ASIGNMENT NO: 2

Name: Enrollment: Name: Enrollment: Class: Subject: Topic:

Mohammad Abdullah 2010-e37 Abdul Qadeer 2010-e44 MBA (3rd quarter) Financial Management Silent Features of Budget, History of Budget, Definition of Budget, Financial Position of World Market. Mr. Khurram Shehzad 11-07-2011

Submitted To: Submission Date:

INSTITUTE OF MANAGEMENT SCIENCES UNIVERSITY OF BALUSHISTAN QUATTA.

Budget: A budget is a list of all planned expenses and revenues. It is a plan for saving and spending. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods. In other terms, a budget is an organizational plan stated in monetary terms. In summary, the purpose of budgeting is to: 1. Provide a forecast of revenues and expenditures, that is, construct a model of how our businesses might perform financially if certain strategies, events and plans are carried out. 2. Enable the actual financial operation of the businesses to be measured against the forecast. Budget origins and recent changes The origins of the Exchequer go back to the Norman period (1066-1154). The Norman system included both a Treasury and an Exchequer. The word 'exchequer' comes from the Latin 'scaccarium', meaning a chessboard. The name was given to the court dealing with the Kings finances because counters were moved on a square table to represent different amounts of spending. The first annual budgets date from the 1720s and Sir Robert Walpole. Income tax was first introduced in the 1798 Budget by William Pitt. Since May 1997 the Treasury presents two economic forecasts per year. In the spring the Chancellor presents the Budget, and in the autumn, the Pre-Budget Report (PBR) is released. The Budget box The Budget box is the red, leather-covered box containing the Budget speech. Traditionally the Chancellor is photographed on Budget day on the steps of 11 Downing Street holding up the Budget box. The Budget box or 'Gladstone box' was used to carry the Chancellor's speech from Number 11 to the House for over one hundred consecutive years. The wooden box was hand-crafted for William Ewart Gladstone, lined in black satin and covered in scarlet leather. Lord Callaghan was the first Chancellor to break with tradition in 1965 when he used a newer box. In July 1997, Gordon Brown became the second Chancellor to use a new box for the Budget. It was made by industrial trainees at Babcock Rosyth Defense Ltd ship and submarine dockyard in Fife. The new box is made of yellow pine, with a brass handle and lock, covered in scarlet leather and embossed with the Royal initials and crest and the Chancellor's title.

Pakistan Budget 2011-2012

Short Review of Budget 2011 - 2012

BUDGET 2011-2012 (Rs. In Billion)

S. S. RECEIPTS EXPENSES No. No 1. Tax revenue 2074 1. Interest payment Non tax 2. 658 2. External loans Revenue 3. Total Revenue 2732 3. Pension Less Provincial 4. (1203) 4. Defense Expenses share 5. Net Revenue 1529 5. Grants, Transfer Capital 6. 396 6. Allowances revenues External 7. 414 7. Civil Government Stability Receipts Provincial 8. 125 8. Providing Salary and pension Surplus 9. Bank Loans 304 9. Federal PSDP Provincial Development Loans 10. and Grants Total Resources (5-9) 2767 11. Other Development Expenses Total Expenses (1-10) 791 243 96 495 295 166 203 25 300 55 97 2767

Following are important features of the Pakistan budget for Fiscal Year 2011-12: The total outlay of budget 2011-12 is Rs.2767 billion. The size is 14.2 per higher than the size of budget estimates of 2010-11. The resource availability during 2011-12 has been estimated at Rs. 2463 billion against Rs. 2256 billion in the budget estimates of the outgoing fiscal year. Net revenue receipts for 2011-12 have been estimated at Rs. 1529 billion indicating an increase of 11 percent over the budget estimates of fiscal year 2010-11. The provincial share in federal revenue receipts is estimated at Rs. 1203 billion during 2011-12 which is 16.4 per cent higher than the budget estimates for 2010-11. The capital receipts (net) for 2011-12 have been estimated at Rs. 396 billion against the budget estimates of Rs. 325 billion in 2010-11 indicating an increase of 11 percent. The external receipts in 2011-12 are estimated at Rs. 414 billion. This shows an increase of 7.1 per cent over the budget estimates for 2010-11. The overall expenditure during 2011-12 has been estimated at Rs. 2767 billion of which the current expenditure is Rs. 2315 billion and development expenditure at Rs. 452 billion. Current expenditure shows increase of less than one per cent over the revised estimates of 2010-11, while development expenditure will increase by 64.4 per cent in 2011-12 over the revised estimates of 2010-11.

The share of current expenditure in total budgetary outlay for 2011-12 is 83.7 per cent as compared to 89 per cent in revised estimates for 2010-11. The expenditure on General Public Services (inclusive of debt servicing transfer payments and superannuation allowance) is estimated at Rs. 1660 billion which is 71.1 per cent of the current expenditure. The size of Public Sector Development Program (PSDP) for 2011-12 is Rs. 730 billion. While for Other Development Expenditure an amount of Rs. 97 billion has been allocated. The PSDP shows an increase of 58 per cent over the revised estimates of 2010-11. The provinces have been allocated an amount of Rs. 430 billion for budget estimates 2011-12 in their PSDP as against Rs. 373 billion in 2010-11. Some of the Highlights of the Budget are as: 15% increase in government employees salaries and 15-20% increase in pension Government decided to increase up to 15 percent in the salaries of government employees and 15 to 20 percent raise in pensions; Federal Finance Minister Dr. Abdul Hafeez Sheikh said this during his budget speech in the National Assembly on Friday. Proposal is also approved to revise the pay scales after merging the ad hock relief given till 2009. An amount of Rs.10 billion has been allocated to Earthquake Reconstruction and Rehabilitation Authority (ERA) in the PSDP 2011-12.

Rs.1100 million allocated for New Gawadar International Airport. The government has allocated Rs.1100 million under Public Sector Development Program (PSDP) for New Gawadar International Airport during the year 201112.According to details, the total estimated cost of the project is Rs.7675 million which included Rs.1464 million of foreign loan. The total expenditure of the project up to June 2011 is Rs. 485.032 million while throw forward amount as on 01.07.2011 is Rs.7189.968 million. Out of total allocation for the year 2011-12, Rs.220 million is foreign loan while Rs.880 million has been arranged from own resources. Rs 40 billion allocated for HEC The government has allocated Rs 40 billion for Higher Education Commission (HEC) in Public Sector development Programmes (PSDP) 2011-12. According to the budgetary document, an amount of Rs 679.895 million has been allocated for the six new schemes of HEC while an amount of Rs 13320.105 has been allocated for 166 ongoing schemes. Among the new schemes, Rs 300.000 million have been allocated for establishment of a university in Malakand / Swat, Rs. 200.000 million for Indigenous PhD Fellowship for 5000 Scholars (Phase-II), Rs. 60.000 million for establishment of a university at Turbut, Rs 50.000 million for National Defense University and Rs. 49.895 million for establishment of a university at Loralai.

General Sales Tax (GST) GST (General Sales Tax) decreased from 17% to 16% Taxable Amount Tax will be implemented on annual amount of 350,000 instead of 300,000. Withdrawal of cash Tax rate on withdrawal of cash decreased from 0.3% to 0.2% Increase in conveyance allowance For government employees (i.e. from grade 1 to 15) 25% conveyance allowances increased. Electricity, Utility Stores, and other Corporations, the Subsidy reduced to more than a half. The subsidy for electricity, utility stores, and other corporations reduced from 395 billion to 166 billion.

References: www.colunmpk.com www.opfblog.com (A blog of overseas Pakistani friends) www.cssforum.com.pk (Civil Service of Pakistan)

Population (December 21, 2010): 6,889,167,846 Unemployment: Unemployment rate: 8.7% (2009 EST.). 30% (2007 est.) combined unemployment and underemployment in many non-industrialized countries; and in developed countries typically 4%12% unemployment. GDP (Gross Domestic Products) GDP real growth rate: 3.2% (2008), 3.1% p.a. (200007), 2.4% p.a. (199099), 3.1% p.a. (198089) GDP (PPP): US$74.00 trillion (2010 EST.) Annual growth of per capita GDP (PPP): -0.8% (2009 EST) GDP/capita (PPP): $10,500 GDP (Currency): $61.96 trillion (2010 EST.) GDP/capita (Currency): $7,178 People Paid Below $2 per day: ~3.25 billion (~50%) Inflation rate (consumer prices): developed countries 1% to 4% typically; developing countries 5% to 60% typically; national inflation rates vary widely in individual cases, from declining prices in Japan to hyperinflation in several Third World countries (2003) Industrial production growth rate: 3% (2002 EST.)Yearly electricity production: 15,850,000 GWh (2003 est.), 14,850,000 GWh (2001 EST.) Yearly electricity consumption: 14,280,000 GWh (2003 est.), 13,930,000 GWh (2001 EST.) Oil production: 79,650,000 bbl/d (12,663,000 m3/d) (2003 est.), 75,460,000 barrels per day (11,997,000 m3/d) (2001) Oil consumption: 80,100,000 bbl/d (12,730,000 m3/d) (2003 est.), 76,210,000 barrels per day (12,116,000 m3/d) (2001) Oil proved reserves: 1.025 trillion barrel (163 km) (2001 EST.) Natural gas production: 2,569 km (2001 EST.) Natural gas consumption: 2,556 km (2001 EST.) Natural gas proved reserves: 161,200 km (1 January 2002) Yearly exports: $12.4 trillion (2009 EST.) Yearly imports: $12.29 trillion (2009 EST.) Business analysis: it is the discipline of identifying business needs and determining solutions to business problems. The example of business analyses is as under 1. Enterprise analysis or company analysis 2. Requirements planning and management 3. Requirements elicitation 4. Requirements analysis and documentation 5. Requirements communication 6. Solution assessment and validation Resource: Wikipedia