Pakistan is due to announce its budget for fiscal year (FY) 2010-11 (July-June) on June 5. Following are details of the budget that have been announced and media reports on its likely contents.
Macroeconomics: The government expects gross domestic product (GDP) to grow by 4.5 percent in FY 2010-11 beginning on July 1 as compared with 4.1 percent forecast for FY 2009-10.
Agriculture growth in the next fiscal year is targeted at 3.8 percent, manufacturing
growth at 5.6 percent and service sector
growth at 4.7 percent.
Inflation for FY 2010-11 is targeted at 8 percent, compared with the central bank’s forecast of between 11 percent and 12 percent for FY 2009-10.
The government is aiming for a fiscal deficit in FY 2010-11 of between 4 percent and 4.2 percent of GDP, compared with an earlier forecast of 5.1 percent.
The National Economic Council (NEC) has approved Rs 663 billion for FY 2010-11 for the Public Sector Development Programme 2010-11.
The government has finalised proposals for collecting Rs 1.65 trillion in taxes during FY 2010-11.
Taxes, duties and subsidies: The government has decided to eliminate subsidies on power, fertilizer and sugar in the budget for the next fiscal year.
The government has decided to eliminate five types of subsidies for the next fiscal year. This includes a subsidy on the power tariff, a power tariff subsidy for tubewells in Balochistan province, a tariff differential subsidy, a subsidy on sugar and a subsidy on fertilizer, from July 1.
The government is expected to announce the replacement of general sales tax with a 15 percent value-added tax in the budget.
The government is expected to impose capital gains tax on the purchase of stocks made on or after July 1. reuters