All you need to know about Budget 2017-18

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Finance Minister Ishaq Dar presented the budget for the upcoming fiscal year 2017-18. It was PML-N government’s fifth budget with the total outlay of Rs. 4.778 trillion.

Key features:

  • The total outlay of the budget is Rs4.75 trillion
  • Total tax revenues target has been set at Rs4.33tr, of which the Federal Board of Revenue will collect Rs4.01tr.
  • The development expenditure for next year will be Rs1.001tr.
  • The defence budget has been set at Rs920.2bn.
  • The minimum wage will be set at Rs15,000.
  • Agriculture, SMEs and IT will be given tax breaks.
  • By 2018 summers, nearly 10,000MW of electricity will be added to the national grid, eliminating load-shedding completing.
  • BISP will be allocated Rs121b for 5.5 million beneficiaries.
Agriculture:
  • Nearly Rs1.001tr will be given out in agricultural loans next year.
  • Agricultural credit will be extended at 9.9pc on Rs50,000 amount to farmers who hold 1.2m acres of land.
  • Imported fertiliser will be subsidised.
  • Urea will be sold at Rs1,400 per bag.
  • Other fertilisers’ prices will also be kept constant through subsidies.
  • The State Bank will also help link the banking system to the land record management system to facilitate farmers in securing loans.
  • Tubewells will be provided subsidised electricity.
Industrial:
  • Zero-rated schemes for textiles, leather and other sectors will be continued.
  • To promote textiles, cotton hedge trading will be introduced. A brand development fund will also be created.
  • An online b2b and b2c portal for textile trading will be introduced.
  • Custom duty on raw hides will be eliminated.
Housing:
  • Government will provide guarantees for housing loans for up to Rs1 million.
Infrastructure:
  • Pakistan Development Fund will be established.
  • Pakistan Infrastructure Bank will be established to provide loans to private infrastructure projects.
Financial sector:
  • Microfinance institutions will provide loans to low-income individuals worth Rs8bn in total.
  • Withholding tax on branchless banking will be eliminated.
  • SMEs will be provided easy-to-access loans through a risk mitigation facility secured with Rs3.5bn from the State Bank.
Information Technology:
  • An IT park is being established with the help of South Korea
  • New IT companies will be exempted from income tax for the first three years.
  • IT exports from Gilgit, Fata and will be exempted from sales tax.
  • Withholding tax on mobile phones to be reduced from 14pc and custom duty on smartphone sets will be cut to Rs650 per set.
Development expenditures:
  • Federal development expenditures have been increased 37pc.
  • Energy and infrastructure will get 67pc of the PSDP budget. Rs411bn will be allocated for this.
Energy:
  • Loadshedding will be history by next year.
  • 401bn rupees will be allocated to energy projects.
  • Energy for All program will receive Rs. 12.5bn
  • Dasu project Rs. 54bn.
  • LNG projects to receive Rs. 70bn.
  • Diamer Bhasha will receive Rs. 21bn.
  • Neelum Jhelum will receive Rs. 19bn.
  • Tarbela-IV will receive Rs. 16.4bn.
  • Jamshoro plant will receive Rs. 16.2bn.
  • Transmission and distribution lines from Matiari to Lahore will be builty.
Water:
  • Government is focusing on building dams and improvement the water distribution infrastructure.
  • 38bn will be allocated under this head.
Roads and highways:
  • 320bn will be allocated to national highways.
Railways:
  • 45.9bn to be allocated to Railways, including for 75 new engines, 830 bogies and 250 coaches and the Peshawar to Karachi railway line.
Human development:
  • 35.7bn for Higher Education.
  • Health programs will receive Rs49bn.
  • Hospitals will receive Rs10bn.
  • 12.5bn will be allocated for Clean Drinking Water for All.
  • Sustainable development goals will get Rs30bn.
Gwadar:
  • 31 new projects, including a new airport, 200-bed hospital and desalination plants.
CPEC:
  • 180bn have been allocated for CPEC projects.
Special projects:
  • 45.6bn for projects Azad Jammu & Kashmir, Gilgit Baltistan and Fata.
Security:
  • All Army officers and jawans will receive a 10pc special allowance other than the salary increment in lieu of their sacrifices in Pakistan’s war against militancy.
Major heads:
  • 2,384bn to be given to provinces.
  • Defence budget will be Rs920bn.
  • PSDP will be Rs1,001bn
  • Budget deficit will be limited to 4.02pc of GDP, contingent on spending on the ‘war against terrorism’,
Taxes:
  • Target to raise them to 15pc of GDP.
  • Corporate sector will get relief in the form of a 30pc effective corporate tax rate.
  • Islamic banking will face the same taxing regime as commercial banks.
  • Withholding taxes on new car registrations have been cut for lowest three categories.
  • Cement FED will be increased from Rs1 per kilogramme to Rs1.25/kg,
  • Commercial import of clothing will be taxed at 6pc.
  • Steel sector will be taxed at 10pc compared to the current 9pc.
 

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