ISLAMABAD: Finance Minister Muhammad Aurangzeb has unboxed the federal budget 2024-25 as the PML-N-led government seeks to unlock a fresh long-term long-term International Monetary Fund (IMF) bailout package.
Aurangzeb, a first-time finance minister, began his budget speech in the National Assembly amid a noisy protest by the opposition lawmakers belonging to Pakistan Tehreek-e-Insaf (PTI)-backed Sunni Ittehad Council — who stood on their desks, raised anti-government slogans and tore the copies of the Finance Bill 2025.
“Despite the financial and political challenges during the past one year, the government’s progress on the economic front has been impressive,” the finance minister said in his opening remarks.
“We have heard the talk of all political parties to sit together in the country’s interest several times. Today, the nature has provided Pakistan with another chance to walk on the path of economic progress and we can’t afford to waste this opportunity,” he said while requesting all the MNAs to cooperate with the government putting the country on the path of progress.
“A while ago, Pakistan’s economy faced a difficult situation as the State Bank’s reserves were enough for only less than two weeks of imports. The value of the rupee depreciated by 40%, economic progress was almost nil, and inflation had reached a level that the people were going below the poverty line at a fast pace. Coming out of this situation seemed difficult,” said the minister.
The finance minister said the GDP growth rate is expected to remain 3.6%, in the next fiscal year while the inflation is expected to come down to 12%.
He said the budget deficit is 6.9% of the GDP and the primary surplus to remain at 1% of the GDP.
The tax collection by the Federal Board of Revenue (FBR) is estimated at Rs12,970 billion which is 38% more than the current fiscal year.
Therefore, the province’s share in the federal tax collection will be Rs7,438 billion.
The federal government has set a non-revenue target at Rs3,587 billion, while the Centre’s net income is Rs9,119 billion, the finance minister said adding that total federal expenditures have been estimated at Rs18,877 billion of Rs9775 billion will be spent on interest payments.
He also praised the previous government for striking a short-term standby agreement with the IMF, which he said paved the way for economic stability and ended uncertainty “at a point when the previous IMF programme was about to end and reaching agreement on new [IMF] programme was uncertain”.
“PM Shehbaz-led coalition government deserves felicitations for untiring efforts for the revival of the economy,” he added.
Aurangzeb further stated that inflation, which was the centre of attention of Prime Minister Shehbaz Sharif and his team, came down to almost 12% in May leading to a decrease in the prices of essential commodities.
“It is not an ordinary achievement in the light of existing challenges,” he said, predicting further drop in inflation. The minister further stated that the foreign exchange reserves have also been stable.
He said that the recent cut in the interest rate by the SBP was proof of the government’s efforts to bring down inflation.
FinMin Aurangzeb said that the Public Sector Development Programme (PSDP) plays a key role in the development, prosperity and social welfare of the country.
“This works as a catalyst for the modernisation, expansion, basic infrastructure and sustainable development,” he added.
The minister said that the government devised the history’s biggest PSDP for the fiscal year 2024-25, which is worth Rs1,500 billion.
He said that this volume is 101% bigger than last year’s revised volume.
Rs100 billion has been earmarked for the Pakistan Peoples Party’s (PPP)-projects, he said adding that the developmental budget was a display of the government’s commitment to deal with the challenges in the administration of affairs related to as infrastructure development, transportation, energy, IT and water resources, in these difficult times.
In the PSDP 2024-25, the completion of ongoing projects has been prioritised with up to 83% of resources allocated for the ongoing projects and only 17% of resources for new projects.
The minister said that the federal government is responsible for the basic infrastructure and a proposal for the allocation of 59% funds for this sector in the PSDP for the fiscal year 2024-25 has been made.
Meanwhile, allocating 20% of the developmental budget to the social sector has been proposed.
The minister said that it was a constitutional responsibility to ensure a balanced local development, that’s why, 10% of the funds have been reserved for the districts merged into Azad Jammu and Kashmir, Gilgit Baltistan and Khyber Pakhtunkhwa, while approximately 11.2% of resources have been earmarked for the IT, telecommunication, science and technology, governance and production sectors.
Aurangzeb said that projects prioritised in the PSDP meet the given standards under the the guidelines approved by the National Economic Council (NEC):
- The strategic and core projects that give special attention to the water resources, transportation, communications and energy sectors
- The projects based on foreign aid so that they get completed in due time
- Projects in all sectors on which more than 80% expenditure has been made and which can be completed within FY25 and provide financial and economic assistance to the economy
More to follow…
