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Pakistan’s Finance Minister Proposes Ambitious Budget Aimed at Economic Turnaround

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Pakistan’s Finance Minister Muhammad Aurangzeb unveiled the federal budget for the upcoming fiscal year, outlining a comprehensive plan with a total outlay of Rs18.9 trillion. This budget targets a 3.6% GDP growth while setting an ambitious Rs13 trillion tax collection goal. The proposed budget includes measures to raise taxes on salaried classes, remove tax exemptions, and broaden the tax base without unduly burdening existing taxpayers.

Aurangzeb highlighted the government’s efforts to align the budget with International Monetary Fund (IMF) guidelines to secure a larger and longer bailout. The budget also aims to secure Rs30 billion from privatization, expects debt servicing of Rs9.8 trillion, and projects a 6.9% budget deficit as a percentage of the GDP.

The finance minister emphasized the need for structural reforms, such as bolstering investment, economic output, and exports, to achieve sustainable economic stability. He stressed the shift towards a market-driven economy and the promotion of a savings-and-investment-based economic model to foster long-term growth.

However, the budget session faced a delayed start due to reservations from the PPP regarding development allocations, underscoring the significance of collaboration and sustained efforts to achieve economic goals. Subsequent to the budget presentation, a general debate on the budget is set to commence, leading up to the final vote on the budget at the end of June.

The budget proposal follows the recent release of the Pakistan Economic Survey 2023-24, which indicated challenges in meeting previous budget targets despite unprecedented growth in the agriculture sector. As such, the proposed budget aims to address economic challenges and stimulate growth while prioritizing collective efforts and sustained economic reforms to achieve long-term economic stability.

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