federal budget of pakistan 2015-16

Federal budget

Definition of a Budget

A budget is a microeconomic concept that shows the tradeoff made when one good is exchanged for another.

An estimation of the revenue and expenses over a specified future period of time.

A budget can be made for a person, family, group of people, business, government, country, multinational organization or just about anything else that makes and spends money.

What is Govt. budget

A govt. budget is a govt. document presenting the govt. proposed revenues and spending's 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 • The federal budget is a country is determined yearly and

forecasts the amount of money that will be spent in a variety of expenses in the upcoming year.

The Budget Cycle

Each year, the budget follows a predetermined cycle:

Preparation of the budget

Consideration, debate and approval of budget

Communication of Grants

Budget implementation / Execution

Post budget Allocation

Budget auditing

The Budgeting Process

Executive Budget

Prepared by chief executives or the president within a government's executive branch, the governor at the state level, the county executive at the county level, and the mayor at the municipal level.

Legislative Budget

Prepared by a body of elected representatives, the state legislature or city council.

Types of Budget

Capital

Operating

Line-Item

Performance

Zero-Based

Public Budgets

Capital Budget

Operating Budget

Capital Budget

• 'Capital Budgeting' The process in which a business determines whether projects such as building a new plant or investing in a long-term venture are worth pursuing.

A long-term plan that deals with the financing of capital projects, investments that include buildings, bridges, and quality of life projects such as parks.

Financed through borrowing, usually in the form of bonds. States, counties, municipalities issue bonds to raise revenue.

Investors buy the bonds and earn interest on them.

Operating Budget

A short-term, year-to-year budget that plans how resources be allocated for government agencies and programs.

Based on estimates of income and expenses associated with the organization’s operations.

Administration, marketing, labor, manufacturing, and any other production associated costs are included, whereas long-term items such as capital debt and income not associated with company operations, such as investments are excluded.

Line-Item Budget

Most popular among local governments, given its relative simplicity.

Illustrates where public money will be spent item by item.

The amount that will be spent is clearly defined to keep spending under control.

Simple tool for keeping tabs on where money goes, ensuring that funds are spent appropriately.

Personnel costs, office supplies, and the like are projected each year and are lined up beneath one another.

Performance Budget

Commonly used by the government to show the link between the funds provided to the public and the outcome of these services.

Allocation of funds and resources are based on their potential results.

Place priority on employees' commitment to produce positive results, particularly in the public sector.

Reflects the input of resources and the output of services for each unit of an organization.

Zero-Based Budget

Starts from a "zero base" and every function within an organization is analyzed for its needs and costs.

Budgets are then built around what is needed for the upcoming period.

All expenses must be justified for each new period.

All departments must defend their programs and consequently their level of funding each year.

Department head must demonstrate how different levels of funding would impact the delivery of a given program’s services.

Budget Surplus

Budget Surplus = Savings

A company's or individual's income exceeds its expenditures over a particular period of time.

The amount by which government revenues exceed government spending.

A surplus is considered a sign that government is being run efficiently.

Used to pay off debt, save for the future, or to make a desired purchase that has been delayed.

Budget Deficit

Budget Deficit = Shortfall

A company’s or individual's liabilities exceeds its assets over a particular period of time.

The amount by which government spending exceeds income in any one fiscal year.

Financed by borrowing money and paying interest on the borrowed funds.

Program Spending

Discretionary Spending

Programs that are deem discretionary must have funding approved each year. ie. Defense, Education, and Housing

Entitlement Spending

Funding for entitlement programs are mandated by law. ie. Social Security and Medicare

Federal budget of Pakistan 2015 - 16

Govt. to target industry, agriculture in budget 2015 - 16

Federal Minister for planning and development Ahsan Iqbal has said that government’s main target in budget 2015-16 is to strengthen industrial and agriculture sectors through incentives. Talking to a private news channel, the minister informed that the government would achieve 5.5 percent growth rate this year, next year 6 to 6.5 % and it will try to achieve 7.5 percent growth rate in third fiscal year.

 PAK Budget 2015-2016 Highlights

Highlights

Highlights

Highlights

Highlights

Highlights

Highlights

Khyber pakhtunkhawa package

• Exemption in taxes• KPK allowed to do business with Afghanistan in Pakistani rupee.• 7.5% increase in Govt. employees salaries.• sales tax on agricultural machines to be reduced from 17% to

7%.

Criticism on Pakistan Budget 2015-16

• 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.

• Every year the Defense budget gets a boost and this year it constitutes 16.2 % of the total budget.

• 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

Challenges

• 1. Poor governance and corruption • 2. Economic Policies • 3. We Consume More and Save Less. • 4. We Import More and Export Less. • 5. We Face Energy and Water Shortages • 6. Cost of Doing Business is high.

The End

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