Understanding Pakistan's Federal Budget 2024-25

Quick Review

13 Jun 202416:08

Summary

TLDRThe video script discusses the Federal Budget 2024-25 for Pakistan, highlighting a total budget of 18.9 trillion rupees with a GDP growth target of 3.6%. The budget focuses on increasing tax revenue to 40% and non-tax revenue above 3.5%. It allocates 21.22 billion for defense, emphasizing economic challenges and achievements. The script also covers tax policy reforms, including progressive tax rates and measures to tackle inflation, which is targeted to be controlled at 12%. Additionally, it discusses public sector development programs, with a 40% increase, and the government's strategy to improve the economy through savings, investment, and fiscal austerity.

Takeaways

📈 The federal budget for Pakistan for 2024-25 has been presented, aiming to project economic growth with a GDP target set at 3.6%.
💼 Finance Minister Mohammad Andleeb presented a total budget of PKR 18.9 trillion, focusing on various sectors including defense and debt servicing.
🔼 A significant emphasis on tax revenue collection, with a target set at PKR 1 trillion, which is a 40% increase from the previous year's target.
🛡️ Defense expenditure is a priority, with an allocation of PKR 2122 billion, reflecting a 17.6% increase from the previous year.
💼 The budget deficit is projected at 6.9%, indicating the government's intention to manage fiscal gaps within the projected income and expenditure.
💹 Measures are proposed to boost revenue generation, including increased taxes on petroleum products, mobile phones, and tobacco, aiming to collect more from the public.
🌱 An emphasis on economic reforms, with a focus on privatization of state-owned enterprises and regulatory reforms to attract investment and improve economic outlook.
💼 The IMF's guidelines and economic alignments are considered in the budget, with a commitment to long-term economic programs and fiscal consolidation.
📉 The devaluation of the Pakistani Rupee and a decrease in foreign reserves are noted, with the budget reflecting strategies to deal with these economic challenges.
🏛️ Public sector development programs, including those for health and renewable energy, are allocated significant funds, with an overall PSDP allocation of PKR 3792 billion.

Q & A

What is the total amount allocated for the Federal Budget 2024-25 in Pakistan?
-The total amount allocated for the Federal Budget 2024-25 in Pakistan is 18.9 trillion rupees.
What is the GDP growth target set for the fiscal year 2024-25?
-The GDP growth target set for the fiscal year 2024-25 is 3.6%.
What is the tax revenue target for the Federal Budget 2024-25?
-The tax revenue target for the Federal Budget 2024-25 is set at 1 trillion rupees.
What is the projected deficit for the Federal Budget 2024-25?
-The projected deficit for the Federal Budget 2024-25 is 6.9%.
How much is allocated for debt servicing in the Federal Budget 2024-25?
-For debt servicing, 9.8 trillion rupees are allocated in the Federal Budget 2024-25.
What is the amount allocated for defense in the Federal Budget 2024-25?
-The amount allocated for defense in the Federal Budget 2024-25 is 2122 billion rupees.
What is the target set for non-tax revenue in the Federal Budget 2024-25?
-The target set for non-tax revenue in the Federal Budget 2024-25 is above 3.5 trillion rupees.
What is the expected increase in the minimum wage for government employees in the Federal Budget 2024-25?
-The expected increase in the minimum wage for government employees in the Federal Budget 2024-25 is from 31,000 to 37,000 rupees.
What is the proposed tax rate for individuals earning above 6 million rupees per annum in the Federal Budget 2024-25?
-For individuals earning above 6 million rupees per annum, the tax rate is proposed to increase progressively from 15% to 45% in the Federal Budget 2024-25.
What is the target set for inflation control in the Federal Budget 2024-25?
-The target set for inflation control in the Federal Budget 2024-25 is 12%.
What incentives are being provided in the Federal Budget 2024-25 to promote renewable energy?
-In the Federal Budget 2024-25, significant tax relief is being provided for solar panels, batteries, inverters, and other related renewable energy products to promote renewable energy.

Outlines

00:00

📊 Federal Budget 2024-25 Overview

The video script discusses the Federal Budget of Pakistan for the fiscal year 2024-25, presented by Finance Minister Mohammad Andleeb. The total budget is 18.9 trillion rupees, with a GDP growth target set at 3.6%. The tax collection target is 1 trillion rupees, which is higher than the previous year's target. The non-tax revenue is projected to be easier to collect than tax revenue. The budget deficit is projected at 6.9% of the GDP. The script also discusses the breakdown of expenditures, with the largest being debt servicing at 9.8 trillion, followed by defense spending at 2.1222 trillion. The allocation for development programs is also highlighted, with a focus on sectors like health and renewable energy.

05:02

💼 Economic Reforms and Tax Policies

The script delves into economic reforms and tax policies, including the IMF guidelines and economic alignments. It mentions the privatization of state-owned entities, except for basic needs, and the increase in petroleum levies. The government's revenue collection from petroleum levies is discussed, with a target set higher than the previous year's collection. The script also covers the increase in salaries and pensions for government employees, progressive tax rates, and the government's efforts to control inflation, which is targeted to be at 12%. The budget also includes measures to boost investment and economic output, focusing on renewable energy and infrastructure development.

10:03

🛡️ Defense Expenditure and Economic Outlook

This section of the script focuses on defense expenditure, which is budgeted at 2.1222 trillion, with allocations for the army, air force, and navy. It also discusses the economic challenges and achievements, including the decline in foreign reserves and the value of the Pakistani rupee. The script mentions the government's commitment to the IMF program and the need for fiscal austerity. It outlines the government's tax policy and reforms, including widening the tax net, increasing documentation, and focusing on non-filers. The script also addresses the issue of non-filers and the penalties for not filing tax returns. The budget aims to improve the economic outlook by increasing investment and exports.

15:03

🌱 Economic Growth and Fiscal Austerity

The final paragraph discusses the government's focus on savings and investment to boost the economy and fiscal austerity. It highlights the government's commitment to improving economic conditions and the expectation of better times ahead. The script also addresses the public's patience and the government's promise of better economic management. It concludes with an overview of the budget estimates for the fiscal year 2024-25, emphasizing the need for fiscal discipline and economic growth.

Mindmap

Keywords

💡Federal Budget

The Federal Budget refers to the government's financial plan for a fiscal year, outlining its revenue and expenditure. In the context of the video, the Federal Budget for 2024-25 is discussed, detailing the government's projected income, expenses, and how it plans to allocate resources across different sectors. The script mentions figures like GDP targets and revenue collection goals, emphasizing the importance of the budget in shaping economic policies.

💡Deficit

A deficit occurs when a government's expenditures exceed its revenues. The script discusses the projected deficit for the budget, indicating the government's expectation of spending more than its income. This is significant as it suggests the government will need to borrow or use other means to cover the shortfall, which can have implications for the economy and public debt.

💡Tax Revenue

Tax revenue is income collected by the government through various forms of taxation. The video script highlights the government's target for tax revenue collection, which is crucial for funding public services and infrastructure. It also mentions the goal of increasing tax revenue by broadening the tax base and improving tax collection efficiency.

💡GDP Growth Target

The GDP growth target is an estimate of the expected increase in a country's Gross Domestic Product over a specific period. The script mentions a GDP growth target of 3.6%, which reflects the government's economic outlook and the projected expansion of the economy. Achieving this target would typically involve various policy measures, including fiscal and monetary policies.

💡Non-Tax Revenue

Non-tax revenue encompasses all sources of income for the government that are not derived from taxes. The video discusses the target for non-tax revenue, which can include fees, fines, and other charges. This revenue stream is important for diversifying government income and reducing reliance on taxation alone.

💡Expenditure

Expenditure refers to the money spent by the government on various services, programs, and investments. The script provides a breakdown of the budgeted expenditures, including significant allocations for debt servicing and defense. Understanding expenditure patterns is key to assessing a government's priorities and fiscal management.

💡Debt Servicing

Debt servicing is the process of making payments on outstanding debt, including interest and principal repayments. In the video, a large portion of the expenditure is allocated to debt servicing, indicating the significant financial burden of existing debt on the government's budget.

💡Defense Expenditure

Defense expenditure is the allocation of budget towards maintaining and enhancing a country's military capabilities. The script specifies a substantial increase in defense spending, reflecting the government's commitment to national security and defense preparedness.

💡Inflation

Inflation is the rate at which the general price level of goods and services in an economy is increasing over time. The video mentions the government's target to control inflation within a certain range, which is a critical economic indicator affecting purchasing power and economic stability.

💡Public Sector Development Programs (PSDP)

PSDP refers to government-funded initiatives aimed at infrastructure and development projects. The script discusses the allocation for PSDP, indicating the government's focus on development and the sectors it prioritizes for investment, such as health, education, and energy.

💡Economic Reforms

Economic reforms are changes made to a country's economic policies and structures to improve efficiency and stimulate growth. The video touches on various economic reforms, including tax policy changes, privatization efforts, and regulatory reforms, aimed at enhancing the business environment and attracting investment.

Highlights

Introduction to the Federal Budget 2024-2025 for Pakistan.

Total budget presented is 18.9 trillion rupees.

GDP growth target set at 3.6%.

Tax revenue target set at 1 trillion rupees.

Non-tax revenue is projected to be over 3.5%.

Projected budget deficit is 6.9%.

Total expenditures estimated at 18.9 trillion rupees.

Debt servicing is the largest expense at 9.8 trillion.

Defense expenditures allocated 2122 billion rupees.

Increment in defense spending compared to the previous year.

Revenue generation discussed, with a target of 17815 billion.

Federal Board of Revenue (FBR) tax collection target set at 12970 billion.

Increment in tax revenue expected from privatization of state-owned enterprises.

Increase in taxes on petroleum products, including a 20% increase on petrol and diesel.

Introduction of health insurance schemes for journalists.

Increment of 40% in Public Sector Development Programs (PSDP).

Allocation for PSDP stands at 37922 billion.

Federal PSDP allocation stands at 1696 billion.

Proposed increments in minimum wage and salary scales.

Increment in pension by 15%.

Introduction of a flat 18% tax on mobile phones valued over $500.

Increment in taxes on cigarettes and other tobacco products.

Discussion on economic challenges and achievements.

Measures to control inflation, with a target set at 12%.

Introduction of a non-filers regime with potential SIM blockage and utility disconnections.

Tax policy and reforms discussed, with an aim to widen the tax net.

Increment in defense budget by 30%.

Allocation of defense budget among the army, air force, and navy.

Introduction of a time frame for non-filers to regularize their tax status.

Discussion on the potential impact of the budget on the economy.