ISLAMABAD: The government is expected to finalise budget 2020-21 tomorrow (Monday) as experts predicted more focus and allocation for the health sector and the decision to ban indirect subsidies, in accordance with the IMF’s demands.
“The estimated loss to GDP growth has been worked out at Rs2.6 trillion which will also be finalised in the June 8 meeting,” officials at one of the economic ministries said. The IMF has also asked the government to erode, once and for all, extending additional grants from the next budgetary year as these measures lead to distortions in the budgeted amounts.
The finalised outlay of the budget will also be fine-tuned in the federal cabinet that meets Tuesday. And the National Economic Council (NEC) that meets on Wednesday with Prime Minister Imran Khan in the chair will finalise the outlay of national development budget and targets of GDP growth for the next financial year after obtaining inputs from provincial governments.
The economic managers of the government will finalise the federal budget with projected growth targets of industrial, services and export sectors. According to official sources, the government has worked out the estimated damage to the economy at Rs2.6 trillion which will further be deliberated in the meeting to be held tomorrow. The meeting would also brainstorm the measures to be taken keeping in mind the expected losses to the economy.
The sources claimed that FBR is facing a shortfall of Rs900 billion in revenue in the wake of the adverse impact of COVID-19 spread. However, FBR’s overall tax to be collected in the ongoing fiscal ending June 30, 2020 is being estimated at Rs3,908 billion against the target of Rs5,500 billion. And the next tax revenue target will be set keeping in view the collection to be made in the current financial year.
The sources also claimed that the government has made its mind about ending the indirect subsidies and to do away with giving additional grants keeping in view the IMF’s demands.
The maximum amount will also be budgeted for the measures to be taken contain the COVID-19 spread. With more allocation for the health sector in the budget, the upgradation of hospitals and perpetual provision of all kinds of instruments to effectively take care of patients infected from COVID-19 and the frontline soldiers — doctors and paramedical staff. The sources said that more allocations will be diverted towards Ehsaas Programme to provide more solace to the vulnerable segments of the society and those who earn on day to day basis but because of COVID-19 they are not able to earn. The sources said that the finalised plan about the next budget will be presented in the next cabinet meeting that meets on June 9.
Annual Plan Coordination Committee (APCC) that met on June 4, has recommended to NEC the national development budget should be at Rs1,319 billion with federal PSPD at Rs536 billion along with provincial development outlay at Rs783 billion.
However, the final national development budget will be shaped up in the NEC meeting to be held on June 10, 2020, as in APCC meeting Balochistan agitated for not including the development schemes of paramount importance and in NEC meeting, chances are bright that Balochistan will be accommodated.
The APCC has already worked out and approved the projected GDP growth for 2020-21 is targeted at 2.3% with projected contributions from agriculture (2.9%), industry (0.1%) and services (2.8%). Howeer, the government economic managers will give the final touch to GDP growth target for next financial year in tomorrow’s meeting that will be presented in the federal cabinet meeting.