LAHORE: The Punjab government on Thursday unveiled its $5.4 trillion budget, calling it the first tax-free budget of the current government.
Punjab Finance Minister Mujtaba Shuja-ur-Rehman presented the proposed budget and said that no new tax will be levied in the budget for the next financial year.
He said that revenue collection will increase by 50% in other ways and the next annual growth program will be $842 billion.
He said 77 new mega projects will be part of the ADP, with a revenue target of $960 billion for the next financial year.
The Punjab finance minister said in the budget that the minimum wage has been increased from Rs 32,000 to Rs 37,000 and the salary of civil servants will increase by up to 25%.
He said that the Minority Development Fund has been increased by $1 billion for the first time and $6 billion has been spent on the laptop scheme and $5 billion on the Pakistan Kidney and Liver Transplantation Institute fund.
He said the inflation rate has been reduced to 11.8 percent and there has been a significant cut in government spending.
The provincial minister said that revolutionary measures have been taken in the healthcare sector of Punjab and free Wi-Fi facility has been provided in various parts of Punjab.
The Punjab finance minister said solar panels will be provided to electricity consumers using one hundred units and easy loans will be provided to home builders of up to five marlas.
Earlier, the Punjab Cabinet approved the tax-free budget for the next financial year in a meeting chaired by Chief Minister Maryam Nawaz in Lahore today.
In the meeting, the CM said that all efforts will be made to fulfill our promise to the people.
For the first time, Punjab has closed dead schemes and included new schemes worth $530 billion from its development budget. The new budget does not impose new taxes or increase existing tax rates. Revenue will increase by 53 percent through fiscal resources without raising taxes.
The budget is $842 billion for development spending and a budget surplus of $630 billion. The annual development plan will include 77 new mega projects.
The biggest development package in the history of Punjab was also approved. The Cabinet approved a record budget of $842 billion. The previous revenue target was $625 billion, and the current target is $960 billion to be raised from provincial sources.
Punjab approved hike in minimum wage from Rs 32,000 to Rs 37,000. Salary will increase by 20-25 percent, pension by 15 percent.
For the first time, the Minority Development Fund received a record $1 billion. More than $54 billion in interest savings was approved to pay down $375 billion in debt
$6 billion has been allocated for the laptop scheme and $5 billion for the PKLI fund. General defense spending was $130 billion, an increase of $110 billion.
Punjab collected taxes 36 percent more than the target of FBR. An additional $268 billion in grants was approved for the 2023-24 budget. The supplementary budget statement for the financial year 2023-24 was also approved.
The additional allocation is Rs 26 billion for farm equipment, Rs 10 billion for Kisan card, Rs 30 billion for CM green tractor program and Rs 80 billion for CM district SDG programme.
35 billion dollars allocated for the development of Lahore, 5 billion dollars for Murree, 2 billion dollars for Livestock cards, 2 billion dollars for Himmat and Nigehban cards, 26 billion dollars for restructuring education.
Free Solar Systems
The Punjab government has announced its budget for the financial year 2024-25, which includes a major initiative to provide free solar systems to low-power consumers.
The move aims to reduce the burden of high electricity bills and costs for the people of the province.
The initiative, called the Roshan Gharana Programme, is meant to ease the financial burden of electricity costs and high bills for residents of the province, according to budget documents.
The $9.5 billion program will initially provide free solar systems to domestic users of up to 100 electricity units. The Punjab Government will bear all the expenses.
In addition, the budget outlines the Prime Minister’s Agricultural Tubewell Modernization Program, which will receive $9 billion in funding. The program aims to convert 7,000 agricultural tube wells to solar power, providing significant support to agriculture.
The budget for the financial year 2024-25 was presented in the Punjab Assembly today. The finance minister said in his budget speech that the total budget is 5.446 billion dollars and the total revenue is 4.643.4 billion dollars. The budget proposes $842 billion in development spending and 77 new mega projects will be included in the annual development plan.
No New Taxes
Punjab Chief Minister Maryam Nawaz on Thursday told the public that the upcoming budget will not introduce new taxes.
In a high-level meeting, CM Maryam said that while easing the financial burden on the people of Punjab, it is committed to increase the revenue of the province through domestic sources.
Prime Minister Nawaz said, “Our main goal is to expand Punjab’s financial resources without burdening the people. We are looking for innovative ways to increase our revenue beyond our capacity.”
He explained the administration’s performance-based approach, saying the deputy commissioner would be heavily tasked. Continuous performance monitoring and evaluation will ensure that officials are accountable and effective in their roles.
In a major infrastructure step, the Punjab Chief Executive announced the creation of a single unit for water supply and irrigation in Punjab. This is part of a broader initiative to modernize and streamline critical services in the province.
The highlight of the meeting was the ambitious plan to make Punjab a safe city. The Prime Minister announced that a comprehensive camera environment will be implemented in all cities, improving security and surveillance capabilities.
Addressing the issue of agriculture, Nawaz said that the money saved from buying wheat would be used to support the farmers. Special attention will be given to the farmers of South Punjab who will receive livestock assistance. This initiative focuses on the development of agricultural administration and rural support.
Rural health centers are attracting unprecedented attention for the first time. Maryam Nawaz announced that all health centers will be fully renovated.
There is a positive response from the public regarding the provision of medicines in field hospitals and the distribution of free medicines in government hospitals.
Continuing its commitment to housing, it launched the ‘Apna Chhat Apna Ghar’ programme. In this initiative, financial assistance will be provided to people with up to 5 marl of land to help them build houses, develop housing development and ownership.
Maryam expressed her gratitude and loyalty and mentioned the encouragement given by her father Nawaz Sharif. “Nawaz Sharif is very happy with our efforts. He believes that God’s blessings are with us. We are determined to work around the clock to fulfill our promises and development plans,” he said.
He praised the Cabinet and his team for their continuous efforts and assured the people of their commitment to the welfare and development of the province.
The budget also includes provisions to improve rural health and fund housing projects for the next five years.
Maryam Nawaz said that she is committed to fulfill her promises with this development project and Nawaz Sharif is satisfied with the team’s hard work.
Key highlights of the budget include:
Approval of 77 new mega projects in the annual development plan.
A 53% increase in revenue from tax sources without raising taxes.
A record $842 billion was allocated for development spending.
Minimum wage increase from 32,000 to 37,000.
20-25% salary increase and 15% pension increase.
Historic construction of one billion rupees under the Minority Development Fund.
26 billion rupees for farm equipment, 10 billion rupees for Kisan cards and 30 billion rupees for CM’s green tractor programme.
Two billion rupees each for the Mall card and the Himmat and Nighaban cards.
Approval of Rs 26 billion for education restructuring.
Key Features
NFC quota
The minister said that with the National Finance Commission (NFC) award, the Punjab government will get $3.683 billion.
Rs75 billion Interest-free loans for farmers
The Punjab finance minister said that the Punjab government has given 75 billion interest loans to 500,000 farmers.
“7,000 tube wells will be installed in Punjab,” he said.
“The Prime Minister’s Green Tractor Program was launched at $30 Billion. Farmers can easily own tractors in their areas,” he said.
Punjab salaries, pensions update in budget
The Punjab government has provided $603 billion and $491 billion for salaries
Rs857 billion for the local governments.
PPP symbolically boycott budget session
The Pakistan People’s Party (PPP) staged a symbolic boycott of the Punjab Assembly session as only two members attended the session.
PPP leader Haider Gilani said that PPP is not included in the budget preparation board and in this situation it cannot support the government budget.
CM Roshan Gharana Program
The Finance Minister said that $9.5 billion has been allocated for the ‘Prime Minister Roshan Gharana Programme’.
Punjab govt to provide free solar installations
The Punjab government on Thursday announced that domestic consumers will be provided with a free fully solar system that consumes 100 units of electricity.
Garment City to Boost Foreign Exchange
Punjab will set up its first $3 billion garment city to collect foreign exchange
South Punjab budget and Education overall
Khelta Punjab Initiative
A mega project called Khelta Punjab will start at a cost of $7 billion. This initiative will provide basic sports fields and facilities in all constituencies of the province.
Reconstruction of sports facilities
In the next financial year, a major project will be started with a cost of Rs 6.5 billion to improve and improve existing sports facilities in Punjab.
Digital Punjab Vision
Prime Minister Maryam Nawaz’s vision of Digital Punjab is fast becoming a reality. Within three months, the foundation stone of Pakistan’s first Nawaz Sharif IT City was laid in Lahore.
Punjab cabinet approves ‘biggest’ tax-free surplus budget in history
The Punjab provincial cabinet headed by Prime Minister Maryam Nawaz has approved the province’s first tax-free surplus budget.
The $5.446 billion budget includes $842 billion earmarked for development spending and a $630 billion surplus.
Maryam Nawaz said the budget will increase revenue from provincial sources without imposing new taxes on the people.
The revenue target has increased significantly to $960 billion from Rs 625 billion earlier.
Other notable initiatives include creating a single unit for water supply and irrigation, making Punjab a safe city covered by cells, and using savings from the purchase of grain to support farmers, especially in South Punjab.
PSX, CGT status quo peak at 76,208 points
Stocks hit record highs on Thursday as investors cheered the status quo Capital Gains Tax (CGT) in the federal budget for 2024-25, traders said.
The benchmark Pakistan Stock Exchange (PSX) KSE-100 index hit an all-time high of 76,208.16 points, an unprecedented jump of 3,410.73 points or 4.69%.
Adnan Sheikh, assistant vice president of Pak Kuwait Investment Co, told Reuters: “The market is expecting an increase in income tax and investors have significantly reduced their exposure.”
Sheikh said the market could see a record day after the budget and the central bank’s 150 bps policy cut on Monday.
Apart from capital gains, analysts said the budget and other revenue measures were in line with expectations.
The rally attracted wide interest from automobile manufacturers, cement, commercial banks, engineering, oil and gas marketing companies (OMCs) and refineries.
A day after Finance Minister Senator Muhammad Aurangzeb announced Pakistan’s federal budget for 2024-25, the destination market grew by around 40% this year.
The budget targets an average growth of 3.6%, which is seen as a good balance between satisfying the International Monetary Fund (IMF) and addressing the country’s fiscal problems by raising taxes.
The new bailout deal from HPG is set to strengthen the case as Pakistan seeks between $6 billion and $8 billion in loans to avoid default in the region’s slowest economy.
“We believe this budget will be the starting measure for HPG’s new program,” Topline Securities said in a note.
Topline said it expects it to rise from 3.4% now to 6.93% in three years if parliament passes its budget in line with International Monetary Fund measures.
Pakistan’s international sovereign bonds also rallied with long maturities yielding the most.
Bond 2036 added 1.4 cents – its biggest gain in two months – to just over 77 cents on the dollar, according to Tradeweb data.
Defending the decision to increase tax revenue, Finance Minister Muhammad Aurangzeb said that the current tax rate of less than 10% of GDP is not sustainable.
Aurangzeb said in a press conference after presenting the budget in the assembly that the next fiscal year includes efforts to gradually raise the core ratio to 13% during the next three years.
