Tag: IMF

  • Schools, offices closed for two weeks in Sri Lanka

    Schools, offices closed for two weeks in Sri Lanka

    Due to a fuel shortage, the Sri Lankan authorities on Friday announced a two-week shutdown of government offices and schools.

    “Taking into consideration the severe limits on fuel supply, the weak public transport system, and the difficulty in using private vehicles, this circular allows minimal staff to report to work from Monday,” said Sri Lankan Public Administration Ministry.

    However, essential employees will continue working.

    Meanwhile, the Sri Lanka Education Ministry said on Thursday that schools will be closed for two weeks due to persistent power outages. However, the ministry said the schools should conduct online classes, if possible.

    Sri Lanka has been experiencing roughly 12- to 13-hour-long blackouts for months.

    Sri Lanka went into default on its $51 billion foreign debt in April and is currently negotiating a bailout with the International Monetary Fund (IMF).

  • Ahsan Iqbal’s remarks about cutting down chai consumption make international headlines

    Ahsan Iqbal’s remarks about cutting down chai consumption make international headlines

    Federal Minister for Planning and Development Ahsan Iqbal’s recent statement about cutting down on tea has not just taken social media by storm but international media has widely covered his remarks.

    “I appeal to the nation to reduce tea intake by one or two cups daily because we borrow money for tea import as well,” said Ahsan Iqbal on Tuesday.

    People in Pakistan urged to drink fewer cups of tea was how BBC covered it.

    CNN’s headline says: Pakistanis told to drink less tea as nation grapples with the economic crisis

    People in Pakistan urged to drink fewer cups of tea, was how Iqbal’s statement was covered by the Saudi Gazette.

    AlJazeera also reported Ahsan Iqbal’s statement: Pakistan minister slammed for ‘drink less tea, save money’ appeal

    Turkish news media outlet TRT also did a story and a video on the same with the title: Pakistan minister stirs controversy with ‘drink less tea, save money’ plea

    Indian media also jumped in and did a news piece with the title: Pak Minister Asks Citizens To Drink Less Tea As Economy Faces Loan Burden: Report

    The Print wrote: ‘First roti, now tea? Pakistan’s angry response to the minister who wants them to drink less

    ABC Australia did a video report on Ahsan’s statement.

    ‘Cutting chai’ | Pakistan Minister urges people to reduce tea consumption, wrote The Hindu.

  • Intra-day trade: Pakistani rupee touches Rs207.7 against US dollar

    Intra-day trade: Pakistani rupee touches Rs207.7 against US dollar

    In intra-day trade in the inter-bank market on Thursday, the local currency sank to Rs207.7 against the US dollar, continuing its downward trend.

    The rupee hit an all-time low against the dollar on Wednesday, closing at Rs206.46.

    This was partly due to the strengthening of the dollar on the international stage, but it was also due to the local currency market anticipating a greater increase in inflation.

    Finance Minister Miftah Ismail had previously stated that the government’s budget for 2022-23, which was announced last week, failed to persuade the International Monetary Fund (IMF) to disburse the next tranche of Pakistan’s $6 billion loan programme, and that changes to the finance bill would be required.

    The finance minister has declared unequivocally that the IMF is dissatisfied with the budget and that it will be revised.

    Experts believe that the rupee would only stabilise if the amendments are put into the Finance Act. He predicted that the local currency will remain volatile in the coming days.

    Pakistan’s government announced a third increase in petroleum prices in less than three weeks late Wednesday, as it tries to placate the IMF, which has emphasised the elimination of energy subsidies in order to resuscitate its bailout programme.

    The next payment of the IMF scheme is slated to give Pakistan $900 million, but the global lender has put the programme on hold due to a variety of circumstances, including fuel subsidies and a worsening current account deficit. It has also stated that greater direct taxes are required.

  • Pakistan pushed into darkness due to Europe’s decision to cut off Russian fuel

    Pakistan pushed into darkness due to Europe’s decision to cut off Russian fuel

    The European attempt to abandon Russian oil is intended to punish Moscow for its invasion of Ukraine. It’s also wreaking havoc thousands of miles away, throwing Pakistan into darkness, destabilising one regime, and jeopardising the country’s new leadership’s stability.

    According to Bloomberg, Pakistan invested heavily in liquefied natural gas and inked long-term contracts with Italian and Qatari suppliers. Some of those suppliers have now defaulted, although continuing to sell into the more lucrative European market, putting Pakistan in the very situation it hoped to avoid.

    The country took particular precautions a decade ago to protect itself from the sorts of price increases that are currently shaking the market.

    Last month, the government spent about $100 million on a single LNG shipment from the spot market to avert outages during the Eid holiday, a record for the cash-strapped country.

    The country’s LNG costs could reach $5 billion in the fiscal year ending in July, more than double what they were a year ago. Even still, the government is powerless to protect its citizens: the IMF is in talks to bail out the country on the condition that it reduces fuel and energy subsidies.

    Outages lasting more than 12 hours

    Parts of Pakistan are currently suffering scheduled blackouts lasting more than 12 hours, reducing the ability of air conditioning to provide respite during the current heat wave. The former prime minister continues to gather enormous audiences to demonstrations and marches, exacerbating voters’ discontent with 13.8 per cent inflation. The hosts of prime-time talk shows frequently discuss how Pakistan will obtain the petroleum it requires and how much it would have to spend.

    The administration introduced a fresh set of energy-saving measures last week. Civil servants were relieved of their normal Saturday shifts, and the security budget was slashed by half.

    Prime Minister (PM) Shehbaz Sharif remarked in an April tweet before of the Eid holiday, “I am acutely aware of the sufferings people are facing”. That same week, he ordered his government to resume purchasing costly overseas natural gas shipments.

    He also warned earlier this month that they don’t have the money to keep importing gas from other countries.

    Rerouted supply to power plants

    There will be more than just outages as a result of the supply shortage. The government has rerouted existing natural gas supply to power plants, causing fertiliser manufacturers to be shortchanged. This approach could jeopardise the next harvest, resulting in even higher food prices the following year. Backup generators are being used by cellphone towers to keep service going during the blackouts, but they, too, are running out of fuel.

    There’s not much hope in the future. LNG prices have risen by over 1,000 per cent in the previous two years, first due to post-pandemic demand and subsequently due to Russia’s invasion of Ukraine. Russia is Europe’s largest natural gas supplier, and the possibility of supply disruptions pushed spot rates to an all-time high in March.

    Increasing LNG demand in Europe

    Meanwhile, Europe is increasing its need for LNG. Europe’s LNG imports have increased by 50 per cent so far this year compared to the same period last year, and show no signs of slowing down. As they cut ties with President Vladimir Putin’s regime over the crisis in Ukraine, European Union policymakers created a plan to considerably increase LNG deliveries as an alternative to Russian gas.

    Floating import terminals are being built at a breakneck pace in countries like Germany and the Netherlands, with the first ones set to open in the next six months.

    “Europe is draining LNG from the rest of the globe,” according to Steve Hill, executive vice president of Shell Plc, the world’s largest LNG trader. “However, this means that less LNG will be sent to developing markets”.

    Pakistan was formerly thought to be the LNG industry’s bright future. Demand for the fuel had peaked in developed markets by the mid-2010s. However, technological developments had reduced the costs and time it took to build import terminals, and new gas sources had reduced the cost of the fuel itself.

    Poor nations could finally contemplate the gasoline at the new, lower prices. Suppliers flocked to these new markets, and when Pakistan published a request for long-term LNG supply, over a dozen businesses competed for the contract.

    Pakistan chose Italy’s Gunvor Group Ltd to sell LNG to the country for the next decade in 2017. The terms were favourable at the time, and the prices were lower than those of a comparable arrangement struck with Qatar the previous year.

    Delay in supplies

    However, due to the rise in European gas prices, the two suppliers have postponed more than a dozen shipments slated for delivery between October 2021 and June 2022.

    According to Bruce Robertson, an expert at the Institute for Energy Economics and Financial Analysis, such defaults are nearly unheard of in the LNG market. Bloomberg spoke with traders and industry insiders who couldn’t recall the last time so many cargoes were rejected without being linked to a big outage at an export terminal.

    Eni and Gunvor stated they had to cancel because they were experiencing their own supply problems and didn’t have enough LNG to export to Pakistan. When exporters confront such difficulties, they typically replace deliveries by purchasing a consignment on the spot market, but Eni and Gunvor have not done so.

    Vendors are generally averse to cancelling orders. It harms the company connection and is often extremely costly. In established markets, fines for “failure to deliver” might be as high as 100 per cent.

    “It’s quite rare for LNG suppliers to renege on long-term contracts beyond force majeure occurrences,” says Valery Chow, an analyst at Wood Mackenzie Ltd.

    Pakistan’s contracts stipulated a lower cancellation penalty of 30 per cent, most probably in exchange for cheaper overall costs. The European spot market prices are currently high enough to more than compensate for the penalties.

    Pakistan’s $12 million LNG supply contract

    As per sources, an LNG supply to Pakistan for delivery in May under a long-term contract would cost $12 per million British thermal units. In comparison, spot cargoes to Europe for May delivery were trading for more than $30. Eni and Gunvor have kept their promises to customers in the region.

    As a result, Pakistan is back to square one, in a weaker negotiation position than before. After a dispute with Pakistan’s army over a variety of problems, including his management of energy supply and the greater economy, Prime Minister Imran Khan was deposed in April.

    Shehbaz Sharif, the new prime minister, has directed the state-owned importer to obtain the petroleum at any cost in order to end the debilitating blackouts. It’s also attempting to reach new long-term LNG purchase agreements, albeit the conditions will almost probably be harsher than six years ago.

    High risk of default

    The cost is having its own cascading repercussions. The government is now “at high risk of default,” according to a paper published last month by the Institute for Energy Economics and Financial Analysis. Moody’s Investors Service reduced Pakistan’s outlook from stable to negative, citing financial worries including a potential IMF bailout delay.

    Pakistan’s dependency on LNG, as well as its suppliers’ tendency to default, has exacerbated the country’s energy dilemma. Pakistan isn’t alone in this regard. Emerging economies all around the world are trying to meet their residents’ requirements while staying within their budget restrictions.

    It has also prompted them to purchase electricity from Russia, reducing the impact of Europe’s attempts to isolate them.

    Pakistan seeks LNG supply contract with Russian companies

    According to reports, Pakistan is also looking at long-term LNG supply agreements with Russian companies. India has already increased its purchases from Russia, and this trend is likely to continue. The government has directed power plants to purchase fuel from overseas in response to the scorching summer heat.

    Other cash-strapped importers, such as Bangladesh and Myanmar, are likely to suffer as a result of Pakistan’s problems. Bangladesh’s state-owned utility recently purchased the country’s most expensive LNG shipments on the spot market to keep the grids functioning and industry stocked, while Myanmar has stopped importing LNG for the past year owing to price increases.

    Other nations, such as India and Ghana, may be prompted to reconsider long-held plans to increase their reliance on super-chilled fuel as a result of Europe’s major change. Instead, governments would increase their reliance on polluting coal or oil, thwarting efforts to meet ambitious emission reduction objectives this decade.

  • Pakistani rupee falls to a new all-time low of Rs205 against the US dollar

    Pakistani rupee falls to a new all-time low of Rs205 against the US dollar

    In the interbank market today, the Pakistani Rupee (PKR) plummeted below its previous record low versus the US Dollar (USD).

    The local currency lost Rs1.30 in the interbank market today, depreciating by 0.63 per cent against the US dollar and closing at Rs205.16. During today’s open market session, the local currency reached an intraday high of Rs203.75 versus the US dollar.

    The PKR was trading between Rs206 to Rs208 against the US dollar in the evening. The rupee’s devaluation was in line with market expectations, with traders expecting the local currency to fall even lower if Pakistan fails to persuade the International Monetary Fund (IMF) on its fiscal year 2022-23 budget.

    The Financial Action Task Force (FATF) meeting in Berlin, which starts today, is another reason that is likely to have influenced the FX market. On the 15th and 16th of June, issues concerning Pakistan will be discussed.

    In today’s interbank market, the PKR reversed gains versus the majority of major currencies. It fell 22 paisas against the Canadian dollar (CAD), 34 paisas against the Saudi riyal (SAR), 35 paisas against the UAE dirham (AED), 62 paisas against the British pound sterling (GBP), and Rs1.25 versus the Euro (EUR).

  • Govt announces Rs3 billion subsidy to provide ghee at discounted rate

    Govt announces Rs3 billion subsidy to provide ghee at discounted rate

    The Minister for Information and Broadcasting Marriyum Aurangzeb announced on Monday that the government would provide a Rs3 billion subsidy to lower the price of ghee to assist the masses.

    She told a press conference that the market price of ghee is currently Rs550 per kg, but it is being sold at Rs300 per kg in utility stores across the country, according to AAJ News

    “The government is bearing a cost of Rs250 per kg,” she added, adding that the price of ghee was Rs150 per kg when the Pakistan Muslim League-Nawaz (PML-N) handed over the office to the Pakistan Tehreek-e-Insaf (PTI) in 2018.

    On the other hand, the government has increased the price of ghee and cooking oil at other retailers.

    She further stated that a 10 kg wheat bag could be purchased for Rs400 at any utility store in Pakistan.

    The minister said that on June 6, about one hundred mobile vans were added to the Utility Stores Corporation (USC) network, citing residents of Khyber-Pakhtunkhwa (KP) having difficulty obtaining discounted items due to limited distribution of utility stores.

    9,500 new utility stores

    “In addition, on June 9, 500 new USC stationary stations were set up to deliver wheat, and 100 more items are being added today,” she stated. “Since June 6, the USC network has grown by 700 units”.

    Price control committees have also been established, according to her, to keep hoarding and reselling of USC materials under check. The availability of items at utility retailers, she said, was also being watched.

    The minister stated that Rs17 billion had been set aside to give the public with low-cost sugar, ghee, and wheat.

  • IMF rejects proposed tax relief for the salaried class

    IMF rejects proposed tax relief for the salaried class

    The International Monetary Fund (IMF) has rejected the government’s proposed tax cut in the Personal Income Tax (PIT) to the tune of Rs47 billion, leaving the government with no choice but to reconsider amendments in order to revive the remaining funds.

    According to The News, the Federal Board of Revenue (FBR) granted relaxation to salaried workers earning up to Rs1.2 million annually, top official sources claim that the IMF has expressed strong misgivings about the planned PIT rate.

    To assist the urban middle class, the International lender recommends that the assistance be limited to persons earning up to Rs0.2 million per month, and that tax rates in other slabs be raised afterward.

    Compensation in PTI’s tenure

    During the sixth review under the PTI-led government, the FBR offered compensation to those making up to one million rupees per month in salary in the budget for 2022-23 through Finance Bill 2022 in Parliament, which was set as a structural benchmark under the Fund agreement. If the proposed PIT rates are not adjusted, it could become a major roadblock to reaching an agreement with the IMF at the staff level.

    The international lender intended to improve tax collection by Rs125 billion by putting PIT in a progressive manner, but the government went the other way, making it impossible for both parties to get a staff-level agreement under the $6 billion Extended Fund Facility (EFF) with the current PIT proposal.

    Proposed tax for salaried class in Finance Bill 2022

    According to the Finance Bill 2022, those earning up to Rs1.2 million will pay only Rs100 in tax. Previously, those earning up to Rs800,000 per year had to pay Rs10,000, those earning up to Rs1.2 million Rs30,000, and those earning up to Rs2 million Rs120,000. According to the suggested rate, a salary employee earning Rs2 million per year will only have to pay Rs56,000.

    The tax burden for salary earners up to Rs3 million was formerly Rs282,000 per year, but now it is projected to be Rs159,000. Up to Rs4 million in salary, a salary earner had to pay Rs470,000 in income tax, but under the proposed rate, the tax payment is reduced to Rs304,000. The tax due for a salary earner earning up to Rs5 million was Rs670,000, but it was cut to Rs479,000 under the proposed rate.

    The Finance Bill 2022 recommends providing relief up to Rs one million in salary earner who had to pay Rs1.845 million in tax, but now the tax burden has been lowered to Rs1.554 million for salary income up to Rs one million per month under the proposed Finance Bill 2022. The planned tax rates were amended upward in the remaining slabs up to Rs20 million, Rs40 million, Rs60 million, and Rs80 million.

    Increased taxable limit

    The FBR increased the taxable ceiling limit from Rs600,000 to Rs1,200,000 in the Finance Bill 2022, and the number of slabs in the PIT regime was decreased from 12 to 7.

    Where the taxable income does not exceed Rs600,000, there would be no tax, according to new slabs imposed for the salaried class. A tax of Rs100 would be levied on taxable income exceeding Rs600,000 but not exceeding Rs1,200,000.

    There would be a 7 per cent tax on the amount beyond Rs1,200,000 if the taxable income exceeds Rs1,20,000 but not Rs2,400,000.

    If an individual’s taxable income is over Rs2,400,000 but not over Rs3,600,000, you would be charged Rs84,000 plus 12.5 per cent of the amount over Rs2,400,000 per year. The FBR will levy a tax of Rs234,000 plus 17.5 per cent of the amount over Rs3,600,000.

    If the taxable income is more than Rs6,000,000 but not more than Rs12,000,000, the FBR will deduct Rs654,000 plus 22.5 per cent of the amount over Rs6,000,000.

    When taxable income reaches Rs12,000,000, the FBR will assess a tax of Rs2,004,000 plus 32.5 per cent of the amount over Rs12,000,000 every year.

  • Govt unveils Rs9.5 trillion budget 2022-23, focused on sustainable growth

    Govt unveils Rs9.5 trillion budget 2022-23, focused on sustainable growth

    The federal budget for 2022-23 has been revealed with a total outlay of Rs9,502 billion. It includes measures for sustainable economic growth, industrial and agricultural development, and aid for the poor ones.

    Finance Minister, Miftah Ismail began his address by claiming that the PTI administration had left Pakistan’s economy in shambles and harmed investor confidence by often switching finance ministers and monetary policies.

    He slammed former Prime Minister Imran Khan, claiming that he never cared about the poor, claiming that “keeping an eye on potato and tomato prices is not a PM’s duty”.

    He claims that the governing party took control of the country despite the fact that it will have to make difficult decisions to save the economy, which will affect their individual parties’ appeal, but they chose to put the country’s interests ahead of their own.

    Relief for working class and the poor

    He claimed that the budget is geared at providing greater relief to the working class and the poor, as opposed to the wealthy, because the working class prefers to buy local products over foreign ones, boosting the economy.

    Budget 2022-23, according to Miftah Ismail, will concentrate on offering facilities to farmers planting crops that supply cooking oil, such as corn and sunflower, so that the country does not need to import palm oil, which is at an all-time high in the worldwide market.

    Slashing furniture, stationary expenses in govt offices

    Considering the current economic downturn, the administration has decided to restrict operational expenditures to the absolute minimum, and that new furniture and stationary for government offices will be completely prohibited. Other than obligatory diplomatic visits, all government-sponsored foreign trips will be prohibited.

    Education

    The government has set aside Rs65 billion for the Higher Education Commission (HEC) in the current budget. In addition, the HEC has been granted Rs44 billion for development programmes, which is 67 per cent more than the previous year.

    Miftah Ismail said that this is a demonstration of our commitment to the youth. We are encouraging provinces to completely fulfill their obligations in terms of higher education promotion in the coming years, he said. The HEC budget includes 5,000 scholarships for Balochistan and tribal district students. He added that a unique scholarship programme has been introduced for Balochistan’s coastal communities.

    The Finance Minister said that 100,000 laptops would be provided to students around the country on affordable instalments. Funds have also been set aside for the purchase of cutting-edge equipment to improve engineering and technology education.

    15 per cent Increase in govt employees’ salaries

    In Budget 2022-23, Miftah Ismail announced a 15 per cent increase in government employee salaries, as well as the merger of adhoc allowances.

    He said that the tax on savings certificates, pensioners’ benefit accounts, and martyrs’ family assistance accounts had been reduced from 10 per cent to 5 per cent.

    Small merchants will be subject to a new fixed income and sales tax regime, according to the Minister. Electricity bills would be used to collect taxes ranging from Rs3,000 to Rs10,000 under this method. This will be a final agreement, and FBR will have no right to inquire about the tax.

    According to Miftah Ismail, a proposal has been made to increase initial depreciation rates for industries and other businesses from 50 per cent to 100 per cent in the first year.

    Furthermore, he stated that any tariffs imposed on industrial units during the import of raw materials will be considered adjustable in order to protect the business community’s working capital.

    New industrial policy

    He stated that an industrial policy is being implemented in partnership with the Asian Development Bank in order to boost the country’s industrial base. He stated that the Prime Minister has directed that all exporter claims be resolved as soon as possible.

    A sum of Rs40.5 billion is due to them right now, and we will pay it as soon as possible. Regardless of financial challenges, sales tax refunds are issued swiftly. Industrial feeders have been spared from load-shedding, according to him, in order to ensure that the industrial sector has uninterrupted power supply.

    A new strategy for promoting investment in the country is being developed which aims to provide an enabling atmosphere for investors by eliminating the lengthy procedure. The government will overhaul the dispute settlement structure to make it easier for domestic and foreign investors.

    Boosting agriculture sector

    Talking about the agriculture sector, Finance Minister stated that Rs21 billion had been set aside to boost agriculture and livestock productivity. He stated that the Ministry of Food Security, in consultation with the Planning Commission and the provinces, has developed a three-year growth strategy. This plan aims to increase agri-production, increase farmer prosperity, and promote smart agriculture and self-sufficiency.

    National Youth Commission

    The Finance Minister also announced the development of a National Youth Commission to help youth realise their full potential. Various plans for the youth, he noted, have been offered. He stated that a coordinated strategy is being implemented to strengthen the role of educated youth in the growth of the country. According to him, the youth employment initiative will create over two million job chances.

    He added that a scheme to foster youth entrepreneurship will be launched, under which interest-free loans of up to Rs500,000 and loans of up to Rs25 million will be made available on easy payments. He stated that in this lending arrangement, a 25 per cent quota has been been aside for women. He stated that women will be given precedence in hi-tech training in order to achieve economic empowerment. Youth development centres would be set up over the country, he said.

    A green youth movement would be launched to involve young people in environmental initiatives. Funds will be set aside to distribute laptops on a merit-based and instalment basis, as well as the construction of 250 mini-sports stadiums across the country. Miftah Ismail stated that an innovation league would be established in order to improve the youth’s potential. He said that a talent quest and sports drive programme will be developed for youngsters between the ages of eleven and twenty-five.

    Reduction in govt spending

    According to the Finance Minister, the current government’s top focus is austerity. This budget includes a reduction in government spending, and we are taking meaningful moves in that direction. He stated that automobile purchases will be completely prohibited. Apart from development initiatives, procurement of furniture and other products would be prohibited. Cabinet members and government officials will have their gasoline quotas lowered by 40 per cent. There will also be a ban on international tours paid for by the government, with the exception of the most important ones.

    A medium-term macroeconomic framework has been established to put the economy on a road of development, according to the Finance Minister. He emphasised his belief that by implementing this framework, we will be able to steer the economy in the right way. Our biggest problem, he remarked, is to expand without a current account deficit. As a result, a minimum of 5 per cent will be obtained without disrupting the balance.

    Improved fiscal and monetary policy

    He said that the GDP will increase from Rs67 trillion to Rs78.3 trillion in the coming fiscal year and the government is attempting to lower inflation through improved fiscal and monetary policy. During the next fiscal year, inflation will be decreased by 11.5 per cent.

    He predicted that the tax-to-GDP ratio will rise to 9.2 per cent in the coming fiscal year, up from 8.6 per cent now. He noted that in 2017-18, we had kept this ratio at 11.1 per cent. He stated that the overall deficit, which is currently at 8.6 per cent, will be steadily reduced. In the coming fiscal year, this will be reduced to 4.9 per cent. Similarly, the overall primary balance, which presently stands at -2.4 per cent of GDP, will be reduced to 0.19 per cent.

    Import and export

    Imports, which are estimated to be $76 billion this fiscal year, would be lowered to $70 billion the following fiscal year, according to the Finance Minister. Exports are currently $31.3 billion, but will increase to $35 billion in the coming fiscal year. The current account deficit will be decreased from -4.1 per cent of GDP to -2.2 per cent of GDP.

    Remittances, which are predicted to continue at $31.1 billion this fiscal year, are expected to grow to $33.2 billion next fiscal year.

    Key allocations in Budget 2022-23

    Rs1,523 billion allocated for defence

    Rs800 billion allocated for Public Sector Development Program (PSDP)

    Rs699 billion allocated for targeted subsidy

    Rs364 billion allocated for Benazir Income Support Program (BISP)

    Rs64 billion allocated for Higher Education Program

    Rs25.99 billion allocated for Atomic Energy Commission

    Rs24 billion allocated for Health

    Rs21 billion allocated for Benazir Nashunuma Program

    Rs11 billion allocated for Agriculture

    Rs10.12 allocated billion for food security 

    Rs9.60 billion allocated for Climate Change

    Rs530 billion allocated for pension funds

    Rs3.46 billion allocated for Maritime Affairs

    Key announcements

    The GDP growth target has been set at 5 per cent.

    Remittances are expected to total $33.2 billion.

    Inflation will be held at 11.5 per cent.

    FBR has set a revenue target of Rs7,004 billion.

    Non-tax revenue objective is set at $2 billion.

    The goal set for imports is $70 billion.

    The target for exports is $35 billion.

    Government employees will have a 15 per cent raise in pay.

    Under a new employment scheme, youngsters will be eligible for interest-free loans up to Rs500,000.

    Distributors and manufacturers will no longer be subject to an 8 per cent withholding tax.

    On national saving systems, the profit rate dropped from 10 per cent to 5 per cent.

    Cinema owners and film makers are exempt from income tax.

    On cars with engines larger than 1600cc, the advance tax will be raised.

    Pharmaceutical materials are exempted from any customs duties.

    This is a developing story..

  • Coming budget 22-23 will improve Pakistan’s IT sector

    Coming budget 22-23 will improve Pakistan’s IT sector

    Prime Minister (PM) Shehbaz Sharif emphasised the importance of drafting an economic strategy during the day-long Pre-Budget Business Conference on Tuesday, stating that all stakeholders should work together to develop a framework for attaining economic growth.

    During his speech, the PM stressed the importance of financial management in order to boost exports and agricultural yields. The meeting was attended by senior economists, industrialists and was organised by the government to explore avenues of consensus-based economic initiatives, according to APP.

    “All of us will have to move collectively. The government will need guidance from stakeholders and experts. The government will form a taskforce on agriculture and exports for formulating comprehensive plans,” he said.

    PM Shehbaz stated that his government had about 15 months to implement short and medium-term economic initiatives.

    He was disappointed that Pakistan was lagging behind other countries, despite the fact that the rest of the world had excelled by following their development plans. He claimed that Pakistan was endowed with talented individuals capable of replicating India’s success in the IT sector.

    PM Shehbaz announced that he had assigned Minister of Information Technology Aminul Haque the objective of increasing IT exports to $15 billion in the next two years. “We cannot progress until we set ambitious targets,” he stressed.

    Syed Amin Ul Haque pledged on Tuesday to increase information technology exports to $5 billion by the end of 2023.

    For the coming fiscal year, several IT and telecommunications programmes have been proposed in this regard.

    According to sources, these projects include 31 existing and two new ones, for which the Pakistani government would give Rs4,438.696 million and foreign aid will provide Rs1,042 million.

    Budget allocation for IT sector

    Reportedly, an amount of Rs100 million is proposed for IT professional certification through the Pakistan Software Export Board, while Rs80 million is planned for Crime Analytics and Smart Policing. In Azad Jammu and Kashmir and Gilgit-Baltistan, Rs50 million has been suggested for demand-driven industry, while Rs179 million has been earmarked for the building of a data centre to provide cloud-based services.

    PM Shehbaz warned that development plans could not be implemented unless political stability was achieved. The premier also stressed the importance of concentrating on exports and developing the agricultural sector.

    He went on to claim that he was aiming to ‘fix’ friendly country relations that had deteriorated during the previous administration’s tenure. “I have invited China, Japan, Turkey, and other countries to invest in Pakistan,” he said. He invited the corporate community to join him in this endeavour.

    Meanwhile, Finance Minister Miftah Ismail stated that the government will require $41 billion in the next 12 months and that he is ‘confident’ that this can be achieved.

    The Shehbaz Sharif government, he added, has re-engaged with the International Monetary Fund (IMF). “We spoke with them and are extremely optimistic that we will reach an agreement with the IMF soon. That is something we are extremely certain about”.

    Moreover, he explained that the present coalition administration had made difficult measures to help the economy stabilise. “It is difficult for any prime minister to authorise a fuel price hike of twice the amount we have, but we were losing Rs84 per litre on diesel and Rs69 per litre on petrol”.