Finance Minister Ishaq Dar has made his way to Parliament along with his colleagues to present the country's budget for the upcoming fiscal year 2016-17 (FY16-17) on Friday. The budget is being announced through a televised speech which is traditionally the highest rated broadcast event of the year.
Turnout of government lawmakers in the budget session is low as Dar begins his fourth budget speech in the premier’s absence. In a joint meeting, the opposition earlier today decided not to obstruct the finance minister while he is delivering the budget.
All eyes are on the government’s proposals to rescue agriculture from its doldrums. With Dar conceding that the sector reported negative growth of -0.19 per cent dragging the economy down and promising action, there are expectations that today's budget will show some new thinking to spur growth in the sector.
Below are major targets for FY16-17:
KEY TARGETS
TOTAL EXPENDITURE
Announcing the budgeted expenditure for the next fiscal year at Rs 4.39 trillion, Dar pointed out that it translated into a rise of over 7% compared to last year.
GDP GROWTH
Finance Minister Ishaq Dar, while outlining the economy's performance in the past two years said "in the past two years progress went over 4pc and reached 4.7pc – the highest in 8 years."
"This would have been better if the cotton crop hadn't suffered a fall in growth of 28pc."
He announced that the government had targeted growth of 5.7pc for fiscal 2016-17, with an even more ambitious target of 7% growth for fiscal year 2017-18.
INFLATION
FISCAL DEFICIT
The finance minister said the government is targeting to restrict the fiscal deficit at 3.8% of the GDP next year, which he said will be further narrowed to 3.5% of the GDP by 2017-18.
TAX REVENUE
Talking about the budgeted tax revenue, Dar said: "Tax collection has increased 7pc which is historic. We will reach our target of Rs3.96tr and we want to push the tax-to-GDP ratio to over 10pc next year."
In the longer run, Dar said the government wants to push this ration up to 14pc.
DEVELOPMENT
The Pakistan Economic Survey on Thursday showed that the government had missed last year's budgeted GDP growth target by a wide margin, mostly owing to a dismal performance by the agricultural sector.
But this was compensated by the industrial sector as the construction and electricity sectors outperformed expectations.
The services sector grew at par with the set target, bolstered by an increase in salaries of government employees and defence servicing.
