13/06/2024
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*Federal Budget 2024-25 Overview*
*Total Budget Outlay:* Rs18.887 trillion
*Tax Collection Target:* Rs13 trillion
*Projected GDP Growth:* 3.6%
*Budget Deficit:* 6.9% of GDP
*Increase from Previous Year:* 30%
*Finance Minister:* Muhammad Aurangzeb
*Presented:* June 12, 2024
*Prime Minister:* Shehbaz Sharif
*Key Points*
1. *Salaries and Pensions:*
- Increase of 25% for grades 1 to 16.
- Increase of 20% for grades 17 to 22.
- Minimum monthly salary increased from Rs32,000 to Rs37,000.
2. *Major Allocations:*
- *Defense:* Rs2.122 trillion (14.99% increase from last year).
- *Energy Sector:* Rs253 billion for development projects.
- *Kissan Package:* Rs5 billion for farmers.
3. *Social Programs:*
- Benazir Income Support Program (BISP) fund increased by 27% to Rs593 billion.
- Increase in eligible persons from 9.3 million to 10 million.
- Education scholarship program to include 10 million more children.
4. *Taxation:*
- Advance tax on vehicle registration to be based on price.
- Increase in advance and withholding tax for non-filers from 1% to 2.25%.
- Sales tax increased to 18% on branded shoes, clothes, and various mobile phones.
- Import tax exemptions removed for luxury vehicles and other items.
5. *Sector-Specific Measures:*
- Exemption on import tax for the solar panel industry.
- Discounts on import tax for fish and shrimp breeding.
- Increase in FED on cement from Rs2 per kg to Rs3 per kg.
- Property tax increased by 5% on new plots and properties.
6. *State-Owned Enterprises (SOEs):*
- Plans to restructure and privatize SOEs.
- Closure of the Public Works Department (PWD).
7. *Pension Reforms:*
- New pension scheme for new government employees.
- Monthly salary deductions for the pension fund.
8. *Inflation and Economic Measures:*
- Inflation decreased from 38% to 11.8%.
- Efforts to achieve single-digit inflation continue.
- Federal Board of Revenue (FBR) reforms to expand the tax net.
9. *Sector Investments:*
- Rs21 billion for the 1200 MW Jamshoro Power Plant.
- Rs11 billion for the improvement of the NDTC system.
10. *Miscellaneous:*
- Abolition of all vacant posts in grades 1 to 16, saving Rs45 billion annually.
- Imposition of Rs44,000 tax on material used in cigarette filters to curb fake cigarette sales.
*Opposition and Government Reactions*
- *Opposition:* Protests by the Sunni Ittehad Council (SIC).
- *Government:* Emphasis on achievements amidst economic challenges, aiming for sustainable growth and stability.