Budget Comparison FAIZ AHMED SHAH (04) Budget comparison of 2014-15 and 2015-16 Ranger Campus – Islamia University, Bahawaplur BBA R1 Madam Maria
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Budget Comparison FAIZ AHMED SHAH (04)
Budget comparison of 2014-15 and 2015-16
Ranger Campus – Islamia University, Bahawaplur BBA R1 Madam Maria
Table of Contents
Contents Introduction _________________________________________________________________ 1
Budget 2014-15 at a glance ____________________________________________________ 2
Budget 2015-16 at a glance ____________________________________________________ 3
Salient Features (Budget 2014-15) _______________________________________________ 4
Salient Features (Budget 2015-16) _______________________________________________ 5
Comparison of Budget 2015-16 with 2014-15 ______________________________________ 6
Increase in the Prices (Food Items) ______________________________________________ 7
Criticism on Pakistan Budget 2015-16 ____________________________________________ 8
Challenges _________________________________________________________________ 9
Solutions __________________________________________________________________ 10
Conclusion_________________________________________________________________ 11
Pg. 01
Introduction
Introduction
Government budget
A Government Budget is a Government document presenting
the Government's proposed revenues and spending for a financial year that is
often passed by the legislature, approved by the chief executive or president
and presented by the Finance Minister to the nation.
Federal Budget 2014-15
The Federal budget 2014–15 was the federal budget of Pakistan for the fiscal
year beginning from 1 July 2014 and ending on 30 June 2015.
Presented and submitted by Finance Minister Ishaq Dar on 30 June 2014 at
the National Assembly, it was originally outlay ₨. 3.8 trillion Eventually it was
increased to ₨. 4.3 trillion After several recommendations were inserted on 21
June 2014. This is the second federal budget submitted during the tenure
of Prime Minister and his cabinet.
Federal budget 2015–16
Presented and submitted by Finance Minister Ishaq Dar on 5th June, 2015 at
the National Assembly. This is the second federal budget submitted during the
tenure of Prime Minister and his cabinet.
Pg. 02
Budget 2014-15 at a glance
Budget 2014-15 at a glance
Economic Survey 2014-15
Economy has done better than last year.
Inflation has remained all time low in any year in this decade. Foreign
exchange reserves improved substantially on account of increased
home remittances, issue of Sukuk, and decrease in import bill for oil,
privatization proceeds and receipt of the tranche from the donors. These
factors, inter alia, encouraged State Bank of Pakistan to bring discount
rate at all-time low of 7%, in the last 42 years.
On the other hand, manufacturing and agriculture sectors being principal
employment generating sectors have not shown desired improvements.
Exports have fallen even in value terms. Current years expected goals
in the private sector remained sluggish.
Foreign direct investment is expected in following years in infrastructure
sector by way of China-Pakistan economic Corridor (CPEC).
Pg. 04
Salient Features (Budget 2014-15)
Salient Features (Budget 2014-15) The budget 2014-15 has the following salient features:
The total outlay of budget 2014-15 is Rs 4,302 billion.
The resource availability during 2014-15 has been estimated at Rs 4,074 billion
The net revenue receipts for 2014-15 have been estimated at Rs 2,225 billion
The provincial share in federal revenue receipts is estimated at Rs 1,720 billion
during 2014-15
The net capital receipts for 2014-15 have been estimated at Rs 691 billion
The external receipts in 2014-15 are estimated at Rs 869 billion.
The overall expenditure during 2014-15 has been estimated at Rs 4,302 billion,
out of which the current expenditure is Rs 3,463 billion and development
expenditure is Rs 839 billion.
The share of current expenditure in total budgetary outlay for 2014-15 is 80.5%
The expenditure on General Public Services is estimated at Rs 2,543 billion
which is 73.4% of the current expenditure.
The size of Public Sector Development Program (PSDP) for 2014-15 is Rs
1,175 billion. Out of this, Rs 650 billion has been allocated to provinces.
Federal PSDP has been estimated at Rs 525 billion, out of which Rs 296 billion
to Federal Ministries / Divisions, Rs 176 billion to Corporations, Rs 12.5 billion
to Pak Millennium Development Goals and Community Development Program,
Rs 36 billion to Federal Development Program / Projects for Provinces and
Special Areas, and Rs 5 billion to Earthquake Reconstruction and
Rehabilitation Authority (ERRA).
The other development expenditure outside PSDP for 2014-15 has been
estimated at Rs 162 billion.
To meet expenditure, bank borrowing has been estimated for 2014-15 at Rs 228
billion
Pg. 05
Salient Features (Budget 2015-16)
Salient Features (Budget 2015-16) The budget 2015-16 has the following salient features:
The total outlay of budget 2015-16 is Rs 4,451.3 billion.
The resource availability during 2015-16 has been estimated at Rs
4,168.3 billion
The net revenue receipts for 2015-16 have been estimated at Rs
2,463.4 billion
The provincial share in federal taxes is estimated at Rs 1,849.4 billion
during 2015-16
The net capital receipts for 2015-16 have been estimated at Rs 606.3
billion
The external receipts in 2015-16 are estimated at Rs 751.5 billion.
The overall expenditure during 2015-16 has been estimated at Rs
4,451.3 billion, out of which the current expenditure is Rs 3,482.2 billion
and development expenditure is Rs 969 billion.
The share of current and development expenditure respectively in total
budgetary outlay for 2015-16 is 78.2% and 21.8%
The expenditure on General Public Services is estimated at Rs 2,446.6
billion which is 70.3% of the current expenditure.
The other development expenditure outside PSDP for 2015-16 has been
estimated at Rs 164.4 billion.
The size of Public Sector Development Program (PSDP) for 2015-16 is
Rs 1,513.7 billion. Out of this, Rs 813.7 billion has been allocated to
provinces. Federal PSDP has been estimated at Rs 700 billion, out of
which Rs 252.6 billion to Federal Ministries / Divisions, Rs 271.9 billion
to Corporations, Rs 20 billion to Pak Millennium Development Goals and
Community Development Program (MDGs), Rs 28.5 billion to Special
Federal Development Program, Rs 7 billion to Earthquake
Reconstruction and Rehabilitation Authority (ERRA), Rs 100 billion for
Special Development Program for Temporarily Displaced Persons
(TDPs) and Security Enhancement and Rs 20 billion for Prime Minister's
Youth Program.
To meet expenditure, bank borrowing has been estimated for 2015-16 at
Rs 282.9 billion
Pg. 06
Comparison of Budget 2015-16 with 2014-15
Comparison of Budget 2015-16 with 2014-15
The budget 2014-15 and 2015-16 has the following salient features:
The total outlay of budget 2015-16 is 149.3 billion more than budget
2014-15
The estimated resource availability during 2015-16 is 94.3 billion more
than budget 2014-15
The net revenue receipts (estimated) for 2015-16 are 238.4 billion more
than budget 2014-15
The provincial share (estimated) in federal revenue receipts 129.4 billion
more than budget 2014-15
The net capital receipts (estimated) for 2015-16 are 84.7 billion less
than budget 2014-15
The external receipts (estimated) in 2015-16 are 117.5 billion less than
budget 2014-15
The overall expenditure (estimated) during 2015-16 are 149.3 billion
more than budget 2014-15 out of which the current expenditure is 19.2
billion more than budget 2014-15 and development expenditure is 130
billion more than budget 2014-15
The share of current expenditure in total budgetary outlay 2.3% less
than budget 2014-15
The expenditure on General Public Services (estimated) is 96.4 billion
less than budget 2014-15 which is 3.1% less than budget 2014-15 of the
current expenditure
The size of Public Sector Development Program (PSDP) 338.7 billion
more than budget 2014-15 Out of this, 163.7 billion more than budget
2014-15 has been allocated to provinces
The other development expenditure outside PSDP for 2015-16
(estimated) 2.4 billion more than budget 2014-15
To meet expenditure, bank borrowing (estimated) for 2015-16 are 54.9
billion more than budget 2014-15.
Pg. 07
Increase in the Prices (Food Items)
Increase in the Prices (Food Items)
According to Ishaq Dar (Federal Minister for Finance)
The food items which registered increase in their prices are Moong Pulse
5.49%, Masoor Pulse 3.37%, Garlic 3.22%, Eggs 2.81%, Gram Pulse 1.27%,
Wheat 1.06%, Mash Pulse 0.84%, Sugar 0.28%, Chicken Farm 0.28%,
Bananas 0.11% and Wheat Flour 0.08%. The items which recorded decrease
in their prices are L.P.G 3.52%, Potatoes 2.33%, Gur 2.05%, Tomatoes 1.97%,
Onions 1.90%, Rice Irri-6 1.08%, Red Chili Powder 0.56%, Petrol 0.13%, Hi
Speed Diesel (HSD) 0.12%, Vegetable Ghee (Loose) 0.08% and Rice Basmati
Broken 0.07% while prices of Bread Plain, Beef, Mutton, Milk Fresh, Powdered
Milk Nido, Mustard Oil, Cooking Oil (Tin), Vegetable Ghee ( Tin) and Tea
(Lipton Yellow Label) remained stable.
According to T.V channels
Item Price (2014) Price (2015) Change
Moong Pulse 180 190 10
Masoor Pulse 127 143 16
Gram Pulse 60 90 30
Mash Pulse 138 170 32
Sugar 50 60 10
Wheat Flour 35 40 5
Milk 74 85 11
Potato 15 20 5
Onion 20 45 25
Tomato 60 80 20
Rice 170 175 5
Ghee 145 160 15
Pg. 08
Criticism on Pakistan Budget 2015-16
Criticism on Pakistan Budget 2015-16 According to the critics and opposition parties this budget is only the game of numbers and nothing. It was a repeated budget as usual.
• The growth rate of 5.5 % has been promised by the finance minister of
Pakistan for the fiscal year 2015-16. But what the people are not told is
how achievable actually is this target, keeping in view that the target set
in the previous year was also not achieved. The targets set in the
previous budget have mostly failed to meet the mark. It is surprising that
even higher targets are being set in this budget. How are they supposed
to be achieved is the question no one seems to be bothered with.
• The people are soon going to be hit with high electricity prices along with
long power outages as the subsidy on electricity is going to be withdrawn
as well.
• Every year the Defense budget gets a boost and this year it constitutes
16.2 % of the total budget.
• The minister very firmly said that the tax revenues will be achieved by
better collection of taxes and tight expenditure control but if we look, main
highlights of budget are observed and there seems to be no plan of
improving the system. All that can be seen is increasing the taxes and
putting more burdens on people.
• The mobile phones are going to be expensive as sales tax on them has
increased.
• The priorities of government should be clear in front of people. The reality
of unjust and unwise allocation of funds is often wrapped and hidden in
sentimental and sweet talk. If figures are kept in mind it seems that
railway and even the metro project is more important to this nation than
education as the budget allocation of railway triumphs that of education.
• Pakistan is an agricultural country and its agricultural sector also gets
ignored despite the fact that it employs 37 % of the labor
Pg. 09
Challenges
Challenges
1. Poor governance and corruption
Key factors that affected all sectors of the economy are poor governance
and corruption in the country
2. Economic Policies
Economic Policies of the government were total failure! Government has
shown lack of interest in resolving economic issues of the country.
3. We Consume More and Save Less.
Out of every hundred rupees of our national income, we consume 85 rupees
and save only 15 rupees, which means that the amount of money which is
available to invest for economic growth and advancement is too little.
Because to grow by 6%, you need at least 24-25% investment rate - and if
you want to rely on domestic savings, your saving rate should be 25%. We
have to at least double on savings rate otherwise we will remain dependent
on foreign sources.
4. We Import More and Export Less.
As a nation we prefer to use even the basic commodities of foreign countries
rather than locally manufactured goods. Unless we do not change this
attitude of preferring the imported goods we have to keep on relying on
outsiders to fill in this gap b/w our imports and exports. To lower this gap
between our export earnings and expenditure on imports we should
increase expending on our exports; our reliance on external sources should
be reduced.
5. We Face Energy and Water Shortages
6. Cost of Doing Business is high.
Pg. 10
Solutions
Solutions
1. Change our mindset
We as a nation are too much negative oriented and too much cynical where we find
everything wrong in this country. Unless we change our mindset and unless
everybody who is doing what he is supposed to do, carries out his or her task with
sincerity and honesty, we are not going to go anywhere. We should not expect any
Messiah to come and fix our problems we have to do it ourselves individually and
collectively. There are no short cuts available
2. Young labor force
Pakistan is one of the few countries which has a young labor force which can be
harnessed for its own and global economy. India and Pakistan are two countries
where the ratio of younger people to the older ones is going to increase. If we tool
these young men and women properly, we increase the female labor force
participation, give them skills and knowledge, they can become the labor force for the
rest of the world. This will give a big boost to Pakistan’s own economy.
3. Local governments
As the population is increasing, one cannot govern Pakistan sitting in Islamabad,
Karachi, Lahore, Peshawar or Quetta. One has to devolve powers, decentralize and
delegate authority, provide resources to the local/district governments so that they can
take decisions at their own. Those decisions would be very much in accordance with
the requirements and the needs of those communities. Sitting in Islamabad one
cannot visualize what is needed in Chaghi or Loralai, but the people in Loralai and
Chaghi know exactly whether they need water, fertilizers or fruit processing industry.
Let us devolve powers to the people at the grassroots level and there would be much
better allocation and utilization of resources. There must, however, be accountability
of the local governments by the provincial governments and of provincial governments
by the federal government but not interference or usurpation of powers.
Pg. 11
Solutions
Conclusion
Pakistan require extreme actions, inventive thinking and clear policies to get back on the
road of success, and present budget seems to fall short of that. This requires that the
government, which has got clear mandate, should stick firm to its own proposal, which
promised the people of Pakistan long lasting economic improvements. A budget is both a
reminder and a chance to put the money where the mouth is, but so far, the government
has shied away from following its own dream with veracity and vigour.
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