H. The share of current and development expenditure respectively in total budgetary outlay
for 2015-16 is 78.2% and 21.8%
I. The expenditure on General Public Services is estimated at Rs 2,446.6 billion which is
70.3% of the current expenditure.
J. The other development expenditure outside PSDP for 2015-16 has been estimated at Rs
164.4 billion.
K. The size of Public Sector Development Program (PSDP) for 2015-16 is Rs 1,513.7 billion.
Out of this, Rs 813.7 billion has been allocated to provinces. Federal PSDP has been
estimated at Rs 700 billion, out of which Rs 252.6 billion to Federal Ministries / Divisions,
Rs 271.9 billion to Corporations, Rs 20 billion to Pak Millennium Development Goals and
Community Development Program (MDGs), Rs 28.5 billion to Special Federal
Development Program, Rs 7 billion to Earthquake Reconstruction and Rehabilitation
Authority (ERRA), Rs 100 billion for Special Development Program for Temporarily
Displaced Persons (TDPs) and Security Enhancement and Rs 20 billion for Prime
Minister's Youth Program.
L. To meet expenditure, bank borrowing has been estimated for 2015-16 at Rs 282.9 billion,
which is significantly lower than revised estimates of 2014-15.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
6
Federal Budget 2015-2019
Table-1
Budget for 2015-2016
(Rupees in Millions)
Classification
Budget
2015-16
Revised Budget
2015-16
RESOURCES (A + B + C)
4,168,338
4,279,705
A. Internal Resources
3,366,827
3,406,416
-
Net Revenue Receipts
2,463,351
2,480,671
-
Net Capital Receipts
606,303
588,939
-
Estimated
Surplus
Provincial 297,173
336,806
B. External Resources
751,511
859,689
50,000
13,600
4,451,277
4,478,535
A. Current Expenditure 3,482,239
on Revenue Account
3,599,858
-
3,599,858
C. Privatization
Proceeds
EXPENDITURE (A + B)
Current
Exp.
Revenue Receipts
on 3,482,239
B. Total Development 969,038
Expenditure
878,677
-
Federal PSDP
700,000
661,297
-
Development
Expenditure
PSDP
164,400
127,559
-
outside
Development Loans & 104,639
Grants to Provinces
BANK BORROWING
282,940
89,820
198,832
Table 1: Budget 2015-16
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
7
Federal Budget 2015-2019
The Budget 2016-2017
Salient Features
The budget 2016-17 has the following salient features:
A. The total outlay of budget 2016-17 is Rs 4,894.9 billion. This size is 10% higher than the
size of budget estimates 2015-16.
B. The resource availability during 2016-17 has been estimated at Rs 4,442.0 billion against
Rs 4,168.3 billion in the budget estimates of 2015-16.
C. The net revenue receipts for 2016-17 have been estimated at Rs 2,779.7 billion indicating
an increase of 12.8% over the budget estimates of 2015-16.
D. The provincial share in federal taxes is estimated at Rs 2,135.9 billion during 2016-17,
which is 15.5% higher than the budget estimates for 2015-16.
E. The net capital receipts for 2016-17 have been estimated at Rs 453.6 billion against the
budget estimates of Rs 606.3 billion in 2015-16 i.e. a decline of 25.2%.
F. The external receipts in 2016-17 are estimated at Rs 819.6 billion. This shows an increase
of 9.1% over the budget estimates for 2015-16.
G. The overall expenditure during 2016-17 has been estimated at Rs 4,894.9 billion, out of
which the current expenditure is Rs 3,844.0 billion and development expenditure is Rs
1,050.9 billion.
H. The share of current and development expenditure respectively in total budgetary outlay
for 2016-17 is 78.5% and 21.5%
I. The expenditure on General Public Services is estimated at Rs 2,707.2 billion which is
70.4% of the current expenditure.
J. The development expenditure outside PSDP has been estimated at Rs 156.6 billion in the
budget 2016-17.
K. The size of Public Sector Development Program (PSDP) for 2016-17 is Rs 1,675 billion.
Out of this, Rs 875 billion has been allocated to provinces.
L. Federal PSDP has been estimated at Rs 800 billion, out of which Rs 282 billion for Federal
Ministries / Divisions, Rs 318 billion for Corporations, Rs 20 billion for Pak Millennium
Development Goals and Community Development Program (MDGs), Rs 28 billion for
Special Federal Development Program, Rs 7 billion for Earthquake Reconstruction and
Rehabilitation Authority (ERRA), Rs 25 billion for Gas Infrastructure Development, Rs
100 billion for Special Development Program for Temporarily Displaced Persons (TDPs)
and Security Enhancement and Rs 20 billion for Prime Minister's Youth Program.
M. To meet expenditure, bank borrowing has been estimated for 2016-17 at Rs 452.9 billion,
which is significantly higher than revised estimates of 2015-16.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
8
Federal Budget 2015-2019
Table- 2
Budget for 2016-2017
(Rupees in Millions)
Classification
Budget
2016-17
Revised Budget
2016-17
RESOURCES (A+B+C)
4,441,965
4,099,829
A. Internal Resources
3,572,354
3,085,768
-
Net Revenue
2,779,695
2,616,007
-
Net Capital
453,638
180,171
-
Estimated
Surplus
Provisional 339,022
289,589
B. External Resources
819,610
996,287
C. Privatization Proceeds
50,000
17,774
4,894,879
4,841,196
A. Current Expenditure 3,843,986
on revenue account
3,904,753
-
3,904,753
EXPENDITURE (A+B)
Current Expenditure on 3,843,986
revenue receipts
B. Total
development 1,050,893
expenditure
936,443
-
Federal PSDP
800,000
715,085
-
Development
expenditure
PSDP
156,584
127,554
-
outside
Development loans and 94,309
grants to provinces
BANK BORROWING
452,915
93,805
741,367
Table 2: Budget 2016-17
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
9
Federal Budget 2015-2019
The Budget 2017-2018
Salient Features
The budget 2017-18 had the following salient features:
A. The total outlay of budget 2017-18 was Rs 5,103.8 billion. This size was higher by 4.3%
than the size of budget 2016-17. The size of outlay increased to Rs 5,361 billion in revised
estimates 2017-18.
B. The resource availability during 2017-18 had been estimated at Rs 4,713.7 billion, which
increased to Rs 4,774.6 billion or by 1.3% in revised estimates 2017-18.
C. The net revenue receipts for 2017-18 had been estimated at Rs 2,926.1 billion, which
decreased to Rs 2,676.4 billion or by 8.5% in revised estimates 2017-18.
D. The provincial share in federal revenue receipts was estimated at Rs 2,384.2 billion during
2017-18, which decreased to Rs 2,316.1 billion in revised estimates.
E. The net capital receipts for 2017-18 had been estimated at Rs 552.5 billion, which increased
to Rs 594.6 billion in revised estimates 2017-18 or by 7.6%.
F. The external receipts in 2017-18 were estimated at Rs 837.8 billion, which increased to Rs
1,229.8 billion in revised estimates or by 46.8%.
G. The overall expenditure during 2017-18 had been estimated at Rs 5,103.8 billion, out of
which the share of current expenditure was Rs 3,763.7 billion and that of development
expenditure was Rs 1,340.1 billion. Current expenditure in revised estimates 2017-18
showed an increase of Rs 534.6 billion from budget estimates, while development
expenditure showed a decline of Rs 277.3 billion.
H. The share of current expenditure in total budgetary outlay for 2017-18 was 73.7% as
compared to 80.2% in revised estimates 2017-18.
I. The expenditure on general public service for budget 2017-18 was estimated at Rs 2,553.6
billion, which was 67.9% of the total current expenditure.
J. In budget 2017-18, the development expenditure outside Public Sector Development
Program (PSDP) was estimated at Rs 152.2 billion, which increased to Rs 153.2 billion in
revised estimates 2017-18.
K. The size of Public Sector Development Program (PSDP) for 2017-18 was Rs 2,113 billion.
Out of this, Rs 1,112 billion was allocated to provinces. Federal PSDP was estimated at Rs
1,001 billion, out of which Rs 377.9 billion for Federal Ministries/Divisions, Rs 380.6
billion for Corporations, Rs 30 billion for Prime Minister's Global SDGs Achievement
Program, Rs 40 billion for Special Federal Development Program, Rs 12.5 billion for
Energy for All, Rs 12.5 billion for Clean Drinking Water for all, Rs 7.5 billion for
Earthquake Reconstruction and Rehabilitation Authority (ERRA), Rs 5 billion for Special
Provision for Competition of CPEC Projects, Rs 45 billion for Relief and Rehabilitation of
IDPs, Rs 45 billion for Security Enhancement, Rs 20 billion for Prime Minister's Youth
Initiative and Rs 25 billion for Gas Infrastructure Development Cess.
L. To meet expenditure in fiscal year 2017-18, bank borrowing was projected at Rs 390.1
billion, which has been revised upwards to Rs 586.5 billion.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
10
Federal Budget 2015-2019
Table-3
Budget for 2017-2018
(Rupees in Millions)
Classification
Budget
2017-18
RESOURCES (A + B + C)
Revised Budget
2017-18
4,713,686
4,774,567
Internal Resources
3,825,863
3,544,812
-
Net Revenue Receipts
2,926,074
2,676,407
-
Net Capital Receipts
552,520
594,554
-
Estimated
Surplus
Provincial 347,269
273,852
A.
B.
External Resources
837,824
1,229,754
C.
Privatization Proceeds
50,000
0
5,103,780
5,361,038
A.
Current Expenditure 3,763,709
on Revenue Account
4,298,279
-
Current Exp. on Revenue 3,763,709
Receipts
4,298,279
B. Total
Development 1,340,072
Expenditure
1,062,759
-
Federal PSDP
750,000
-
Development Expenditure 152,200
outside PSDP
153,174
-
Development Loans
Grants to Provinces
& 186,871
159,585
390,094
586,472
EXPENDITURE (A + B)
1,001,000
BANK BORROWING
Table 3: Budget 2017-18
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
11
Federal Budget 2015-2019
The Budget 2018-2019
Salient Features
The budget 2018-19 has the following salient features:
A. The total outlay of budget 2018-19 is Rs 5,932.5 billion. This size is 16.2% higher than the
size of budget estimates 2017-18.
B. The resource availability during 2018-19 has been estimated at Rs 4,917.2 billion against
Rs 4,713.7 billion in the budget estimates of 2017-18.
C. The net revenue receipts for 2018-19 have been estimated at Rs 3,070.4 billion indicating
an increase of 4.9% over the budget estimates of 2017-18.
D. The provincial share in federal taxes is estimated at Rs 2,590.1 billion during 2018-19,
which is 8.6% higher than the budget estimates for 2017-18.
E. The net capital receipts for 2018-19 have been estimated at Rs 443.1 billion against the
budget estimates of Rs 552.5 billion in 2017-18 i.e. a decrease of 19.8%.
F. The external receipts in 2018-19 are estimated at Rs 1,118 billion. This shows an increase
of 33.4% over the budget estimates for 2017-18.
G. The overall expenditure during 2018-19 has been estimated at Rs 5,932.5 billion, out of
which the current expenditure is Rs 4,780.4 billion and development expenditure is Rs
1,152.1 billion.
H. The share of current and development expenditure respectively in total budgetary outlay
for 2018-19 is 80.6% and 19.4%.
I. The expenditure on General Public Services is estimated at Rs 3,340.4 billion, which is
69.9% of the current expenditure.
J. The development expenditure outside PSDP has been estimated at Rs 180.2 billion in the
budget 2018-19, which is higher by 18.4% than budget estimates 2017-18.
K. The size of Public Sector Development Program (PSDP) for 2018-19 is Rs 1,650 billion.
Out of this, Rs 850 billion has been allocated to provinces. Federal PSDP has been
estimated at Rs 800 billion, out of which Rs 420.4 billion for Federal Ministries/Divisions,
Rs 246.1 billion for Corporations, Rs 5 billion for Pakistan Sustainable Development Goals
(SDGs) and Community Development Program, Rs 8.5 billion for Earthquake
Reconstruction and Rehabilitation Authority (ERRA), Rs 5 billion for Special Provision
for Competition of CEPEC Projects, Rs 10 billion for FATA 10 year Plan, Rs 45 billion
for Relief and Rehabilitation of IDPs, Rs 45 billion for Security Enhancement, Rs 10 billion
for Prime Minister's Youth Program and Rs 5 billion for Gas Infrastructure Development
Cess.
L. To meet expenditure, bank borrowing has been estimated for 2018-19 at Rs 1,015.3 billion,
which is significantly higher than revised estimates 2017-18.
PML-N’s Budget 2018-19
In April last year, the former government of Pakistan Muslim League Nawaz (PML-N)
presented the federal budget for the fiscal year 2018-19 with a total outlay of Rs 5.9 trillion.
The tax revenue target was Rs4.435 trillion while the GDP growth rate target was fixed at 6.2 per
cent. Rs1.1 trillion was apportioned for defense sector.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
12
Federal Budget 2015-2019
Among other salient features of the previous federal budget, Rs688 million rupees were allocated
for alleviation of poverty and the federal expenditure was set at Rs1010 billion whereas the
provincial at Rs1030 billion.
Table- 4
Budget for 2018-2019
(Rupees in Millions)
Classification
Budget
2018-19
RESOURCES (A + B + C)
Revised Budget
2018-19
4,917,162
5,062,796
A. Internal Resources
3,799,139
3,659,640
-
Net Revenue Receipts
3,070,439
2,568,977
-
Net Capital Receipts
443,096
1,031,676
-
Estimated
Surplus
Provincial 285,604
58,987
B. External Resources
1,118,024
1,403,156
C. Privatization Proceeds
0
0
5,932,464
6,419,111
A. Current Expenditure 4,780,359
on Revenue Account
5,589,431
-
5,589,431
EXPENDITURE (A + B)
Current Exp. on Revenue 4,780,359
Receipts
B. Total
Development 1,152,105
Expenditure
829,680
-
Federal PSDP
800,000
500,000
-
Development
Expenditure
PSDP
180,238
162,929
Development Loans & 171,867
Grants to Provinces
166,751
-
BANK BORROWING
outside
1,015,302
1,356,315
Table 4: Budget 2018-19
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
13
Federal Budget 2015-2019
The Budget 2019-2020
Salient Features
The budget 2019-20 has the following salient features:
A. The total outlay of budget 2019-20 is Rs 8,238.1 billion. This size is 38.9% higher than the
size of budget estimates 2018-19.
B. The resource availability during 2019-20 has been estimated at Rs 7,899.1 billion against
Rs 4,917.2 billion in the budget estimates of 2018-19.
C. The net revenue receipts for 2019-20 have been estimated at Rs 3,462.1 billion indicating
an increase of 12.8% over the budget estimates of 2018-19.
D. The provincial share in federal taxes is estimated at Rs 3,254.5 billion during 2019-20,
which is 25.7% higher than the budget estimates for 2018-19.
E. The external receipts in 2019-20 are estimated at Rs 3,032.3 billion. This shows an increase
of 171.2% over the budget estimates for 2018-19.
F. The overall expenditure during 2019-20 has been estimated at Rs 8,238.1 billion, out of
which the current expenditure is Rs 7,288.1 billion.
G. The expenditure on General Public Services is estimated at Rs 5,607.0 billion, which is
76.9% of the current expenditure.
H. The development expenditure outside PSDP has been estimated at Rs 85.8 billion in the
budget 2019-20.
I. The size of Public Sector Development Program (PSDP) for 2019-20 is Rs 1,613 billion.
Out of this, Rs 912 billion has been allocated to provinces. Federal PSDP has been
estimated at Rs 701 billion, out of which Rs 348.2 billion for Federal Ministries/Divisions,
Rs 348.2 billion for Corporations, Rs 5 billion for Earthquake Reconstruction and
Rehabilitation Authority (ERRA), Rs 17 billion for Relief and Rehabilitation of IDPs, Rs
53 billion for Security Enhancement, Rs 5 billion for Prime Minister's Youth Skill
Development Initiative, Rs 2 billion for Clean Green Pakistan Movement/Tourism, Rs 1
billion for Gas Infrastructure Development Cess, Rs 48 billion for Merged Areas of FATA
10 Years Development Plan and Rs 24 billion for Pakistan Sustainable Development Goals
(SDGs) and Community Development Program.
J. To meet expenditure, bank borrowing has been estimated for 2019-20 at Rs 339 billion,
which is lower by 688.7 billion than the revised estimates 2018-19 reflecting decrease at
75%.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
14
Federal Budget 2015-2019
Table-5
Budget for 2019-2020
(Rupees in Millions)
Classification
RESOURCES (A + B + C)
Budget
2019-20
7,899,077
A. Internal Resources
4,716,753
-
Net Revenue Receipts
3,462,099
-
Net Capital Receipts
831,659
-
Estimated
Surplus
Provincial 422,995
B. External Resources
3,032,325
C. Privatization Proceeds
150,000
EXPENDITURE (A + B)
8,238,073
A. Current Expenditure on 7,288,179
Revenue Account
-
Current Exp. on Revenue
Receipts
7,288,179
B. Total
Development 949,895
Expenditure
-
Federal PSDP
-
Development Expenditure 85,791
outside PSDP
-
Development Loans & 163,104
Grants to Provinces
701,000
BANK BORROWING
338,996
Table 5: Budget 2019-20
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
15
Federal Budget 2015-2019
Important Points 2019
A. The government has instituted a new initiative to help the needy and impoverished, ‘Ehsas
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
P.
Q.
Program’ and ‘Sehat Insaf’ cards are initiatives that will lessen the burden on the less
fortunate.”
‘Rashan Card’ scheme has been introduced in the budget which will make the card holders
eligible for ration around the year.
Funds have been released for the completion of development projects and more funds have
been allocated to start new development projects all over Pakistan.
The ‘Ehsaas program’ has been increased from RS5000 to Rs5500.”
The amount for children stipend has been increased from Rs750 to Rs1000 under the Prime
Minister’s Youth Affairs initiative.
Rs20 billion have been allocated for the land of Diamer Dam.”
Rs80 billion have been suggested for the Energy sector and will be allocated soon enough.”
Rs 43 billion has been fixed for the higher education.”
Prime Minister Imran Khan has given approval to the Rs100 billion worth ‘Kamyab Jawan
Program’.
Foreign investors have been taken on board to look into the detrimental state of the Pakistan
Steel Mills, Azhar elaborated.
We will be getting Rs.1 billion from mobile card taxation, revealed Azhar.
An increase of 2.5pc tax imposed on 1000CC cars.”
Money laundering is a black mark opined Azhar and the country suffers internationally and
nationally due to it, we are taking strict measures to the put a stop to the practice, new
system will be launched to counter money laundering, said Azhar.
Minimum wage will be increased to Rs. 17500.”
Parliamentary officials of the government taking to their leader, the Prime Minister have
agreed to 10 percent deduction in their monthly incomes, announced Azhar.
10pc increase in the salaries of grade 1 to 10 employees have been agreed upon in the fiscal
year budget of 2019-20, whereas no increase is being made in the salaries for Grade 21 and
22 employees.”
Rs55 billion has been allocated for Daso Hydro Power project.
PTI’s mini-budget
On Jan 23, former finance minister Asad Umar announced the government’s second mini-budget,
which largely focuses on revenue-based measures to improve supply-side conditions for
businesses and incentivize domestic reinvestment.
After unveiling the budget, Umar had said that the Supplementary Finance Bill (Second
Amendment) 2019 also known as the government’s mini-budget was, in reality, ‘economic
reforms bill’, which was aimed at promoting investment and giving support to the national
economy.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
16
Federal Budget 2015-2019
Chapter no 3
Budget comparison from 2015-2019
Table-6
(Rupees in Millions)
Classification
Budget
2019-20
Budget
2017-18
Budget
2016-17
Budget
2015-16
5,062,796
3,659,640
4,774,567
3,544,812
4,099,829
3,085,768
4,279,705
3,406,416
2,568,977
2,676,407
2,616,007
2,480,671
1,031,676
594,554
180,171
588,939
422,995
58,987
273,852
289,589
336,806
3,032,325
1,403,156
1,229,754
996,287
859,689
0
0
17,774
13,600
6,419,111
5,589,431
5,361,038
4,298,279
4,841,196
3,904,753
4,478,535
3,599,858
5,589,431
4,298,279
3,904,753
3,599,858
RESOURCES (A+B+C) 7,899,077
A. Internal
4,716,753
Resources
- Net
Revenue 3,462,099
Receipts
- Net
Capital 831,659
Receipts
-
Estimated
Provisional
Surplus
B. External
Resources
C. Privatization
150,000
Proceeds
EXPENDITURE (A+B) 8,238,073
A. Current
7,288,179
Expenditure on
revenue account
-
7,288,179
Current
Expenditure on
revenue receipts
Budget
2018-19
B. Total
development
expenditure
949,895
829,680
1,062,759
936,443
878,677
-
Federal PSDP
Development
expenditure
outside PSDP
701,000
85,791
500,000
162,929
750,000
153,174
715,085
127,554
661,297
127,559
-
163,104
Development
loans and grants
to provinces
166,751
159,585
93,805
89,820
1,356,315
586,472
741,367
198,832
BANK BORROWING
338,996
Table 6: Budget Comparison 2015-19
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
17
Federal Budget 2015-2019
Detailed Explanation of The Difference Between Financial Decisions of the
Two Different Governments
The data shows that Pakistani economy is in troubled waters since August 2018. Consumer
confidence is low and private investors are reluctant to invest capital in new business activity. The
detailed analysis on Pakistan’s business competitiveness also presents a bleak picture. The Central
Bank of Pakistan is not viewed as independent. However, Imran Khan can be considered a
successful politician as his first year has seen increased political stability that was elusive during
PMLN government. PTI has also marked a significant victory in its fight against corruption.
Furthermore, PTI government has been able to turn around Pakistan’s external sector and there is
significant increase in exports and subsequently terms of trade have improved that is telling
something positive about PTI’s foreign policy.
Ishaq Dar took oath on June 7 as finance minister after PML-N won 2013 general elections. He
immediately swung into action and spent one day and two nights in the finance ministry and came
up with federal budget on June 12. Keeping in view his strategy to move IMF, he announced 19
prior actions in the budget to secure the bailout package from the Fund. Dar managed signing of
$6.4 billion bailout package on July 4, 2013 with no chaos and uncertainty at all. The confidence
of the investors and stock market restored within no time.
The first action he took to layoff Rs483 billion which were payable to IPPs ensured an increase in
electricity generation by 1500-1700MW at the time when the country was facing 22 hours load
shedding. The Rs483 billion were disbursed in 55 days. The PML-N economic managers’ team,
headed by Ishaq Dar, was clear-headed as they did a lot of homework prior to joining the
government. When the PML-N came to power the country was virtually on the verge of default as
State Bank’s reserves were at $2.75 billion with zero external inflows.
However, the finance ministry’s top officials on the condition of anonymity admitted in lengthy
background discussions the bitter fact that Asad Umar, who knew well that he would be the PTI
government’s finance minister, did no homework to tackle the country’s economy.
Asad Umar, they argued, has failed in the short-term management on tackling the economy and
getting the country out of chaos, but his team is on the toes on long-term management. This
resulted in dollars appreciation. However, total appreciation of dollar value increased by 30 percent
from Rs105 to 115 in Abbasi era, and during the caretaker regime dollar further appreciated to
Rs125. In the PTI government, the dollar value went up to Rs135 in the open market on account
of indecisiveness owing to which Pakistan debt has increased by Rs3,000 billion and stock market
suffered a loss of Rs1,000 billion.
However, in the first 100 days of PTI government, foreign direct investment has tumbled by 55
percent, fiscal deficit increased to 1.4 percent if compared with corresponding month of last year
2017 which stood at 1.2 percent. The revenue target of Rs68 billion has been missed as it grew by
7-8 percent only. Development expenditure has been slashed down by 25 percent in PSDP and 50
percent in Punjab development budget causing surge in unemployment. However, contrary to the
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
18
Federal Budget 2015-2019
claims of Prime Minister Imran Khan about austerity drive, expenditures have increased by 17-19
percent.
More importantly, inflation has swelled to close to 7 percent. The wholesale consumer index price
has jacked up by 13 percent which will further fuel the consumer price at retail level exposing the
masses to another deadliest wave of inflation.
The sizeable cuts in the federal and Punjab develop budgets will trigger surge in unemployment.
The growth in large manufacturing scale turned negative. However, the oil prices in the
international market have decreased from $75 per barrel to below $50 barrel which will be not less
than a bonus for the government and time will tell how the government’s economic managers take
the advantage of the low prices of oil in global market in favor of country’s economy. The current
account deficit, however, has reduced by 4.6 percent to $4.8 billion in four months from $5.1
billion on account of corrective measures taken by the current regime.
However, the PTI government cannot be held responsible for the fiscal and trade deficits as these
are not the result of current government’s measures. Dr Hafeez Pasha, Pakistan’s well-known
economist says 100 days agenda is too heavy, but it can be prioritized with revitalization of
economy on top and it would have been much better if the revitalization of economy is renamed
as stabilization of economy.
Hafeez Pasha, however, said the biggest challenge of the government is to arrange $27-30 billion
to cater to the needs of country’s financing requirements in the current financial year. Pakistan
needs massive financing to substantially reduce current account deficit and to cope with the
external liabilities needs.
In the emerging situation, the government of the day is working both ways - engaging IMF and
carving out Plan-B. The Plan-B is going to be firmed up in next 2-3 weeks. The government is
expecting a package from China and UAE in 2-3 weeks too. So far, the government is comfortable
with reserves of $8.5 billion parked with State Bank of Pakistan.
Dr Furrukh Saleem, spokesman of PTI government on economy, admitted the fact that the
government has failed to end the chaos and uncertainly that has gripped the investors and players
of Pakistan stock market. He said the government needs to take business community into
confidence about the future course of action. However, the government is on its toes on engaging
IMF again and at the same time is working on Plan-B.
While examining the PML-N- government headed by Nawaz Sharif, it is found that during the
first four years to June 2017, tight fiscal and monetary discipline and policies yielded positive
results. The budget deficit was brought down from 8.2% of GDP to 5.8%, despite an extraordinary
expenditure relating to Operation Zarb-e-Azb (war against terrorism) which was around Rs100
billion per annum; SBP Repo Rate from 9% to 6.25%; Export Re-Finance Rate from 8.4% to 3%;
Long Term Finance Facility Rate from 8.4% to 3% and inflation from annual average of 12%
during 2008-2013 period to 4.16% in FY 2017. Most of these indicators were best in the last four
decades.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
19
Federal Budget 2015-2019
The federal tax collection increased by 3.38% in Financial Year 2013 at Rs1,946 Bio to Rs3,367
Bio in FY 2017 indicating an average annual growth of 18% and Rs3,935 in FY 2018. During this
period, the Foreign Direct Investment (FDI) increased from US dollars 1,456 million to 2,731
million and foreign remittances from US dollars 13.92 billion to 19.35 billion. National Foreign
Exchange Reserves rose from US dollars 7.5 billion in Feb 2014 to 21.4 billion by June 30, 2017,
after having touched a peak of dollars 23.1 billion on 30th June, 2016.
During the PML-N government, Pakistan succeeded in achieving 11-year high GDP growth rate
of 5.3% in FY 2017 and 5.8% in FY 2018. And more importantly, the size of economy grew to
over $300 billion.
The official also said dollar appreciation must be based on economic fundamentals. Pakistani
products were not being entertained in the international markets because of the price
competitiveness necessitating dollar appreciation up to Rs135 which factually should have been
adjusted at Rs120. The PTI government, the official added, has further appreciated dollar value up
to Rs135 for bailout package. He said there were two objectives - to increase exports and to slash
down the imports.
Dr Ashfaq, an eminent economist, said the US dollar appreciation was imperative but it should
have been adjusted at Rs124, not at Rs135.
LAHORE COLLEGE FOR WOMEN
UNIVERSITY, JHANG CAMPUS
20