Text of budget 2020-21 speech

Following is the text of budget speech of Minister for Industries and Production Hammad Azhar, delivered at the National Assembly on Friday.

Bismillah Ur Rehman ur Raheem

Mr. Speaker,

1.    I start my submissions with the name of Allah Almighty, the most gracious, the most merciful. It is a matter of great honour and pleasure for me to present the second Annual Budget of the Pakistan Tehreek-e-Insaf’s Government. In August 2018, a new era started under the charismatic leadership of Prime Minister Imran Khan. We started an arduous journey; a path for recovery, stabilization and growth to be achieved in the medium term.  Our economic policies are aimed at fulfilling our promise, our commitment with the people of Pakistan for building a “Naya Pakistan”. Each year, we are coming closer to realizing this dream.

2.    Mr. Speaker, our guiding principles in the past two years have been to weed out corruption, to bring about greater transparency and accountability in government institutions and to uphold merit in our decision making at all levels. Our prime objective is to revive our economy and steer Pakistan onto the path of becoming of a stronger economy, thus achieving the ideals as envisioned by our founding fathers. We have a great trust in the abilities of our people and we need their cooperation in achieving the desired goals.

3.    Tehreek-e-Insaaf is standing on the principle of providing social justice, improving the conditions of the vulnerable and underprivileged segments of our society, and espousing the cause of the poor and downtrodden, which has been our vision and guiding principle.

What we inherited

Mr. Speaker,

4.    Before I present budget for the next financial year, I will like to apprise this august house that when our government came into power in 2018, we inherited an economic crisis.  The honourable members would recall that at that time;

a)    Total debt and liabilities had got doubled in last five years and reached the highest level of Rs 31,000 billion, which increased our debt servicing cost to an unsustainable limit.

b)    Current account deficit had increased to a historic high of $20 billion

c)    Trade deficit had reached at $ 32 billion, with no growth in exports in last five years.

d)    Pak Rupee was artificially over-valued which decreased our exports and increased the imports.

e)    Foreign exchange reserves with the State Bank of Pakistan had declined from $18 billion to below $ 10 billion, bringing the country to the brink of default.

f)     Fiscal deficit was at highest level of Rs 2,300 billion

g)    Due to poor policies and mismanagement, power sector circular debt had bulged to Rs 1200 billion despite payment of Rs 485 billion by the previous government.

h)    There was no restructuring of Public Sector Enterprises therefore their performance was at the lowest ebb having caused a cumulative loss of Rs 1300 billion.

i)     Interest rate was kept low to borrow more money from State Bank which badly damaged the banking sector.

j)     No measures to combat money laundering and terror financing hence the country was pushed into Grey List Mr Speaker,

5.    We started the current FY 2019-20 to achieve the goals approved by the Parliament.

We took appropriate decisions and measures and successfully managed to stabilize the economy. Resultantly, the major economic indicators have much improved during first nine months (July-March) of FY 2019-20 as compared to the corresponding period of 2018-19 as under;

a)    In the first 9 months of current financial, Current Account deficit has decreased by 73% from $ 10 billion to $ 3 billion

b)    Trade deficit has decreased by 31% from $ 21 billion to $ 15 billion

c)    Fiscal deficit reduced from 5% to 3.8%

d)    Primary surplus of 0.4% achieved first time in last 10 years

e)    FBR revenue increased by 17% and we were on track to achieve the target of Rs 4,800 billion

f)     Non tax revenue increased by 134 % and against the annual target of Rs 1,161 billion, we will achieve Rs 1,600 billion

g)    Higher foreign debts of $ 6 billion repaid against $ 4 billion, however forex reserves remained stable.

h)    It is important to note that we have made interest payment of Rs 5,000 billion in the last two years on heavy loans of the past.

i)     We have given historic package of Rs 152 billion to the merged district of Khyber Pakhtunkhawa.

j)     This government has created around 1 million overseas jobs for Pakistanis which helped in increasing remittances. During first 9 months of this financial year, remittances increased from $ 16 billion to $ 17 billion.

k)    Foreign direct investment almost doubled from $ 0.9 billion to $ 2.15 billion

l)     Debt management has been improved by shifting 74% of our domestic debt portfolio to long term which resulted in reduction of domestic borrowing rates from 14% to 10%

m)  Due to the reforms introduced by our government, Extended Fund Facility of $ 6 billion approved by IMF

n)    In December 2019, Bloomberg has ranked Pakistan Stock Exchange as one of the top performing markets of the world

o)    Moody’s ratings upgraded from B3-Negative to B3-Positive.