KARACHI: Institute of Chartered Accountants of Pakistan (ICAP) is projecting the budget deficit to 7.52 percent of GDP in FY 2021-22 with an expected jump in federal budget deficit by Rs 127 billion.
Speaking at a budget seminar organised in collaboration with ICAP by Council of Economic and Energy Journalists (CEEJ) at KPC on the other day, ICAP vice president Ashfaq Tola said the institute in its model federal budget 2021-22 was expecting the deficit to rise to Rs 3565 billion in 2021-22, projecting the budget deficit to 7.52 percent of GDP in next fiscal year.
Highlighting the ICAP model federal budget 2021-22, he said the institute has recommended adopting ‘farm to market’ approach through federal and provincial coordinating body and eliminating the role of middleman and facilitating farmers to get fair prices of their products.
He said the country’s overall economy performed well during last year despite the pandemic and the central bank also played an imperative role in the economic growth.
The ICAP in its first-ever model federal budget 2021-22 proposed to increase the defence budget by 15 percent from Rs 1289 billion to Rs 1482 billion in 2021-22 and projected that non-tax revenues would also rise by 10 percent to Rs 1220 billion.
Considering the utilization of Rs 175 billion against Rs 650 billion federal PSDP for the ongoing fiscal year, the ICAP assumed that the federal PSDP would be Rs. 386 billion during 2021-22. The government is targeting high GDP growth hence ICAP recommended not to cut the federal PSDP.
The ICAP assumed a 5 percent increase in government expenditures and projected Rs 500 billion would be allocated for the next fiscal year besides the subsidies are also expected to be enhanced by 139 percent or Rs. 291 billion to Rs. 500 billion in the coming fiscal year.
The ICAP also suggested the government to extend the amnesty granted to the construction industry by December 2021 and urged to offer similar incentive packages to the large-scale manufacturing sector to maximize its performance.
Copyright Business Recorder, 2021