The Federal Budget 2013–14 was the federal budget of Pakistan for the fiscal year beginning from 1 July 2013 and ending on 30 June 2014. The budget was presented by Finance Minister Ishaq Dar on 12 June 2013 during a session of the National Assembly. This is the first federal budget presented during the tenure of newly elected Prime Minister Nawaz Sharif and his cabinet since the change of government following the nationwide general elections held in 2013.
The new budget has an outlay of ₨. 3.51 trillion and is designed to achieve a 4.4% growth rate in the economy over the next fiscal year. The budget seeks to address the country's energy crisis, reduce non-development expenditures and bring about a range of new economic policies of the elected government. The government has termed the budget as "an investment and business friendly budget."
Although no new property taxes were levied in Federal Budget but the provincial Punjab Budget 2013–14 imposed new taxes on property. Property sellers were made liable to pay a fixed percentage of tax which decreases as the retention period increases. Despite imposition of the heavy taxation, country's leading economists and financial experts believe it won't hamper the growth of the booming property market of Pakistan. The budget also allocates ₨. 57.4 billion for development of various areas in higher education— highest in the history of Pakistan.
Federal expenses and revenues
Initial financial calculations were aimed towards the budget makers with an ambitious target by the incoming PML-N government to bring down next year's fiscal deficit by about 2.50% of GDP through a combination of revenue and expenditure control measures of over ₨. 550 billion. With an interaction with Dar, the senior economists and officials of the Finance ministry gave out an understanding that current year's budget deficit would be restricted within 7.5pc of GDP or less than ₨. 1.8 trillion. Instructions were given to bureaucrats by Dar that the deficit to be scaled down by about 2.5pc of GDP and desired the budget makers to design next year's budget on those lines.
Total revenue target for 2013–14 was ₨. 3.42 billion including share of provinces of ₨. 1.502 billion. Total Net Receipts were of ₨. 3.591 billion, out of which ₨. were bank borrowings. Detail of federal expenses and revenues is a follows:
2013–2014 Fiscal Budget
On 13 June 2013, Dar presented the federal budget for 2013–14, which was termed as "business friendly". 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%. 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. 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.
The tax exemption for luxury cars was proposed to be abolished while 1200CC hybrid vehicles are being exempted form import duty. A concession of 50.01% had been proposed for 1200–1800CC hybrid vehicles. Recommendations were to include ₨. 20,000 tax be applicable on the purchase of 1000CC cars. 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. The non-tax income was set around ₨. 800 billion as the government had allocated ₨. 185 billion as energy subsidy.
Finance Minister Ishaq Dar maintained that the circular debt amounted to more than ₨. 500 billion was to be eliminated in 60 days. The budget proposes to abolish the ministers' discretionary funds. 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). 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. The rate of inflation will be kept under single digit and its targeted rate for 2013–14 has been fixed at 9.5%t. He said the government inherited a battered economy and the average rate of inflation stood at 13.1% in last five years."