The outgoing PML-N government presented the 2018-19 budget with outlay estimated at Rs5932.5 billion at the National Assembly on Friday amid strong protest staged by opposition. The presentation of the budget for the entire year had become a contentious issue in the run up to the budget. Opposition parties contended that the incumbent government which has little over a month remaining in its tenure should present the budget for a few months only. However this idea was rejected by the ruling party, as it went ahead with the budget presentation. The budget announcement meant the Pakistan Muslim League-Nawaz (PML-N) now becomes the country’s first political party to announce six budgets in its tenure.
The total 2018-19 budget outlay is estimated at estimated at Rs5932.5 billion. The federal gross revenue receipts are estimated at 5661 billion rupees as compared to 4992 billion rupees in the outgoing year. This includes FBR’s tax estimates of 4435 billion rupees as against revised estimates of 3935 billion rupees for the current financial year. Out of the total revenues, the provincial governments share is estimated to 2590 billion rupees as compared to 2316 billion rupees revised estimates for the current financial year. After transfer to the provincial governments, the net revenue of the federal government is estimated at 3070 billion rupees for the next year as compared to revised estimates of 2676 billion rupees in the current financial year. The interest payments for next year have been budgeted at 1620 billion rupees against the revised target of 1526 billion rupees for the outgoing year. The defense budget is proposed at 1100 billion rupees against the revised budget of 999 billion rupees in the outgoing year. Budget deficit will be four point nine percent of the GDP as opposed to five point five percent of GDP of revised budget estimates in the outgoing year.
One worrying aspect is the proposal of an increase of nearly 200% in petroleum levy in the new budget, for fiscal year 2018-19. Under the Finance Bill 2018, tax on diesel, petroleum, crude oil and high-octane fuel would be increased from Rs10 per litre to Rs30. The same increase would be imposed on the levy of light speed diesel and gasoline, while levy on local liquefied petroleum gas could go up by 328%. According to experts, the increase is feared to cause a rapid rise in inflation.
The coming government may find it hard to meet the revenue requirements in the face of elevated current expenditures.