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The Budget in Brief presents a summary of the Federal Budget 2013-14. It is designed to provide, in a very concise way, essential information on revenues and expenditures budgeted for Financial Year 2013-14 in juxtaposition with budget estimates and revised estimates for the outgoing Financial Year 2012-13. Detailed information is available in the relevant budget documents. Readers who need a one-page snapshot of the federal budget will find the Budget at a Glance given at the end of this document to be of great value. As in the case of the previous four financial years, indicative ceilings for the current and development budgets were issued to all Principal Accounting Officers of the Federal Government for a three-year Medium Term Budgetary Framework (MTBF), which was introduced in Financial Year 2009-10. The budget estimates for Financial Year 2013-14 were then finalised in consultation with various Federal Ministries as well as Provincial Governments. The budgeting and accounting classification system used in the budget remains the same which was adopted under the New Accounting Model introduced in Financial Year 2004-05. Moreover, from Financial Year 2009-10 onwards, the Government of Pakistan is following a system of Output Based Budgeting. In conformity with this approach, the budget is formulated in terms of service delivery (outputs) expected from budgetary allocations and the projected effects of these services on target populations (outcomes) over the Medium Term. Performance of Federal Government Ministries is then evaluated against precisely defined key performance indicators. Medium Term macroeconomic indicators have also been included in this document to provide the strategic economic perspective which contextualises the budget 2013-14. For the convenience of readers, some additional information regarding subsidies, loans and advances has been shown separately. After approval by the Parliament, all budget books including the Budget in Brief will be uploaded on the website of the Ministry of Finance: www.finance.gov.pk. I hope that this document will prove to be easily accessible and useful for all. Waqar Masood Khan Secretary to the Government of Pakistan Finance Division Islamabad, the 12th June, 2013
CONTENTS
Page Chapter 1: Review of the Budget 2012-13 Salient Features Summary - Budget and Revised Estimates Resources - Internal Resources - Net Capital Receipts - External Resources Expenditure - Current - Development Chapter 2: The Budget 2013-14 Salient Features Comparative Budgetary Position Chapter 3: Resource Position 2013-14 Internal Resources - Revenue Receipts - Tax Revenue - Non-Tax Revenue - Net Capital Receipts - Estimated Provincial Surplus - Net Federal Transfers to Provinces External Resources Chapter 4: Provincial Share in Federal Revenue Receipts NFC Award President's Order No. 5 of 2010 Federal Transfers and Provincial Share 1 1 2 3 3 4 5 6
7 7 8 9 10 10 11 12 13 14 15 16 16 17 21
_______________________________________________________________ Contd.........
CONTENTS
Chapter 5: Current Expenditure 2013-14 Current Expenditure (Summary) Comparative Position (Comparison) General Public Service Defence Affairs and Services Public Order and Safety Affairs Economic Affairs Environment Protection Housing and Community Amenities Health Affairs and Services Recreational, Culture and Religion Education Affairs and Services Social Protection Subsidies & Grants / Transfers Details of Subsidies Details of Grants and Transfers Loans and Investments Current Loans and Advances Development Loans and Advances Current Investments Public Sector Development Programme Salient Features of PSDP Size of PSDP Other Development Expenditure Chapter 9: Medium Term Budgetary Framework Macroeconomic Indicators Working of Fiscal Deficit and Budget 2013-14 Budget at a Glance 2013-14 22 22 23 24 25 26 27 28 28 29 30 31 32 33 33 35 37 37 38 39 40 40 41
43 44 46
Chapter 6:
Chapter 7:
Chapter 8:
47 49
j) The size of Public Sector Development Programme (PSDP) for 2012-13 was Rs 873 billion. Out of this, Rs 513 billion was allocated to provinces. Federal PSDP 2012-13 was estimated at Rs 360 billion, out of which Rs 207 billion for Federal Ministries/Divisions, Rs 80 billion for Corporations, Rs 36 billion for Special Programmes, and Rs 10 billion for Earthquake Reconstruction and Rehabilitation Authority (ERRA). k) The other development expenditure outside PSDP amounting to Rs 154 billion was budgeted for 2012-13. l) To meet expenditure, bank borrowing was estimated at Rs 484 billion, which was at lower side when compared with revised estimates 2012-13. 1.2 Table-1 below presents a summary of comparative position of the budget and revised estimates for financial year 2012-13:
EXPENDITURE - Current Expenditure - Development Expenditure Federal PSDP Development Loans & Grants to Provinces Other Development Expenditure (Outside PSDP) BANK BORROWING
A.
B.
NON-TAX REVENUE - Income from Property and Enterprise - Receipts from Civil Administration and Other Functions - Miscellaneous Receipts Gross Revenue Receipts Less Provincial Share Net Revenue Receipts
1.4 The tax revenue was estimated for budget 2012-13 at Rs 2,503,575 million, which decreased to Rs 2,124,575 million or by 15.1% in revised estimates 2012-13. The non-tax revenue was estimated for 2012-13 at Rs 733,252 million, which decreased to Rs 711,987 million or by 2.9% in revised estimates 2012-13. 1.5 After deducting the provincial share, the net revenue receipts were estimated at Rs 1,777,902 million in the budget 2012-13. These are now estimated at Rs 1,615,540 million in the revised estimates 2012-13 i.e. a decline of 9.1%.
I.
RECEIPTS ( A + B ) A. Federal Consolidated Fund - Recovery of Loans - Permanent Debt - Floating Debt B. Public Account
II.
EXTERNAL RESOURCES
1.7 The Government obtains foreign loans and grants to use for capital and development expenditure. The external loans for 2012-13 were budgeted at Rs 274,858 million, which are now projected at Rs 214,461 million in revised estimates i.e. decline of 22%. This decline is mainly due to less receipts from Programme Loans, Islamic Development Bank and Other Aid. 1.8 External grants also reduced from Rs 109,101 million in the budget estimates 2012-13 to Rs 29,032 million in the revised estimates 2012-13 or by 73.4% due to less receipts from privatisation proceeds, etc. 1.9 Overall external resources were estimated at Rs 383,959 million, which declined to Rs 243,493 million or by 36.6% in the revised estimates 2012-13. Table-4 below presents the details:
EXPENDITURE
1.10 The revised estimates 2012-13 of the overall expenditure are Rs 3,478,354 million showing an increase of 8.6% over the budget estimates 2012-13 at Rs 3,202,999 million. 1.11 Table-5 below shows the comparative position of the budget and revised estimates of current and development expenditure for the year 2012-13:
DEVELOPMENT - Federal PSDP - Other Development Expenditure (Outside PSDP) - Development Loans & Grants to Provinces TOTAL EXPENDITURE (A + B):
j) The size of Public Sector Development Programme (PSDP) for 2013-14 is Rs 1,155 billion. Out of this, Rs 615 billion has been allocated to provinces. Federal PSDP has been estimated at Rs 540 billion, out of which Rs 296 billion to Federal Ministries / Divisions, Rs 115 billion to Corporations, Rs 5 billion to Special Programmes, Rs 115 billion to New Developmet Initiatives and Rs 10 billion to Earthquake Reconstruction and Rehabilitation Authority (ERRA). k) The other development expenditure outside PSDP for 2013-14 has been estimated at Rs 172 billion. l) To meet expenditure, bank borrowing has been estimated at Rs 975 billion which is lower than the revised estimates of 2012-13 at Rs 1,576 billion. 2.2 Table-6 below presents the comparative position of 2012-13 (budget & revised) and 2013-14 (budget).
Budget 2012-13 2,719,188 2,335,229 1,777,902 477,779 79,548 383,959 3,202,999 2,611,940 591,059 360,000 76,771 154,288 483,811
2,395,978
Revised 2012-13 1,902,815 1,659,322 1,615,540 105,954 (62,172) 243,493 3,478,354 2,907,053 571,300 388,407 75,505 107,388 1,575,541
2,719,794
Budget 2013-14 3,010,453 2,434,035 1,917,708 493,226 23,101 576,419 3,985,437 3,196,082 789,355 540,000 77,540 171,815 974,987
2,829,321
ii)
A.
INTERNAL RESOURCES
10
11
*TAX REVENUE ( I + II) I. Direct Taxes - Income Tax - Workers Welfare Fund - Income Support Levy II. Indirect Taxes - Customs - Sales Tax - Federal Excise - Petroleum Levy - ICT Taxes - Airport Tax * Out of which F.B.R. collection is:
12
13
14
3.8 The net transfers to provinces are Rs 1,679,996 million in the budget estimates 2013-14, while they are estimated at Rs 1,545,546 million in the budget estimates 2012-13 and Rs 1,394,516 million in revised estimates 2012-13.
15
EXTERNAL RESOURCES 3.9 The government obtains loans and grants to bridge the gap between the receipts and expenditure. The external resources for 2013-14 have been budgeted at Rs 576,419 million, which are higher by 136.7% than the revised estimates 2012-13 and 50.1% than the budget estimates 2012-13. Table-13 below presents the details of receipts from external resources.
16
17
4.4 The detail of releases made to Government of Balochistan from the Divisible Pool over the last three financial years is as under: (Rs in Billion)
FY FBR's Tax Collection Target Shares as per Budgetary Projection [based on FBR's Target] Share as per actual tax collection reported by FBR Addl. Amount Transferred by Federal Govt. from its own Resources
2010-11 83.000 1667.000 10.934 72.065 2011-12 92.221 1952.000 1.035 93.256 *2012-13 114.206 69.159 2338.000 20.835 Total 5957.000 290.462 233.445 32.804 * Provisional: may vary depending on the collection for the Month of June, 2013.
4.5 The 7th NFC Award has been given legal cover through President's Order No.5 of 2010, which is reproduced as follows:
ORDER
to provide for distribution of revenues and certain grants WHEREAS in pursuance of clause (1) of Article 160 of the Constitution of the Islamic Republic of Pakistan hereinafter referred to as the Constitution, the President, by the Finance Division's Notification No. S.R.O. 739(I)/2005, dated 21st July 2005, as modified by the said Division's Notification No. S.R.O. 693(I)/2009, dated 24th July 2009, appointed a National Finance Commission to make recommendations, among other matters, as to the distribution between the Federation and the Provinces of the net proceeds of certain taxes; AND WHEREAS the said Commission recommendations with regard to the said distribution; has also submitted its
NOW, THEREFORE, in pursuance of clauses (4) and (7) of Article 160 of the Constitution, the President is pleased to make the following Order: 1. Short title and commencement. (1) This Order may be called the Distribution of Revenues and Grants-in-Aid Order, 2010.
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(2)
2. Definitions. In this Order, unless there is anything repugnant in the subject or context, (a) "net proceeds" means, in relation to any tax, duty or levy, the proceeds thereof reduced by the cost of collection as ascertained and certified by the Auditor General of Pakistan; and "taxes on income" includes corporation tax but does not include taxes on income consisting of remuneration paid out of the Federal Consolidated Fund.
(b)
3. Distribution of Revenues.(1) The divisible pool taxes in each year shall consist of the following taxes levied and collected by the Federal Government in that year, namely: (a) (b) (c) (d) (e) (f) (g) (h) taxes on income; wealth tax; capital value tax; taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed; export duties on cotton; customs duties; federal excise duties excluding the excise duty on gas charged at well-head; and any other tax which may be levied by the Federal Government.
(2) One percent of the net proceeds of divisible pool taxes shall be assigned to Government of Khyber Pakhtunkhwa to meet the expenses on war on terror. (3) After deducting the amounts as prescribed in clause (2), of the balance amount of the net proceeds of divisible pool taxes, fifty-six percent shall be assigned to provinces during the financial year 2010-11 and fifty-seven and half percent from the financial year 2011-12 onwards. The share of the Federal Government in the net proceeds of divisible pool shall be forty-four percent during the financial year 201011 and forty-two and half percent from the financial year 2011-12 onwards. 4. Allocation of shares to the Provincial Governments.(1) The Province -wise ratios given in clause (2) are based on multiple indicators. The indicators and
19
their respective weights as agreed upon are: (a) (b) (c) (d) Population Poverty or backwardness Revenue collection or generation Inverse population density 82.0% 10.3% 5.0% 2.7%
(2) The sum assigned to the Provincial Governments under Article 3 shall be distributed amongst the Provinces on the basis of the percentage specified against each: (a) (b) (c) (d) Balochistan Khyber Pakhtunkhwa Punjab Sindh Total: 9.09% 14.62% 51.74% 24.55% 100.00%
(3) The Federal Government shall guarantee that Balochistan province shall receive the projected sum of eighty-three billion rupees from the provincial share in the net proceeds of divisible pool taxes in the first year of the Award. Any shortfall in this amount shall be made up by the Federal Government from its own resources. This arrangement for Balochistan shall remain protected throughout the remaining four years of the Award based on annual budgetary projections. 5. Payment of net proceeds of royalty on crude oil.Each of the provinces shall be paid in each financial year as a share in the net proceeds of the total royalties on crude oil an amount which bears to the total net proceeds the same proportion as the production of crude oil in the Province in that year bears to the total production of crude oil. 6. Payment of net proceeds of development surcharge on natural gas to the Provinces.(1) Each of the Provinces shall be paid in each financial year as a share in the net proceeds to be worked out based on average rate per MMBTU of the respective province. The average rate per MMBTU shall be derived by notionally clubbing both the royalty on natural gas and development surcharge on Gas. Royalty on natural gas shall be distributed in accordance with clause (1) of Article 161 of the Constitution whereas the development surcharge on natural gas would be distributed by making adjustments based on this average rate. (2) The development surcharge on natural gas for Balochistan with effect from 1st July 2002, shall be re-worked out hypothetically on the basis of the formula given in clause (1) and the amount, subject to maximum of ten billion
20
rupees, shall be paid in five years in five equal installments by the Federal Government as grants to be charged on the Federal Consolidated Fund. 7. Grants-in-Aid to the Provinces.There shall be charged upon the Federal Consolidated Fund each year, as grants-in-aid of the revenues of the province of Sindh an amount equivalent to 0.66% of the provincial share in the net proceeds of divisible pool as a compensation for the losses on account of abolition of octroi and zilla tax. 8. Sales tax on services.NFC recognizes that sales tax on services is a Provincial subject under the Constitution of the Islamic Republic of Pakistan, and may be collected by respective Provinces, if they so desired. 9. Miscellaneous.(1) NFC also recommended increase in the rate of excise duty on natural gas to Rs10.0 per MMBTU. Federal Government may initiate necessary legislation accordingly. (2) The NFC recommended that the Federal Government and Provincial Governments should streamline their tax collection systems to reduce leakages and increase their revenues through efforts to improve taxation in order to achieve a 15% tax to GDP ratio by the terminal year i.e. 2014-15. Provinces would initiate steps to effectively tax the agriculture and real estate sectors. Federal Government and Provincial Governments may take necessary administrative and legislative steps accordingly. (3) Federal Government and Provincial Governments would develop and enforce mechanism for maintaining fiscal discipline at the Federal and Provincial levels through legislative and administrative measures. (4) The Federal Government may assist the Provinces through specific grants in times of unforeseen calamities. (5) The meetings of the NFC may be convened regularly on a quarterly basis to monitor implementation of the award in letter and spirit. 10. Repeal. The Distribution of Revenues and Grants-in-Aid Order, 1997 (P.O. No. 1 of 1997), and the Distribution of Revenues and Grants-in-Aid, Order, 2010 (P.O. 4 of 2010) are hereby repealed. ASIF ALI ZARDARI, President."
21
4.6 The following table shows the estimated transfers to the Provincial Governments and their share in federal taxes and straight transfers including GST on Services during the financial year 2012-13 and 2013-14.
* The indicative shares of GST on Services are provisional at this stage. These shares would be revised and adjusted in the light of decision taken after discussions with the provinces. ** Inclusive 1% War on Terror
22
TABLE - 15 SUMMARY
(Rs in Million) Classification (i) Interest Payment - Interest on Domestic Debt - Interest on Foreign Debt Pension - Military - Civil Budget 2012-13 925,775 845,600 80,175 129,067 98,218 30,849 545,386 543,823 1,564 312,301 56,739 255,562 208,595 239,854 35,000 2,395,978 215,962 2,611,940 Revised 2012-13 1,028,737 952,127 76,610 167,440 131,425 36,015 570,366 568,617 1,749 334,616 61,191 273,425 367,472 251,164 2,719,795 187,259 2,907,053 Budget 2013-14 1,153,539 1,064,524 89,015 171,263 132,728 38,535 627,226 625,336 1,890 337,165 51,363 285,802 240,434 274,693 25,000 2,829,321 366,761 3,196,082
(ii)
(iii) Defence Affairs and Services - Defence Services - Defence Administration (iv) Grants and Transfers - Grants to Provinces - Grants to Others (v) Subsidies
(vi) Running of Civil Government (vii) Provision for Pay and Pension Reforms CURRENT EXPENDITURE (i to vii): (viii) Foreign Loans Repayment TOTAL CURRENT EXPENDITURE: (includes foreign loans repayment)
23
5.2 The budget estimates for 2012-13 on account of current expenditure were Rs 2,611,940 million, which have now been revised upwards to Rs 2,907,053 million in revised estimates 2012-13. For budget 2013-14, current expenditure has been estimated at Rs 3,196,082 million, showing an increase of Rs 289,029 million or by 9.9% over the revised estimates 2012-13. 5.3 The bulk of expenditure falls under General Public Service. The expenditure against this head has been budgeted at Rs 2,357,401 million for 2013-14, which is 73.8% of current expenditure; whereas 19.6% has allocated for Defence Affairs and Services, and 2.5% for Public Order and Safety Affairs. 5.4 Table 16 below presents the comparative position of the budget and revised estimates of current expenditure for the year 2012-13 along with the budget estimates 2013-14.
24
25
Defence Administration Defence Services Employees Related Expenses Operating Expenses Physical Assets Civil Works Less Recoveries
26
PUBLIC ORDER AND SAFETY AFFAIRS Law Courts Police Fire Protection Prison Administration and Operation R & D Public Order and Safety Administration of Public Order
27
ECONOMIC AFFAIRS
5.9 The allocation under the head of Economic Affairs in the budget 2013-14 has been projected at Rs 52,262 million, which is higher than the revised estimates for 2012-13 by 5.1%, but lower by 2.6% as compared to budget estimates 2012-13. Major share of this head goes to Agriculture, Food, Irrigation, Forestry and Foods, which has been increased to Rs 20,430 million in budget estimates 2013-14 as compared with Rs 17,478 million in revised estimates 2012-13 and Rs 15,759 million in budget estimates 2012-13. Table 20 below provides the details under this head:
ECONOMIC AFFAIRS General Economic, Commercial and Labour Affairs Agriculture, Food, Irrigation, Forestry and Fishing Fuel and Energy Mining and Manufacturing Construction and Transport Communications Other Industries
28
ENVIRONMENT PROTECTION
5.10 Under the head of Environment Protection, an amount of Rs 924 million has been estimated for budget 2013-14 for Waste Water Management, which is higher by 25.5%, when compared with revised estimates 2012-13.
Community Development
29
5.12 Under the head of Health Affairs and Services, a total allocation of Rs 9,863 million has been made in the budget estimates 2013-14, which is higher by 25.7% and 24.9% respectively when compared with budget and revised estimates 2012-13. The allocation for hospital services forms the major component under this classification. Details are given in Table 21 below:
7,893
9,863
Medical Products, Equipment Hospital Services Public Health Services Health Administration
Appliances
30
6,267
6,633
6,950
Recreation and Sporting Services Cultural Services Broadcasting and Publishing Religious Affairs Administration of Recreation & Culture Information,
256
282
270
31
Pre-Primary & Primary Education Affairs Services Secondary Education Affairs & Services Tertiary Education Affairs and Services
Social Welfare & Special Education Div.
Subsidiary Services to Education Administration Education Affairs, elsewhere classified Services not
679
32
SOCIAL PROTECTION
5.15 Social protection has been allocated Rs 1,806 million in the budget 2013-14, which is higher by Rs 466 million as compared with budget estimates 2012-13, and by Rs 214 million when compared with revised estimates 2012-13.
SOCIAL PROTECTION
Administration Others
33
TABLE - 27 SUBSIDIES
(Rs in Million) Classification Budget 2012-13 134,970 120,000 870 4,000 10,000 100 50,317 50,000 317 Revised 2012-13 264,970 250,000 870 4,000 10,000 100 84,317 84,000 317 Contd. Budget 2013-14 165,100 150,000 3,000 12,000 100 55,000 55,000 -
Subsidy to WAPDA/PEPCO:
1 2 3 4 5
Inter-Disco Tariff Differential 12.5% GoP Share for Agri-Tubewells Tariff Differential for Agri-Tubewells in Balochistan Pick up WAPDA / PEPCO receivables from FATA Exchange Rate Differential for USAID's Grant to GENCOs
Subsidy to KESC:
6 7
Pick up KESC's Tariff Differential Pick up KESC's payable to PSO & PKGCL
34
SUBSIDIES
(Rs in Million) Classification Budget 2012-13 10 10 6,000 2,000 4,000 5,148 1,148 4,000 12,150 7,700 3,400 270 775 5 208,595 Revised 2012-13 0 6,000 2,000 4,000 6,194 2,694 3,500 5,991 1,750 3,192 270 775 5 367,472 Budget 2013-14 0 6,000 2,000 4,000 9,000 4,000 5,000 5,334 4,000 231 283 815 5 240,434
Subsidy to TCP:
8
Subsidy to USC:
9
Ramzan Package
10 Sale of Sugar
Subsidy to PASSCO:
11 Cost differential for sale of Wheat 12 Wheat Reserved Stock
Subsidy to Others:
13 Oil Refineries & OMCs / Others 14 Fauji Fertilizer Bin Qasim Ltd. 15 Sale of Wheat in FATA 16 Sale of Wheat in Gilgit Baltistan 17 Sale of Salt in Gilgit Baltistan
Total Subsidies:
35
I. GRANTS IN AID & MISC. A. SPECIAL GRANTS - Punjab - Sindh - Khyber Pakhtunkhwa - Balochistan B. LUMP PROVISION II. GRANTS TO OTHERS
Contingent Liabilities Miscellaneous Grants Pakistan Railways to meet their losses Remission of ZTBL loans Administration, etc, of HBFCL
36
Grants to Provinces for Emergency Relief Lump Provision for Relief etc. GoP Contribution to President Rozgar Scheme Competition Commission of Pakistan Reimbursement of TT Charges on Home Remittances Pakistan Remittance Initiatives Institute of Cost & Management Accountants of Pakistan, Karachi Grants to AJK Government Grant-in-Aid to Gilgit Baltistan Grant to Bait-ul-Maal Grant to Pakistan Steel Mills, Karachi Subsidy for Markup on Housing Loans Total Grants (I + II):
37
38
1 Development Loans and Advances 2 External Development Loans and Advances Total:
46,620
40,807
70,714
113,253 159,873
152,337 193,144
125,780 196,494
7.5 Development loans and advances have been kept at Rs 70,714 million in budget 2013-14 as compared with Rs 40,807 million in revised estimates 2012-13. 7.6 External development loans and advances have been estimated at Rs 125,780 million in the budget 2013-14 as against Rs 152,337 million in revised estimates 2012-13.
39
CURRENT INVESTMENTS
7.7 The federal current investments for the year 2013-14 have been estimated at Rs 184,461 million as compared with Rs 333,426 million in the revised estimates of 2012-13 and Rs 14,780 million in budget estimates 2012-13. The investment in 2013-14 is higher by Rs 169,681 million as compared with budget estimates 2012-13; however, it is lower by Rs 148,965 million when compared with revised estimates 2012-13. Table-31 provides the comparative position.
40
41
8.4 The following table-32 indicates details of the size of Public Sector Development Programme (PSDP).
42
SIZE OF PSDP
(Rs in Million) Classification 26 National Heritage & Integration Division 27 National Health Services, Regulations & Coordination Division 28 Pakistan Atomic Energy Commission 29 Pakistan Nuclear Regulatory Authority 30 Petroleum & Natural Resources Division 31 Planning & Development Division 32 Ports & Shipping Division 33 Production Division 34 Railways Division 35 Revenue Division 36 Science & Technological Research Division 37 States & Frontier Regions Division 38 Statistics Division 39 Textile Industry Division 40 Water & Power Division (Water Sector) B. Corporations 1 WAPDA (Power) 2 National Highway Authority (NHA) C. Special Programmes D. New Development Initiatives Total Federal PSDP (A to D) E. ERRA Federal PSDP including ERRA F. Provinces Total National PSDP (A to F): Budget 2012-13 75 39,167 400 268 37,840 325 612 22,877 807 1,311 16,000 140 227 47,192 80,382 29,655 50,727 27,000 350,000 10,000 360,000 513,000 873,000 Revised 2012-13 75 151 44,074 284 386 530 325 612 25,832 299 1,274 15,276 131 227 45,306 105,905 34,747 71,158 46,386 378,407 10,000 388,407 463,000 851,407 Budget 2013-14 12 25,739 52,300 316 50 10,659 500 1,100 30,965 533 2,173 18,500 220 315 57,840 114,482 51,443 63,039 5,000 115,000 530,000 10,000 540,000 615,000 1,155,000
43
44
45
9.4 Furthermore, the Federal Government has improved its budget preparation process through the MTBF. Under the reformed process:
The Finance and Planning & Development Divisions prepare a MediumTerm Macroeconomic Framework in consultation with various Government Ministries and the State Bank of Pakistan Based on the macroeconomic situation, the Finance Division articulates its policy priorities and prepares a Medium-Term Fiscal Framework The Finance and Planning & Development Divisions work out, for each Principal Accounting Officer, medium-term Indicative Budget Ceilings (IBCs) that align resource allocation with the Governments policy priorities These macroeconomic and fiscal frameworks, together with the IBCs, are presented to the Cabinet through the 'Budget Strategy Paper' (BSP) for approval The BSP is also shared with Parliamentary Standing Committees on Finance and Revenue as well as with political parties After approval of the BSP by the Cabinet, the Finance Division issues the 3year IBCs for recurrent and development budgets separately to each line ministry Based on these IBCs, ministries prepare their budgets that are reviewed for quality assurance by the Finance and Planning & Development Divisions The Secretaries of Finance, Planning & Development, and Economic Affairs Divisions jointly chair the Priorities Committee meetings that discuss policy and budget priorities with each Principal Accounting Officer The Annual Plan Coordination Committee (APCC) discusses the public sector investment proposals with the Federal and Provincial Governments The National Economic Council (NEC) approves the Public Sector Development Programme (PSDP) of the Federal and Provincial Governments
46
The finalised budget is presented in the Cabinet for endorsement and Parliament for appropriation.
MACROECONOMIC INDICATORS 9.5 Macroeconomic Indicators / Rolling Targets for 2013-16 are provided below:
4.3 9.5
3.6 7.5
(as percentage of GDP unless otherwise indicated) Total Revenue - Tax Revenue - FBR Tax Revenue Total Expenditure - Current - Development Fiscal Balance Revenue Balance Total Public Debt GDP at market prices (Rs in Billions) 14.3 10.9 10.1 18.9 14.6 4.4 -4.6 -0.3 56.6 23,655 13.2 9.9 8.8 22.0 16.5 4.2 -8.8 -3.3 63.5 22,909 14.0 10.6 9.5 20.3 15.2 5.1 -6.3 -1.2 61.3 26,001 14.0 11.4 10.4 18.9 13.8 5.2 -5.0 0.2 59.1 29,749 14.2 12.0 11.0 18.2 12.9 5.3 -4.0 1.3 55.2 34,622
47
WORKING OF FISCAL DEFICIT AND FINANCING BUDGET 2013-14 Rs in billion Working Deficit
A) Federal Revenue (net) B) Total Federal Expenditure (i+ii) i) Current Expenditure ii) Development and Net Lending (a+b+c) a) Federal PSDP b) Other Development Expenditure c) Net Lending 1,918 3,591
Financing of Deficit
Gross External Loans Less Repayments 576 408
2,829 762
367 41
540 172
169 1,482
50
-1,674 23
-1,651 -6.3%
% of GDP
48
EXPENDITURE
2,829 1,154
169 23
975
Net Lending Other Dev. Expenditure TOTAL RESOURCES (I to V) 3,591 TOTAL EXPENITURE (A+B)
50 172 3,591
Rs
2,475
billion
Glossary of Terms
Bank Borrowing Includes borrowing from the State Bank of Pakistan and Scheduled Banks Income from proceeds of borrowing, money received in repayment of loans, recoveries of advances and investments, proceeds of savings schemes, net receipts from transactions under deposit, and remittances Capital receipts minus disbursements Income from rents of government buildings, land, guest houses, and hostels, etc. Include interest payments, pension, defence affairs & services, grants & transfers, subsidies, and running of civil government Include federal PSDP, development loans & grants to provinces, and other development expenditure (outside PSDP) Income tax, workers welfare tax, capital value tax, and wealth tax Government investments, loans, advances and others, and repayment of short term credit Include project loans, foreign loans &credits, and foreign grants Financial support to provinces, organisations, and industries for contingent liability, to fulfill losses, remission of loans, etc
Capital Receipts
Development Expenditure
Direct Taxes
Disbursements
External Resources
Grants
Contd..
Glossary of Terms
Indirect Taxes Customs, sales tax, federal excise, petroleum levy, Islamabad Capital Territory (ICT) tax, and airport tax Include net revenue receipts, net capital receipts, and estimated provincial surplus Income from property and enterprises; receipts from civil administration and other functions; and miscellaneous receipts of the federal ministries, divisions and departments Provincial share in federal taxes and straight transfers Provincial government deposits with State Bank of Pakistan Sum of tax revenue and non-tax revenue (before excluding provincial share) Include internal resources and external financial
Internal Resources
Non-Tax Revenue
Provincial Share
Provincial Surplus
Resources
Gross revenue receipts minus provincial share Fee charged from students of the institutions under administrative control of government and from medical services provided by federal government hospitals and health institutions; and tuition fee / training fee charged by Human Resource Division Income from direct and indirect taxes Includes current expenditure and development expenditure