Corona sharpens budget, shrunken receipts, shrunken tax targets, disappointing for govt employees, masses
KARACHI. COVID 19 or Corona pandemic has hit the Pakistan,s economy hard like other countries of the world leading to a shrunken economy, shrunken receipts, shrunken tax targets and no relief to millions of government employees and disappointing or no measures for small businesses. Laying a 7.137 trillion budget with a current deficit of rupees 3437 billion, Federal Minister Hammad Azhar told the National Assembly that budget focusses striking a balance between Corona expenditures and fiscal deficit. According to the budgetary figures biggest chunk of rupees 2946 billion will be consumed by interest payments of loans taken in previous governments, followed by Defence getting Rupees 1289 billion with an increase of eleven per cent. The tax collection target for FBR was set at rupees 4963billion as against previous years ambitious target of rupees 5,555 billion. The non tax revenues are estimated at rupees 1610 billion. Although no new tax was imposed yet tax collection was set at rupees 1000billion more which means no relief to masses. The new budget is more inclined towards construction industry and tourism, a corner stone of PTIs election manifesto. The new budget has no measures for SMEs, the hardest hit by Corona virus. The government employees were disappointed as after decades they were denied of relief against inflation or annual raise. The government sets eyes on reducing inflation from present 9.1percent to 6pc. The budget figures also point to a grim economic picture as Agriculture, the back bone of economy enters into real negative zone along with industrial sector down by 2.64pc and services sector by 0.59pc. Experts have termed the budget to be a neutral budget with no extra ordinary steps despite extra ordinary situation due to COVID 19 which is likely to hit Pakistan's economy more with high number of new cases and deaths as PTI government policy of ease on lock down may spell disaster. One of the striking feature was amendments in FBR rebate claims mechanism which will be free from human intervention. The increase in limit of purchase against CNIC from rupees 50000 to 100,000 is seen as acceptance of reality by federal government and comes as a little relief to small businesses.