ISLAMABAD: Federal Minister for Finance, Dr. Abdul Hafeez Shaikh Saturday said that the main focus of the Federal Budget 2012-13 is to ensure continuity of microeconomic stability in the country in tandem with provision of relief to the poor and vulnerable segments of society.
Addressing the post-budget press conference, the Finance Minister said the government succeeded in maintaining macroeconomic stability for last couple of years and measures have been taken in this budget too to ensure its continuity.
Shaikh said the pace of inflation has been on declining trend for the last couple of years and it is projected to come down to single digit this year, hence leading towards microeconomic stability and helping mitigate the sufferings of the people.
The Federal Minister said that the government would ensures tax collection from all those who are liable to tax, adding that due to the efforts of the government the tax collection increased by Rs.400 billion during the current fiscal year, showing 25 percent increased.
He said another measures that the government has taken towards achieving the sustainibility of microeconomic stability is that it enhanced allocations through Public Sector Development Programme.
He said the Federal PSDP has been increased from Rs.300 billion to Rs.360 billion, an increase of 20% while all the PSDP allocations for the year 2011-12 were utilized that helped completion of about 200 projects.
He said the government was providing targeted subsidy to the poor and low income people of the country through various programmes including Benzair Income Support Programme (BISP) through which Rs.50 billion were provided during 2011-12 to 3.5 million families at the rate of Rs.1000 per family.
In addition, the government provided subsidy of Rs.50 on import of 1.2 million ton fertilizer to ensure food security in the country and as a result the country exported wheat and sugar and earned considerable foreign exchange.
The Federal Minister said the country was passing through difficult times and was also affected by the oil prices in the international market.
Regarding the power sector, the Finance Minister said the energy crisis was the outcome of negligence of last 12-14 years.
He said that government provided Rs.250 billion subsidy during 2011-12 to help reduce prices of electricity for the common people and would be providing Rs.183 billion during the upcoming financial year.
He said owing to increase in the oil prices in international market, the electricity generation cost was increasing in the country and the government was providing subsidy to share this burden and provide relief to people.
He said the government has taken measures and increased allocation in the current budget for the energy sector development, adding that the power sector was provided highest allocations in the PSDP.
He said the government has already added about 3500 megawatt electricity in the national grid system while work on several other projects is continuing to increase electricity generation.
Minister for Finance, Dr. Abdul Hafeez Shaikh said the government is trying to make the taxation system easier in order to facilitate the taxpayers.
He said the minimum tax limit for income tax has been increased from Rs. 300,000 to Rs. 400,000 annually and the people who have annual income of less than Rs. 400,000 would be exempted from paying income tax.
He said the procedure for paying income tax has been changed in a way that as many as 1.4 million tax-payers would get relief.
He said an employee who was paying Rs. 5000 tax on his total salary of Rs.50,000 would now pay only Rs.1500 on the same amount of salary.
The Minister said that the wealthy people who do not pay taxes, would now be forced to pay their taxes.
The Minister said the government has decided to give increase of 20 per cent on the salaries and pensions of government and its related departments' employees to help them cope with the inflationary pressure.
He said the government has also facilitated the business community by reducing different taxes besides, bringing about basic changes in sales tax system. He said that sales tax has been reduced to 16 percent level.
Dr. Abdul Hafeez Shaikh further said that on the demands of
businessmen, the turnover tax on the revenue on businessmen was also reduced from one per cent to 0.5 per cent which will help boost overall economic activities.
He said import duty on pharmaceutical and stationery was also reduced which will help reduce its prices.
He said the government has tried its best to make the budget a balanced one and it was prepared after consultation of all stakeholders.
The Minister said during the next fiscal year the government will create 100,000 employment opportunities and out of those 40,000 jobs would be allocated to masters degree holders whereas remaining 60,000 jobs would be fixed for the graduates of the country.
He said the an international institute will be established at the Prime Minister House and the Prime Minister will reside at smaller house.
He said the government has not increased its expenditures for the next year despite increasing inflation.
He said the government wants to introduce only two taxes that is sales tax and income tax while all other taxes would be abolished gradually.
He said the government reduced the federal excise duty on 15 items to zero level in the previous budget and during this budget 12 further items have been included in this list.
To a question the Finance Minister said the government was cognizant of the problems being faced by public servants due to price hike and hence it had been increasing their salaries accordingly.
The price indices during the ongoing year remained at 11%, while a 20% rise had been made in the salaries of employees in the budget for the year 2012-13, he added.
To another question, he said that the government was trying its level best to increase revenues besides rationalizing electricity and gas demand in the country.
He said price of imported gas would be doubled than the locally produced. He said that amount being obtained through cess would be spent upon gas pipelines from Iran or Central-Asia.
Replying to another question, he said that the incumbent government had added 3,500 mega watts to the national grid adding that work on several mega projects such as nuclear, hydro and solar, was underway to solve the energy crisis.
There is no problem to produce electricity; the problem is to produce it at a lower rate, he said.
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