ISLAMABAD: Finance Minister Muhammad Aurangzeb is currently presenting his first federal budget in the National Assembly. Opposition lawmakers, who were absent in the previous few budgets, are loudly chanting slogans.
Shouts of “go, Nawaz, go,” can be heard thundering throughout the proceedings as Aurangzeb powers through his speech, seemingly unfazed.
The main objectives of FY 2024-25 budget are following below; Ensuring stability and growth through fiscal consolidation and efficient use of public money; Bringing about reforms to ensure a sustainable external sector by reducing the current account deficit; Strengthening the policy framework for mobilizing the private sector, fostering entrepreneurship, encouraging investment, and promoting innovation to stimulate economic growth; Supporting vulnerable sections of society through pro-poor initiatives; Improving the efficiency and productivity of public sector enterprises by allocating more funds for PSDP; Introducing targeted reforms for energy and agricultural sectors; Education and skill development of youth; Integrating green and gender-responsive budgeting into public finance management; This year’s budget, like last year’s, is widely considered to be crafted to align with the International Monetary Fund’s (IMF) requirements to secure another bailout, this time “larger and longer”; The finance minister thanked Prime Minister Shehbaz Sharif, PML-N chief Nawaz Sharif as well as various other leaders of the coalition government for their guidance in preparing the budget;
The Finance Minister stated, Dear speaker, I think that despite political and economic challenges, our progress on the economic front in the past one year has been impressive,” Aurangzeb said.
He urged Pakistan to capitalise on a fresh opportunity to revitalise its economy. “Pakistan has another opportunity to improve itself and embark on the path of economic development. I request everyone not to waste this chance,” Aurangzeb said.
The finance minister hailed the government’s efforts to address economic challenges and pledged to accelerate development under the leadership of PM Shehbaz. “Before presenting the budget, I want to highlight our journey thus far,” the minister said. “Under Prime Minister Shehbaz Sharif’s leadership, we have pursued a homegrown agenda that has enabled us to overcome current economic challenges and boost the pace of development.”
Aurangzeb acknowledged the challenges faced by Pakistan’s economy, which had been struggling with depleted foreign reserves, a 40 per cent depreciation of the rupee, stagnant economic growth, and soaring inflation that pushed citizens below the poverty line.
He commended the government for securing a crucial nine-month IMF programme in June 2023, which helped Pakistan avoid economic collapse.
“The previous IMF programme was ending, and a new deal was essential to prevent a default. I commend Shehbaz Sharif’s government for their efforts in securing the programme,” he said.
Aurangzeb highlighted the significant improvement in economic indicators, crediting the PM and his team for their efforts. “Inflation stood at 11.8pc in May, a notable achievement considering the challenges. We’re on the right track, and inflation is likely to decrease further in the coming days,” he said.
The minister spoke of a significant turnaround in Pakistan’s economy, with foreign exchange reserves bolstered and international investors showing keen interest in investing in the country.
Key points from tax policy are as coming; Expand the tax base to enhance the tax-to-GDP ratio; Documentation of the economy through digitization; Progressive taxation regime to increase burden on high earners; Increase in transaction taxes for non-filers
Protect vulnerable segments from impact of inflation;
“Pakistan’s foreign exchange reserves have been strengthened, and international investors are now seeking opportunities to invest in our economy,” Aurangzeb said, highlighting the improved economic outlook.
He applauded the State Bank’s decision to cut interest rates, citing visible efforts to combat inflation. “The State Bank’s interest rate cut is a significant move, and the efforts to curb inflation are evident. Shehbaz Sharif and his team deserve congratulations for their commendable efforts to turn the economy around,” Aurangzeb said.
“These achievements are not ordinary. As a result of these, the country has exited a difficult time.”
The minister emphasised the need for patience and collective efforts to achieve sustainable economic development, cautioning that progress cannot be accelerated overnight.
Aurangzeb called for prioritising the private sector’s growth, acknowledging its crucial role in revitalising Pakistan’s economy.
“It’s time to give primary importance to the private sector in our economy,” Aurangzeb said.
Aurangzeb identified structural factors as key to addressing Pakistan’s economic imbalance, stressing the need to boost investment, economic output, and exports.
“We’re facing an economic imbalance, but structural factors like investment, economic output, and exports can help address this challenge,” Aurangzeb said, as he outlined a path forward for economic stability.
He said like most modern economies, we also need to keep in mind privatization and regulatory reforms. The state should limit itself to essential public services only.
“To improve productivity, domestic and foreign investment should be encouraged,” he said.
The federal budget for fiscal year 2025 has a total outlay — the sum of expenditures and net lending of funds — of Rs18.877 trillion, representing a 30pc increase from the previous year’s budget.
The government has proposed Rs17,203 billion for current expenditure in the FY25 budget, a substantial 29pc increase from the previous year.
Pakistan’s total revenue for fiscal year 2025 is budgeted at Rs17,815 billion. After accounting for provincial transfers of Rs7,438 billion, the net revenue stands at Rs10,377 billion, representing a significant 48.7pc increase from the previous year.
The government has set an inflation target at 12pc for next fiscal year, aiming to rein in prices.
“There is a need for patience and extreme hard work, combined with homegrown corrective plans. The public must work together with institutions to achieve our economic goals,” Aurangzeb said, once again stressing the importance of collaboration and sustained efforts.
Aurangzeb emphasised the need for Pakistan to transition from a government-controlled economy to a market-driven economy, aligned with global standards, to boost exports and foster a savings-and-investment-based economy.
“We must shift from a government-determined economy to a market-driven economy, aligning our economic system with global standards, increasing exports, and promoting a savings-and-investment-based economy over a consumption-based one,” Aurangzeb said.
He highlighted the importance of considering equity and inclusion when implementing economic reforms, urging bold measures to ensure a more equitable economic system.
“When introducing economic reforms, we cannot ignore equity and inclusion. Bold measures are necessary to create a more inclusive economic system,” the minister said.
Earlier, the session commenced with the recitation of the Holy Quran and the national anthem.
Prime Minister Shehbaz Sharif and Deputy Prime Minister Ishaq Dar — Aurangzeb’s predecessor — are attending the session.
The session started with a nearly two-hours delay after the PPP voiced reservations on the development allocations and PML-N managed to placate them.
PPP lawmakers are now attending the session to complete the required quorum, albeit without party chairman Bilawal Bhutto Zardari. After recitation of the Holy Quran and the national anthem, the presentation is expected to begin.
Read more: Federal Government all set to present Rs18,500 billion growth-oriented budget today
