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Budget 2020: Five things you need to know

Budget 2020: Five things you need to know

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The Federal Government on Friday provided its budget for FY20-21, amidst the coronavirus ciris. The budget was presented by the Minister of Industries, Mr. Hammad Azhar and Prime Minister Imran Khan was also present during the session. Here are some of the important things to note from the budget:

1. No increase in Taxes

Given the impact of the coronavirus on businesses, the government has decided it will not increase any taxes for the upcoming year. This will serve as a sigh of relief to business owners who had seen a reduction in income. Furthermore, the government has announced an easing of taxes.

2. Contraction of the economy

For the first time in 68 years, Pakistan’s economy will go through a contraction. The main reason for this is the coronavirus, which has adversely affected business throughout the country, with industries such as the automobile sector seeing a reduction of 75% in sales.

3. No increase in salaries for government workers

Considering the impact of the contraction of the economy, the government has decided that there will be no increase in the salaries and pensions of government workers. Earlier projections of increase were based on a pre-covid economy, and are simply unfeasible in the current situation.

4. Government and IMF agree on FBR targets

The government and the International Monetary Fund agreed to keep FBR targets for next year around Rs. 4.95 trillion – of which 1.3 trillion would go towards defence, and an increase to 650 Billion for developmental growth projects. In addition, nearly 4 Billion have been allotted towards improving the education sector, with innovations such as technology.

5. Rs. 70 Billion allotted for coronavirus impact

The government has approved Rs. 70 Billion for a “special programme to mitigate Covid-19 impact” for FY20-21. The main focus of this money would be the provision public facilities such as sewage, education, waste cleaning, drinking water and health facilities.

Opposition members such as Sherry Rehman have called the budget an “accounting exercise” done by the government and IMF, who have allegedly slashed funding to provinces who provide money for social services. She also claims that it was an opportunity to focus on other aspects such as health becoming a certain percentage of the GDP, but the government is supposedly lacking leadership in this regard. Other opposition members have called the Budget 2020 an “anti-human” budget.