What is budget and why it is important
There are tons of different kinds of budgets from the short-term and the long term to department-specific. But when it comes to the country’s budgets (in our case budget of Pakistan), they can make a budget for anything. The important thing to remember is these budgets are actually the plans and strategies which a country is planning for its better future.
For instance, if any country were planning to invest more in education and health next year, that expense would show up in the budget.
The budget of the country depends on the country’s economy. Talking about Pakistan’s economy, Pakistan’s economy is on the line of downfall in the last two years. The inflation rate in Pakistan increased to 9.11 percent year-on-year in May 2019. In the wake of rising inflation, the Pakistani government has imposed a lot of different types of taxes on Pakistani citizens. The taxes imposed are based on the IMF’s bailout conditions.
In the same way, while addressing the World Economic Forum at Davos in January, Prime Minister Imran Khan claimed that the year 2020 will be one of economic growth for Pakistan, But as the total budget of Pakistan under current govt is $97billion.
Budget by PTI government
The PTI government’s budget registered a growth of 30 percent against the revised budget of Rs5. 385 trillion for the current fiscal year. The finance minister of Pakistan said that total federal revenues have been estimated at Rs 6. 717 trillion which is 19 percent higher than the previous year’s revenues of Rs 5.661 trillion.
This sounds good! but let me share some facts related to previous budgets
Total expenditures: ₨5.932 trillion (US$42 billion)
Total revenue: ₨5.159 trillion (US$37 billion)
Roughly more than 40% of revenue goes into the debts.
According to survey Pakistan exported $24.8B and imported $55.6B, resulting in a negative trade balance of $30.9B. In 2017 the GDP of Pakistan was $304B and its GDP per capita was $5.53k …
Compare to previous govt in the Era of Prime minister Imran khan the GDP fallen down to 2.35%, Which is quite saddening.
Issues our Businessmen face
Friendly speaking there are bundle of issues which our businessmen are facing. let me explain some issues, which every small, big businessmen face here in this country due to the lack of govt interaction
- Registering Property is not easy
- Construction Permits not easy
- Taxes system is complicated
- Hike of taxes
- Getting Electricity Is expensive
- Trading Across Borders Is not easy
As business is the backbone of every country, The collection of direct taxes and indirect taxes improves any country’s budget. If a businessman will be not be satisfied with the country’s taxation system, his/her business would get affected and indirectly it will affect country’s economy.
Education Budget of Pakistan
The government has earmarked Rs 77.262 billion for Education Affairs and Services in the federal budget for 2019-20 against the revised allocation of Rs 97.155 billion for the current fiscal year, showing a decrease of around 20.5 percent. The government has also reduced the budgetary allocation for the higher education sector. Pakistan’s public expenditure on education as a percentage to GDP is estimated at 2.4 percent in fiscal year 2018-19, which is the lowest in the region. (Business recorder, 2019)
Health Budget of Pakistan
Similarly, the Health Sector development allocation in the federal budget has also declined as compared to the last year. The government has earmarked RS12671 million for development in the health sector while the allocation in last year’s budget was RS29999 million. It is also distressing to note that that the government failed to implement 2018-19 allocations by a huge margin.
Hence these sectors are not only ignored for the coming fiscal year but were also overlooked in the current fiscal year. Talking about the economy, the statistics show that Pakistan’s economy is on a line of downfall from the last two years as GDP has fallen down. Keeping in mind the piles of debt we owe and the pandemic of COVID-19 on our doors the current statistics doesn’t favor us either.
Ignoring the two most important sectors of Education and Health is of grave concern to CPDI. Unfortunately, Pakistan’s government policies are still too complicated to understand. The Business of Pakistan is suffering due to hike in taxes, complicated taxation Systems, illogical policies and confused govt.
In last we can only hope that one day the budget of this country make positive effects in the lives of Pakistani peoples and Pakistan Government itself.
-Muzzamil Khawaja, Student of MBA at Paf-Kiet
Read our last blog “Energy Crisis In Pakistan”