National Assembly approves IMF-aligned budget FY24

The National Assembly passed Federal Budget 2023-24 on Sunday after incorporating significant amendments to the Finance Bill 2023 in a last-ditch effort to complete the pending 9th review of the International Monetary Fund (IMF) programme.

The budget was approved during a session that lacked a quorum, with only 70 lawmakers on the treasury benches and two on the opposition benches.

As the session started, Finance Minister Ishaq Dar defended the government’s move to implement various reforms in the pensions scheme.

“If someone has a job on a contract then he will have to choose between the two pensions. This should’ve been corrected a long time ago,” he said. “It is a matter of principle that you have the right to one pension.”

Dar said their widowed spouse would receive the stipend when a pensioner died. But once the spouse dies, their dependents would get a pension for 10 years after which it will end.

“Our pension bill went to 800bn in this budget. It is a huge amount. It used to be half a few years ago,” Dar said, adding that these reforms were the need of the time.

On Saturday, the government revised the budget for FY24 by increasing new taxes to Rs438 billion, Rs223 billion on June 9, 2023, and new additional taxes of Rs215 billion, besides slashing expenditure by Rs85 billion – in an effort to complete the pending 9th review of the International Monetary Fund (IMF) programme.

Speaking on the floor of the house, Finance Minister Ishaq Dar said that the changes in the budget were made after Prime Minister Shehbaz Shehbaz’s meeting with the Managing Director (MD) IMF and subsequent discussions of the economic team with the Fund some changes have been made in the budget to complete the pending review.

He said that Rs215 billion in additional new taxes are being imposed and expenditures are being reduced by Rs85 billion. He maintained that there would be no impact of these changes on the development budget and an increase in the salary and pension of the government employees.

He said that after these changes, the Federal Board of Revenue (FBR) tax collection target had been revised upward to Rs9, 415 billion for the next fiscal year from earlier projected at Rs9200 billion, and provinces' share has been increased from Rs5276 billion to Rs5399 billion.

The finance minister said that the federal government’s expenditures have been increased to Rs14,480 billion from Rs14,460 billion, whereas, pension allocation is to be increased from Rs751 billion to Rs801 billion.