Key highlights of Budget 2024-25

Key Highlights of Budget 2024-25 in Pakistan

The Budget 2024-25 for Pakistan has been announced, reflecting the government’s economic priorities and policy directions for the upcoming fiscal year. This budget aims to address various economic challenges, stimulate growth, and ensure sustainable development. Here are the key highlights:

Economic Growth and Stability

  • GDP Growth Target: The government has set a GDP growth target of 3.6% for the fiscal year 2024-25.
  • Inflation: Inflation is projected to be 12% in FY2024-25.
  • Total Outlay: The total outlay of the budget for FY25 is Rs18.9 trillion.
Key highlights of Budget 2024-25

Revenue and Borrowing

  • Gross Revenue Receipts: Expected at Rs17.8 trillion.
  • Non-bank Borrowing: Expected at Rs2.662 trillion.
  • Bank Borrowing: Rs5.142 trillion.
  • Net External Receipts: Rs666 billion.
  • Privatisation Proceeds: Expected at Rs30 billion.
  • FBR Taxes: Envisaged at Rs12.97 trillion, around 40% higher than the outgoing fiscal year.
  • Non-tax Revenue: Envisaged at Rs4.8 trillion.

Expenditure Breakdown

  • Interest Payments: Rs9.775 trillion.
  • Pensions: Rs1.014 trillion.
  • Defence Affairs and Services: Rs2.122 trillion.
  • Grants and Transfers to Provinces: Rs1.777 trillion.
  • Subsidies: Rs1.363 trillion.
  • Running of Civil Government and Emergency Provision: Rs1.152 trillion.
  • Development and Net Lending: Rs1.674 trillion.

Fiscal Deficit

  • Overall Fiscal Deficit: Rs7.283 trillion.
  • Fiscal Deficit as Percentage of GDP: 5.9%, down from the revised 7.4% of FY2023-24.

Public Sector Development Program (PSDP)

  • Total PSDP Allocation: Rs1.400 trillion.
  • Federal PSDP: Rs1.400 trillion.
  • Development of Energy Sector: Rs253 billion allocated.

Social Welfare and Poverty Alleviation

  • BISP Enhancement: Allocation increased from Rs466 billion to Rs592 billion.
  • Utility Stores Corporation: Subsidy allocation of Rs65 billion.
  • Ramzan Package: Rs10 billion kept for the Ramzan package.
  • Pensions of Government Employees: To be increased by 15%.
  • Salaries: 25% increase for Grades 1 to 16 and 20% for Grades 17 to 22.
  • Minimum Wage: Proposed at Rs37,000

Taxation and Revenue Generation

  • Extra Federal Excise Duty (FED): Rs1,000 per ton imposed on cement, bringing total FED to Rs3,000 per ton.
  • GST Exemption Removal: For the FATA/PATA region.
  • Sales Tax Rate Increase: For POS retailers dealing in leather and textile products from 15% to 18%.
  • Petroleum Levy: Maximum limit enhanced for petrol and diesel to Rs80 per litre.
  • Custom Duties Exemptions Withdrawal: On CBU imports of hybrid vehicles.
  • Concession Withdrawal: On import of electric vehicles with value exceeding US$ 50,000.
  • Advance Tax on Motor Vehicles: Fixed for registration of vehicles above 2,000 cc.
  • Sales Tax Exemption: On iron and steel scrap.

Digital Economy

  • IT Sector Support: PKR 50 billion allocated to promote digitalization and innovation in the IT sector.
  • E-Governance: PKR 30 billion dedicated to implementing e-governance initiatives to improve government services and transparency.

New Proposals

  • National Fiscal Pact: Proposed with all provinces.
  • Late Filers: A new category introduced in the income tax law under the Finance Bill 2024.

Conclusion

The Budget 2024-25 reflects a balanced approach towards economic stability, growth, and development. By addressing key sectors such as infrastructure, education, healthcare, and social welfare, the government aims to create a resilient economy that can withstand global challenges and improve the quality of life for its citizens.

What do you think about the budget? Share your thoughts in the comments below!

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