News
Monday, May 28, 2012
MQM presents country’s first-ever shadow budget* Proposes 50pc reduction in budget deficit, Rs 45 billion cut in defence budget, Rs 90 billion cut in govt expenditures
* Suggests 4 percent cut in GST, abolition of petroleum levy
By Sajid Chaudhry
ISLAMABAD: The Muttahida Qaumi Movement (MQM) on Sunday presented the first-ever shadow budget of the country for the fiscal year 2012-13, proposing out-of-the-box solution for bringing budget deficit down by 50 percent – from Rs 1.143 trillion to Rs 575 billion – with maximum relief in the shape of reduction in prices of 16 commonly used items for the poor and lower middle class of the country.
The shadow budget presented by Dr Farooq Sattar during a media briefing at a local hotel on Sundy seeks defence budget reduced from Rs 495 billion in 2011-12 to Rs 450 billion in 2012-13, keeping in view the improvement in relations with the neighbouring countries, especially India.
The MQM proposed an allocation of Rs 250 billion for power sector to deal with circular debt and save consumers from power price hike. The shadow budget also proposed Rs 150 billion food and fertiliser support subsidy for revival of agriculture sector, and Rs 25 billion each for Benazir Income Support Programme and Benazir Income Generation Programme, to help poor families move out of the poverty circle.
The shadow budget envisages major shift towards direct taxation – increasing direct taxes from 32 percent to 45 percent, and reducing indirect taxes from 68 percent to 55 percent, with powers to the federal government to collect agriculture income tax. The shadow budget also proposes special development programme with focus on development of sectors like energy, water, infrastructure, human resource development and social sector to overcome challenges faced by economy.
The outlay of the shadow budget for the year 2012-13 is Rs 3.610 trillion, some 30 percent higher than the size of the budget for 2011-12. The resource availability during 2012-13 has been estimated at Rs 3.210 trillion, against Rs 2.951 trillion in estimates of 2011-12. Net revenue receipts for 2012-13 have been estimated at Rs 1.425 trillion, indicating an increase of 18 percent over the estimates of 2011-12. The provincial share in federal revenues has been estimated at Rs 1.510 trillion, some 25 percent higher than the estimates of 2012-13.
The overall expenditure during 2012-13 has been estimated at Rs 2.805 trillion, out of which the non-development budget is Rs 2.315 trillion and development budget of Rs 500 billion. The non-development budget shows a decrease of one percent over the estimates of 2011-12, and development budget has increased by 10 percent over the estimates of 2011-12.
The shadow budget proposes 10 major initiatives for increase in tax revenues as well as revival of economy and seeks that income from all sources, above taxable limit, be taxed. Reduction in sales tax rate from 16 percent to 12 percent, reduction in maximum rate of import duty to 10 percent –15 percent with minimum rate of five percent.
Courtesy www.dailytimes.com.pk