In order to support the IMF agreement, the government sets a lofty tax collection target of Rs. 13 trillion and strives for 3.6% GDP growth.
The government’s economic output was nonetheless “impressive”: According to Aurangzeb, FinMin. FBR collection target is set at Rs12,970 billion.
The budget suggests raising the minimum salary to Rs 36,000.
In his first budget 2024–25 speech on the National Assembly floor, Finance Minister Muhammad Aurangzeb only confirmed that the relief that the millions of people affected by inflation, whose incomes have fallen to rock bottom in recent years, sorely need is outweighed by a long-term loan agreement with the International Monetary Fund (IMF) to save Pakistan’s economy.
Seeking to maintain economic stability, avoid losing favour, and endure sticky deflation, the coalition government led by the Pakistan Muslim League-Nawaz (PML-N) appears to be grovelling before the IMF to initiate the next bailout.
The opposition members chanted, “go Nawaz go” during the session.
“Despite the financial and political challenges during the past one year, the government’s progress on the economic front has been impressive,” the finance minister said.
“All political parties have expressed a desire to work together for the good of the nation on multiple occasions. He stated, “We can’t afford to waste this opportunity as nature has given Pakistan another chance to walk on the path of economic progress. We need all MNAs to work with the government to put the country on the path to progress.”
A while back, the State Bank’s reserves were insufficient to cover imports for longer than two weeks, which put Pakistan’s economy in a precarious position. The rupee’s value fell by 40%, there was hardly any economic growth, and inflation had risen to the point that people were rapidly falling below the poverty line. Leaving this circumstance seemed to be hard” told the minister.
GDP
According to the finance minister, inflation is predicted to drop to 12% and the GDP growth rate would continue at 3.6% in the upcoming fiscal year.
According to him, the primary surplus should continue to be at 1% of GDP, whereas the budget deficit is 6.9% of GDP.
The Federal Board of Revenue (FBR) projects that taxes will be collected of Rs12,970 billion, 38% more than in the current fiscal year.
As a result, the province will receive Rs7,438 billion in federal tax revenue.
The finance minister stated that the federal government has set a non-revenue objective of Rs3,587 billion, while the Center’s net income is Rs9,119 billion. The minister further stated that the entire expected federal expenditures are Rs18,877 billion, of which Rs9775 billion will be spent on payments of interest.
“PM Shehbaz-led coalition government deserves felicitations for untiring efforts for the revival of the economy,” he added.
Aurangzeb further stated that inflation, which was the centre of attention of Prime Minister Shehbaz Sharif and his team, came down to almost 12% in May leading to a decrease in the prices of essential commodities.
“It is not an ordinary achievement in the light of existing challenges,” he said, predicting further drop in inflation. The minister further stated that the foreign exchange reserves have also been stable.
He said that the recent cut in the interest rate by the SBP was proof of the government’s efforts to bring down inflation.
