2013–14 Pakistan federal budget

On 13 June 2013, Dar presented the federal budget for 2013–14, which was termed as "business friendly".[9] Total outlay of the federal budget was ₨. 3.5 trillion with an annual deficit of 6.3%; the inflation was set at 9.5% as the GDP growth was projected at 4.8%.[10] The budget putted ₨. 1.55tn for the PSDP; additional allocation of ₨. 75 billion for the BISP; the defence expenditure was kept at ₨. 627 billion as the debt servicing was near at the ₨. 926 billion.[10] The GST was increased from 16% to 17% as the social security was up by 10%, with minimum raised from ₨. 3000 to ₨. 5000; the ₨. 225 billion was reserved for energy sector development.[10]

The tax exemption for luxury cars was proposed to be abolished while 1200CC hybrid vehicles are being exempted form import duty.[10] A concession of 50.01% had been proposed for 1200–1800CC hybrid vehicles.[10] Recommendations were to include ₨. 20,000 tax be applicable on the purchase of 1000CC cars.[11] A withholding tax on wedding ceremonies being held at commercial venues has also been proposed along with taxes on foreign movies and dramas. Additional taxation on cigarettes, paan, and chahliya were also been increased. The GDP growth rate was set to target for 2013–14 at 4.8% and revenue targeted at ₨. 2.475tn.[10] The non-tax income was set around ₨. 800 billion as the government had allocated ₨. 185 billion as energy subsidy.[10]

Finance Minister Ishaq Dar maintained that the circular debt amounted to more than ₨. 500 billion was to be eliminated in 60 days.[12] The budget proposes to abolish the ministers' discretionary funds.[12] Initiation of the Laptops scheme was approved by the government and the Customs duty on water filtration equipment was proposed to be decreased while the people's works program renamed as Tamir-e-Watan Pakistan program (lit. Nation–building Pakistan Programme).[12] Finance Minister Ishaq Dar said that the auction for 3G technology was to be held soon and the borrowing from the State Bank of Pakistan (SBP) will be reduced.[12] The rate of inflation will be kept under single digit and its targeted rate for 2013–14 has been fixed at 9.5%t.[12] He said the government inherited a battered economy and the average rate of inflation stood at 13.1% in last five years."[12]

Responding to the budget, dr. Farrukh Saleem hailed the budget and termed it "Historic budget", as large portion of the budget was related towards the development of country's civil sector, higher education, highway infrastructure, and electricity sector.[13] Spending on governmental infrastructure was drastically reduced to 45.5% and the Prime Minister's Secretariat had voluntarily given up its ₨. 42 billion discretionary fund.[13] According to Farrukh Salim, the budget had shown as sign of "political maturity" as in the past governments had always abandoned schemes—whether good or bad—of their predecessors.[13]

The budget was aimed to fill the ₨. 500 billion circular debt in state-owned enterprises for the first time since the nationalization programme began back in the January 1972.[13] The budget deficit was to be scaled down from ₨. 2.2tn to ₨. 1.6tn with increasing the investment-to-GDP ratio to 20.9% as well as increasing international reserves by 100% and keeping inflation in 6.3%.[13]

The main focus of the budget was to increase the spending on higher education, with the allocation of ₨. 57.1 billion and a 50.0% jump in the number of scholarships.[13] As dr. Farrukh Saleem maintained: "Our minister of finance may not make favourable headlines, but he has made history. The document that he has presented makes him a dreamer and an artist —two in one. Someone intelligent once said, "An artist is a dreamer consenting to dream of the actual world."[13]

The budget was criticized over the increase in the GST and the zero-increment on salaries of government personnel.[14] The pro-leftist MQM rejected the budget for the new 2013–14, terming it "a burden on the masses."[14] Addressing a press conference at Nine Zero Secretariat, MQM's convener dr. Farooq Sattar said that the increase of General sales tax (GST) is a "merciless step" for the low-income class people.[14] Dr. Sattar said that no measures were taken to provide relief to the poor masses.[14] He further said that the first priority of the government should be to eliminate electricity loadshedding in the country, but, he added that no steps were taken in this regard.[14] The MQM leader said the PML-N government also failed to introduce any policy to bring back looted money. While criticizing the government, Sattar said that money should be allocated in the budget to counterterrorism efforts."[14]

Schools teachers and educators on the other hand, describe the budget as the "Budget worst in history of Pakistan".[15] The Punjab based SST Teachers Association lashed out at the government for providing no incentives to government employees, including teachers, in the budget.[15] The SST Teachers Association criticised the government for not making increase in salaries of government employees.[15] According to SST Teachers Association, it was for the first time in the country's history that government employees have been totally neglected.[15] The Sindh based APTA association appealed to the PML(N) to reconsider the budget policy to fixing the minimum salary of workers at ₨. 18,000.[15] The salaries of government employees should be increased in accordance with the prevailing price hike, he demanded.[15] The Sindh-based APTA association quoted that the "APTA association, together with the Punjab Teachers Association, would launch a protest movement against the government."[15]

After the severe criticism from the public, the adjustments were carried out Finance Minister Ishaq Dar and raised salaries of government personnel by 10.2% following recommendations of the committee tasked to review its feasibility.[16] To review the budget, Finance Minister Ishaq Dar had constituted a review committee to review the possibility of an increase in the salaries of government employees.[16]

Initially, the committee proposed 7.5% raise in the salaries, however, Dar said the government has increased it by 10.1%.[16] Senator Dar said the raise in salaries of government employees would be effective from 1 July."[16]