Govt announces 10 percent pay hike for grade 1 to 16 employees

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ISLAMABAD: Minister of State for Revenue Hammad Azhar on Tuesday unveiled the first budget of the Pakistan Tehreek-e-Insaf (PTI)-led federal government with an approximate outlay of Rs6.7 trillion.

Opposition members attended the budget’s session wearing black armbands in protest against the arrest of former president Asif Ali Zardari and PML-N leader Hamza Shehbaz. The opposition lawmakers chanted slogans against the government, saying they would not accept the “IMF budget.”

Prime Minister Imran Khan was also in attendance.

“Pakistan s total debt has reach Rs31 trillion. We are deeply indebted thanks to high-interest loans. Foreign exchange reserves had dropped below $10 billion. The current account deficit had reached a historic peak of $20bn, while the trade deficit had reached $32bn. The fiscal deficit was more than Rs2.26tr. [These deficits] were attributable to financial mismanagement in an election year.”

The minister said current account deficit will be reduced to 6.5pc in FY19-20 and exports will be boosted through a revised duty structure. “Power and gas will be cheapened and Free Trade Agreements will be re-evaluated,” he said and added Pakistan will be made a part of the international value chain.

Azhad said we borrowed a total of $9.2 billion from China, Kingdom of Saudi Arabia, and the United Arab Emirates, adding that the government empowered State Bank of Pakistan (SBP).

“A total of 11 per cent tax to GDP ratio currently, was the lowest in the region,” he said and added there were only 50 percent of SECP registered companies paying tax. “We will have to change this culture.”

“Time has come to eradicate corruption from public offices,: he said. “The country is under $97 billion foreign debt.” Pakistan, he said, can not progress unless people start paying tax.

The minister also commended Prime Minister Imran Khan and army chief for voluntary cut in military budget.

The minister announced that the military budget would be kept static at 1150 billion. He also confirmed signing a $6 billion agreement with the International Monetary Fund.

A new ration card scheme is being launched to facilitate 10 million people, he said, adding that wheel chairs and hearing aids would be provided free of couts to disabled people.

The government has allocated Rs110 billion for Benazir Income Suppport Program, he said, adding that it would benefit 5.7 million families who would be able to Rs5000 a month.

He said that there will be no pay raise for government employees above Grade 21 or more.

“In a historic decision, the federal ministries have voluntarily agreed to reduce their salary by 10 percent in view of the country’s difficult economic situation.’

  • A ration card scheme is being introduced. 60,000 women will be given access to mobile phones.
  • Rs1,800 billion kept for development programmes. Rs950 billion kept for federal development programme
  • Civil budget decreased from Rs460 billion to Rs437 billion.
  • Defence budget will remain Rs1.150 trillion
  • Tax net will be increased as only 20,00,000 people in Pakistan file tax returns of them 600,000 are employees.
  • Rs45.5 billion have been allocated for Karachi s development program
  • Rs40 billion would be given in subsidy for gas and electricity
  • Interest free loans would be provided to 80,000 deserving people every month
  • Defence budget will remain Rs1.150 trillion
  • Rs1,800 billion kept for PSDP, while Rs950 billion kept for federal PSDP
  • BISP stipend has been increased from Rs5,000 to Rs5,500
  • Rs421 billion have been allocated for pension
  • Rs12 billion have been allocated for agricultural program
  • 10 percent ad hoc relief for armed forces employees
  • Pensions increased by 10 percent
  • Employees from grade 1 to 16 have been given 10 percent increase in salaries
  • Employees from grade 17 to 20 have been given 5 percent increase in salaries
  • No increase in salaries for government employees from grade 21 to 22
  • Rs2891 billion has been allocated to pay the interests
  • Rs70 billion has been allocated for water reservoirs
  • Minimum wage set at Rs17,500
  • Ministers agree to voluntary 10 percent cut in salaries
  • The National Development Programme will have a total size of Rs1,800bn
  • Of this, Rs950bn will be spent by federal
  • Rs70bn on dam projects; Rs15bn and 20bn respectively for Bhasha and Mohmand dam land acquisition
  • Rs55bn for Dasu hydro power project
  • Balochistan development package to get Rs10.4bn and Rs30bn for water projects
  • Rs 63.5 billion allocated for special areas including merged districts of Khyber Pakhtunkhwa, Azad Jammu and Kashmir and Gilgit-Baltistan.
  • Rs75 billion have been allocated for equitable Regional Development in order to accelerate development of less developed areas and 22 billion rupees are set aside for 10 year development plan of merged districts.
  • Rs128 million have been allocated for conservation and promotion of rich and diverse cultural heritage of Pakistan
  • Rs28,646 million have been allocated for Higher Education Commission
  • Rs912 billion have been allocated for provincial Annual Development Plans.
  • General sales tax on goods will remain unchanged and will stand at 17 percent.
  • Food items supplied to bakeries and restaurants will be taxed at 4.5 pc
  • Budget deficit to be Rs3,560 billion
  • Tax revenue target set at Rs5,822bn
  • Non-tax revenue target set at Rs894bn
  • Sales tax to be increased on diamond, gold and silver jewellery
  • Seven percent Federal Excise Duty would be applicable on vehciles over 2000cc
  • Five percent Federal Excise Duty would be applicable on 1000cc vehciles
  • 2.5 percent Federal Excise Duty would be applicable on vehciles below 1000cc
  • Cement duty has been increased from Rs1.5 to Rs2
  •  Inflation targets set at between 5 and 7 percent
  • 3 percent tax on import of mobile phones to be eliminated

The new budget envisages total development outlay of 1,863 billion rupees for the next fiscal year.

The size of federal Public Sector Development Programme has been set at 951 billion rupees, which also includes foreign assistance of 127 billion rupees.

Besides an amount of 912 billion rupees has been allocated for provincial Annual Development Plans.

The Minister of state said we are firm for the defense and sovereignty of the country, and no compromise will be made on the defense capability of the country.

Given the current economic situation, Hammad Azhar said the government has acted with responsibility and taken steps for the economic stabilization.

We have increased import duty which helped us bring down imports from forty nine billion dollars to forty five billion dollars.

He said remittances have witnessed an increase of two billion dollars.

He said the IMF package will also help the country steer the economy towards stability.