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Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
Budget 2014
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Budget 2014

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  • 1. ECONOMY OF PAKISTAN: 2013-14 Presentation by Sania Shahab Ramla Manzoor Qambrani Shoaib Anwer (Volunteer) Mansoor Ahmed Main Focus 1. Federal Budget: 2013-2014 2. Economic Challenges: 2014 3. Suggested Charter of Economy 1
  • 2. FEDERAL BUDGET: 2013-14 MASTER CHART (FEDERAL BUDGET 2013-2014) Particulars Rs. b % NEEDED 1. Current Expenditure 2892 79 2. ADP: 2013-2014 762 21 AVAILABLE 3,591 100 Net Federal Revenue 1,918 53.4 SHORTFALL 1,674* 46.6 3,591 100 FINANCING PATTERN 1.Capital Receipts (Net) 507 30 2. Bank Borrowings 975 58 3.External Receipts 169 10 4.Estimated Provincial Surplus 22 2 1,674* 100 2
  • 3. FEDERAL REVENUE BUDGET: 2013-14 FEDERAL REVENUE BUDGET 2013-14 Particulars Rs. b % CURRENT REVENUE 1. Indirect Taxes 1,622* 48 Composition Rs.b % Sales Tax 1,052 65 Custom Duties 279 17 Federal Excise 166 10 Others (Plus Petroleum Levy) 123 08 1,622* 100 2. Direct Taxes 976 28 2,598 76 3. Non-Tax Revenue 822 24 3,420 100 3
  • 4. FEDERAL REVENUE BUDGET: 2013-14 Rs. B % 4. Less: Transfer to Provinces 1,502 Net Federal Revenue 1,918 CURRENT EXPENDITURE 1. Debt Servicing 1,154 44 2. Defence Affairs & Services 627 24 3. Cost of Running Govt 275 10 4. Grants & Transfer to Provinces 337 13 5. Subsidies 240 09 2,633 100 Less: Deficit in Revenue Budget 1,651 892 4
  • 5. FEDERAL ANNUAL DEVELOPMENT PLAN 2013- 2014 ANNUAL DEVELOPMENT PLAN 2013-2014 Particulars Rs. b % DEVELOPMENT EXPENDITURE 1. Federal Govt: 2012-13 Departments (rs. 375b), Corporations (Rs. 114b) Special Programs (Rs. 5b) Special Areas (Rs. 36b) and ERRA* Rs. (10b) 540 69 2. Other Developments Expenditure 172 22 3. Provincial Governments 76 9 788 100 *Earthquake Rehabilitation & Reconstruction Authority 5
  • 6. FEDERAL ANNUAL DEVELOPMENT PLAN 2013- 2014 FINANCING PATTERN Rs.b % 1. Bank Borrowings 975 2. External Receipts 169 3. Estimated Provincial surplus 22 4. Net Internal Resources (1158)* 8* * Financing pattern will be revised. 6
  • 7. FEDERAL ANNUAL DEVELOPMENT PLAN 2013- 2014 BREAK UP OF INTERNAL RESOURCES Rs. b 1. Deficit in Revenue Budget for 2013-2014 1,651 2. Less: Net Capital Receipts (493) (1158)* 7
  • 8. PROVINCIAL ALLOCATION: 8TH NATIONAL FINANCIAL AWARD Province Allocated % Population* % Punjab 48 57.36 Sindh 27 23.71 KPK 16 13.82 Balochistan 09 5.11 100 100 *Based on Population Census of 1997. 8
  • 9. PAKISTAN: ECONOMIC CHALLENGES: 2014 A: Economy Challenges 2013 - 14 1. Business Environment: Deteriorating 2. Foreign Investment: Declining 3. Exchange Rate: Depreciating 4. Inflationary Pressure: Building Up 5. Foreign Exchange Reserves: Depleting 6. Industrialists relocating their Industries Abroad 7. Electricity and Gas Shortages: Aggravating 8. Relations with International Financial Institutions Including IMF: Deteriorating 9. Exports Growth: Turning Negative 10. Mysterious Growth in Remittances: Continuing 11. Economy Remaining the off radar Screen of the Government 9
  • 10. PAKISTAN: ECONOMIC CHALLENGES: 2014 B: Measures with Question Mark 8th NFC Award 1. New NFC Award diverted bulk of Federal Government Resources to Provinces at a time when they were needed more: a. To Finance Growing Interest Payment b. Security Related Expenditure c. Bailing out of PEs with losses d. Paying WAPDA/PEPCO to Finance their Inefficiencies 2. Tax System: Failure to Reform Taxation System and Broadening Tax Base to Generate more Tax Revenues. 10
  • 11. PAKISTAN: ECONOMIC CHALLENGES: 2014 B: Measures with Question Mark 3. Petroleum Products These are doubly taxed: a. Exchange rate depreciation has increased the landed cost of oil. b. Petroleum Development Levy (PDL) is levied on Inflated basis to mobilize more resources. 11
  • 12. PAKISTAN: ECONOMIC CHALLENGES 2014 C: 2014 Outlook Outlook for 2014 is Likely to Further Deteriorate. 1. Political uncertainty with adverse consequences on the economy. 2. Fiscal indiscipline hallmark of the Government during election year. 3. Mobilization through taxation will take the back seat. 4. Reliance on Non-Tax Revenues would increase further. 5. Expenditure is expected to rise further with budget deficit likely to be in the range of 6.5% to 7% of GDP. 6. Economy will remain out of focus of the political leadership. 7. Energy shortage (electricity and gas) to aggravate further. 8. Politics is likely to dominate economics. 12
  • 13. PAKISTAN: ECONOMIC CHALLENGES: 2014 D: Expected Trends 2015 1. GDP Trend : 3-4% 2. Domestic Investment : Not expected to Pick up 3. Unemployment and Poverty are likely to rise further 4. Inflationary pressure to rise on account of senseless increase in government administered prices 5. External balance of payments to come under pressure due to following: a. Flat, even negative export growth b. Search in payment to the IMF c. FDI to witness a sharp decline d Sharp depreciation of exchange rate e. Public debt is likely to worsen on account of large fiscal deficit. 13
  • 14. PAKISTAN: ECONOMIC CHALLENGES: 2014 E: Consequences 1. National Security at Stake 2. Miss-Governance to Continue 3. In Search of a Direction 14
  • 15. SUGGESTED CHARTER OF ECONOMY 1. Domestic Resource Mobilization 2. Income Tax by All 3. Self Reliance for Financing 4. ADP Financing 5. Provincial Govt Budgets 6. Public Enterprises Losses 7. Good Governance & Corporate Governance 8. Inflationary Impact: Salary increase 9. Professionals Role 10. Holistic approach to Economic Development with equitable distribution of wealth and income across the board 15

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