Hafeez Sheikh announces Budget 2011-12, economic forecasts

ISLAMABAD: Finance Minister Abdul Hafeez Sheikh presented Pakistan's federal budget to parliament on Friday, for the coming financial year beginning in July.

Following are the highlights of the budget in a document:

PROJECTIONS

- The 2011/12 budget outlay is 2.767 trillion rupees ($32 billion), up 14.2 percent from the fiscal year 2010-11.

- Total revenue (tax revenue and non-tax revenue) is targeted at 2.732 trillion rupees, out of which the Federal Board of Revenue aims to collect 1.952 trillion rupees, compared with 1.588 trillion in fiscal year 2010-11.

- Defence spending will increase to 495 billion rupees for the fiscal year 2011-12, compared with 442 billion rupees in the year ending June 30.

- External receipts are estimated at 414 billion rupees, an increase of 7.1 percent over budget estimates for the fiscal year 2010-11.

- The size of the public sector development programme (PSDP) is allocated at 730 billion rupees.

MACROECONOMIC TARGETS

- The budget targets a fiscal deficit of 4 percent of gross domestic product (GDP) for the fiscal year 2011-12.

TAXATION AND DUTIES

- Ending special exemptions and zero ratings.

- Reduction of the general sales tax to 16 percent from 17 percent.

- Tax rate for commercial importers on value addition rises to 3 percent from 2 percent.

SUBSIDIES

- Pakistan will cut its subsidies to 166.5 billion rupees for 2011/12, compared with 395.8 billion rupees in the fiscal year 2010-11.

Copyright Reuters, 2011