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
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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
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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
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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
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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
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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.
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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)*
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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.
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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
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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.
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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.
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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.
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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.
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14. PAKISTAN: ECONOMIC CHALLENGES: 2014
E: Consequences
1. National Security at Stake
2. Miss-Governance to Continue
3. In Search of a Direction
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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
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