Highlights of Budget 2024-25

June 12, 2023 (MLN):  Federal Minister for Finance and Revenue Muhammad Aurangzeb is delivering the budget speech for the financial year 2024-25 in the federal cabinet session.
"It is a great honour for me to present the budget for the financial year 2024-25 before this honorable House. This is the first budget of the coalition government after the elections of February 2024," he stated.
"I am the leader of the political parties included in the coalition government under the leadership of Prime Minister Mian Muhammad Shahbaz Sharif, especially Mian Muhammad Nawaz Sharif, Bilawal Bhutto Zardari, Khalid Maqbool Siddiqui," he added. 
Background:
Mian Muhammad Nawaz Sharif in Pakistan in 1990 laid the foundations of the economic reforms, under the leadership of Prime Minister Muhammad Shahbaz Sharif, the home grown reform agenda.
By overcoming the current economic problems, the speed of development will be increased.
Not long ago the economy of Pakistan was facing a difficult situation as the reserves held by the State Bank were only sufficient for imports for a period of less than 2 weeks. In just one year, the value of the Pakistani rupee had decreased by forty (40) percent. Economic growth was close to zero, and inflation had reached such levels that people were rapidly falling below the poverty line.
It looked very difficult to get out of the situation. The IMF program was coming to an end in June last year, and there was much uncertainty about the new program.
A delay in the new IMF program could have created serious problems.
"I have to commend the previous government of Prime Minister Mr. Muhammad Shahbaz Sharif who entered into a Stand By Arrangement agreement with the IMF," he stated. 
The measures taken under this program paved the way for economic stability and ended uncertainty.
The results of our continuous efforts in the last few months reassure us that we are moving in the right direction. Inflation, which is the focus of the Prime Minister and his team, eased to around twelve (12) percent in May. Food items are now within the reach of the masses. Considering the challenges ahead, this is no mean feat.
Inflation is likely to come down further in the coming days. The exchange rate has remained stable. Our financial consolidation efforts are bearing fruit and investors are looking for investment opportunities in various sectors of the economy.
The announcement of interest rate cut by the State Bank is a support and evidence of efforts to control inflation. Coalition of Prime Minister Muhammad Shahbaz Sharif for tireless work for the recovery of the economy. 
These achievements in the last year are not insignificant as a result of the country.
A crisis has emerged and a journey of lasting development has begun, the fruits of which will reach the people. These achievements are a sign of a better future.
The need is that we accelerate the current pace of development to achieve the goal of economic self-reliance. It is not something that can be done overnight. For this we need to work hard, work together with all institutions and people on a homegrown reform plan.
“We are continuing our home-grown reform agenda with determination and determination, hoping that Pakistan will soon return to the era of Inclusive and Sustainable Growth. Everyone is well aware that the road is very difficult, we have limited options but as I have said before it is time for reform,” he said.
“I believe that it is high time that we give the private sector central importance in our economy, and make the people of Pakistan our priority rather than a few individuals,” he noted.
For recent decades, we have been caught in the vortex of economic imbalance, due to the structural factors due to which investment, economic output and exports are under pressure. In the past, the state was burdened with unnecessary responsibilities due to which government expenditure became unsustainable. The public has to suffer the consequences in the form of inflation, low productivity and low income jobs.
We have to focus on public welfare through Targeted Welfare System Structure and subsidies that distort prices and efficiency will have to be minimized
Steps have to be taken to make the sector viable. Reducing the cost of production is very important in these measures.
We have to restructure and privatize SOES and promote private sector through good governance and level playing field. All these measures are aimed at solving the chronic problem of 110 more expenditure than income.
He also discussed the top priority of the government i.e. reduction of inflation. A year ago inflation reached eighty-eight (38) percent while Food Inflation was forty-eight (48) percent.
The low income class was facing serious difficulties. I am happy to report that inflation has come down significantly as a result of better economic strategy.
In May 2024, Consumer Price Index was eleven point eight (11.8) percent while Food Inflation was only two point two (2.2) percent. The government has worked tirelessly to bring inflation down to single digits and we will continue these efforts.
Unfortunately, Pakistan lags far behind other countries in terms of Tax-to-GDP Ratio. This is why tax reform is critical to our economic success. I am happy to inform that multidisciplinary initiatives are already underway in FBR.
The Prime Minister is keeping a close eye on liberalization, tax policy and administrative reforms in the FBR, and has clear instructions not to burden those already in the tax net but to expand the tax net.
He also informed that the government has introduced merchant friendly scheme aimed at wholesalers, retailers and will present to the Cabinet. The Prime Minister has announced the closure of the PWD department as a first step towards Right Sizing.
Simplification of Regulatory Framework is very important to accelerate business activities in the country and increase exports.
In this regard, under BOI has been initiated. The Pakistan Regulatory Modernization Initiative aims to simplify the government's regulatory framework and improve the business environment through automation to accelerate investment, exports and economic growth.
A large part of any government's budget is spent on the procurement of goods and services for ease and transparency in the system. Through procurements, the efficiency of the government can be improved as well as resources can be saved. According to research, government expenditure can be reduced by ten (10) to (20) percent through E-Procurement.
This system also helps in controlling problems like corruption, fraud and malfeasance in government procurements.
This system has been implemented in thirty seven (37) Ministries and two hundred eighty nine (279) Procuring Agencies. Under this, procurement of fourteen (14) billion rupees has been done in the federal government. The government has a firm intention to bring the entire governance within the framework of e-procurement this year.
The efforts in terms of expenditures and receipts are resources for the federal government Human Resource Development, Social will be helpful in providing which Resources will be available for Protection and Climate Resilience.
He was of the view that governments should not do business. The Prime Minister strongly believes in reducing government intervention in the commercial space and promoting the private sector.
That is why the government has made privatization a key priority. We will not only accelerate the ongoing privatization of institutions like PIA, Roosevelt Hotel, House Building Finance Corporation and First Women's Bank, but also embark on a concrete program of offering other SOES for private sector investment. Special attention will be given to the transition to the sector are In the following years SOES owned and managed the energy, financial and industrial sectors
In this context, I would like to explain the details regarding the privatization of PIA. This privatization started in November 2023 with the appointment of Financial Advisor.
The current government took this trend forward as soon as it assumed the reins of government in February 2024. In March 2024, PIA Holding Company was formed. After which the liability of six hundred and twenty two (622) billion rupees was transferred from PIA.
Taking this trend forward, the Privatization Commission has invited Expression of Interest through advertisements in national and foreign newspapers for the privatization of PIA in April 2024. Twelve (12) companies expressed interest in the privatization of PIA.
The Board pre-qualified six (6) companies to the Privatization Commission.
What happened on June 3? Bids will be invited from investors in the first week of August 2024 After that this series will reach completion. According to International Best Practice-26, the government is outsourcing the major airports of the country.
 
The budget FY25 is aimed to strike a delicate balance between people-friendly budgetary measures while meeting IMF conditions.
The federal government has set a GDP growth target of 3.6% for FY25 which is a modest target, the budget document revealed.
The government has decided to provide significant relief to employees given inflation. A 25% salary increase has been approved for Grade One to Sixteen employees, as announced in the budget speech. Salaries of officers in Grades Seventeen to Twenty-Two will be increased by 22%.
Additionally, a 15% increase in pensions for retired employees has been proposed. The minimum monthly wage is proposed to increase from Rs. 32,000 to Rs. 37,000. The government has acknowledged the financial hardships faced by its employees in the budget speech.
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Posted on: 2024-06-12T18:01:06+05:00
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