Finance Minister Muhammad Aurangzeb unveiled Pakistan’s Federal Budget for the fiscal year 2024-25 on Wednesday, outlining a comprehensive plan aimed at stabilizing and growing the economy. The budget sets ambitious targets, including a GDP growth rate of 3.6%, controlling inflation at 12%, and maintaining a budget deficit of 5% of GDP. Here are the key takeaways from the budget:
Economic Targets and Objectives
- GDP Growth: The government has set a growth target of 3.6% for the upcoming fiscal year.
- Inflation: Efforts are in place to keep inflation at 12%.
- Budget Deficit: The budget deficit is aimed to be capped at 5% of GDP.
Strategic Measures
- Income and Expense Management: The budget focuses on increasing national income and reducing unnecessary government expenditures.
- Market-Driven Economy: A significant shift towards a market-driven economic model is planned, reducing government control.
- Sectoral Reforms: Reforms in the pension system, privatization of state-owned enterprises, and boosting the agriculture and IT sectors are key measures.
Budget Outlay and Expenditures
- Total Budget Outlay: Rs. 18.877 trillion, marking a 30% increase from the previous year.
- Current Expenditure: Proposed at Rs. 17,203 billion, reflecting a 29% increase.
Social and Economic Support
- Minimum Wage: Increased from Rs. 32,000 to Rs. 37,000.
- Support for Vulnerable Groups: Targeted measures to protect vulnerable segments from inflation and economic instability.
- Youth and Education: Focus on youth education and skill development to bolster future growth.
Tax Policy and Revenue
- Tax Base Expansion: Initiatives to increase the tax base and digitize the economy.
- Progressive Taxation: Implementation of progressive taxation policies to ensure fair tax distribution.
- Transaction Taxes: Increase in transaction taxes for non-filers to improve compliance.
- Federal Revenue: Projected total revenue of Rs. 17,815 billion, with a net revenue of Rs. 10,377 billion after provincial transfers.
Economic Reforms and Investments
- Regulatory Easing: Measures to ease regulatory frameworks to attract business investment and increase exports.
- Private Sector Strengthening: Efforts to reform the external sector and strengthen the private sector’s role in the economy.
- Energy and Agriculture: Targeted reforms in the energy and agriculture sectors to improve efficiency and output.
Equity and Inclusion
- Inclusive Growth: Emphasis on equity and inclusion in economic reforms, integrating green and gender-responsive budgeting practices.
The 2024-25 budget underscores the government’s commitment to ensuring stability, growth, and the efficient functioning of the public sector. By focusing on a market-driven economy and inclusive growth, Pakistan aims to build a resilient economic framework that supports all segments of society.
