Is Pakistan’s budget a well-rounded one?
CPEC gets prime focus in finance bill for 2018-19 ANALYSIS
Pakistan’s new national budget for FY19 is just unfolding, but it has already won many supporters, as well as some critics. Prime Minister Shahid Khan Abbassi decided to unveil the full-year budget for financial year 2018-19 that starts on July 1 to ensure continuity of economic, development and financial policies, especially in the context of the country’s foreign assistance, loans and foreign exchange reserves.
In this context he attaches great importance to the rupee-dollar situation, which is constantly being watched by nearly 9 million overseas Pakistanis with more than $20 billion remittances they send home annually.
Abbasi went ahead with unveiling his 12-month budget at a time when his government has only a month to stay in power before the July elections. This is in spite of the fact that his critics, including former test cricketer and opposition leader Imran Khan, have been of the view that since the electoral mandate of the present government ends in May before the start of 2018-19, Abassi cannot formulate the budget.
“Mr Abbassi is giving some budgetary concessions to the people to win their votes for his Pakistan Muslim League,” Khan, who leads Tehrik-e-Insaf party, said.
The majority of the business, industry and financial sectors is quite satisfied with the budget. They reflect the government’s hope of a significant uptick in the economy, they look at it as new Finance Minister Miftah Ismail claims.
While talking to Khaleej Times, the finance minister said: “We have done nothing wrong. We did not make the budget to win votes. We wish the government, whether it is the present one, or any other which the forthcoming elections will bring into power, to ensure the continuity of the present uptick in the economy, and to ensure its strength.”
“Look at this: the budget raises salaries and pensions of civil and military employees by 10 per cent,” he added.
The most important part of the budget is related to the ongoing China Pakistan Economic Corridor (CPEC). The government has allocated Rs198 billion in the development budget for various projects under the CPEC in the next fiscal year 2018-19, including Rs25 billion for the construction of the western route from Burhan-Hakla on Motorway-1 to Dera Ismail Khan.
According to the Public Sector Development Programme (PSDP), for 2018-19, new projects costing Rs835 billion will be added in the CPEC and its supporting projects. Thirty-one projects for the development of Gwadar are part of the PSDP for 2018-19 with an estimated cost of Rs137 billion.
For modernising Mailine-1, phase one of Pakistan Railways and the establishment of a dry port at Havelian, the government has allocated just Rs5 billion against a total estimated cost of Rs380.8 billion. The funding has been allocated mostly for ongoing projects in the PSDP for 2018-19.
The government has allocated funding for projects outside the CPEC as well, which include Rs45 billion for Multan-Lahore (M3 section) of the Karachi-Lahore Motorway. Out of a total cost of Rs110.208 billion for the completion of the western route from Burhan to DI Khan, the government projected to utilise Rs52.392 billion up to June 30, 2018. Of the remaining throw-forward standing at Rs57.815 billion, the government allocated Rs25 billion in the budget 2018-19, so this project required at least another year and would be completed by 2019-20.
For the construction of Karakorum Highway phase two, Havelian-Thakot as part of the CPEC (revised), the government has allocated Rs25 billion. Out of tje Rs136.659 billion cost of this project, the expenditure projected to be incurred on it was Rs63.881 billion. Against a total throw-forward of Rs72.778 billion for completion of this project, the government allocated Rs25 billion.
For the construction of KKH between the Thakot-Raikot section including the Tatapani Bypass under the CPEC, the government
We did not make the budget to win votes. We wish the government, whether it is the present one, or any other... to ensure the continuity of the present uptick in the economy, and to ensure its strength Miftah Ismail, Finance Minister of Pakistan
made it part of new projects of the National Highway Authority and allocated Rs1 billion against a total estimated cost of Rs8.150 billion.
For 5 GD water desalination plants in Gwadar, the government has allocated Rs150 million in the budget against a total estimated cost of Rs3.042 billion. For the upgrade of a 50-bed hospital to 300 beds in Gwadar, the government allocated Rs100 million against a total funding requirement of Rs9.9 billion.
An allocation of Rs6.035 billion has been made for the construction of the Eastbay Expressway under the CPEC, Rs194 million has been allocated for a feasibility study on the construction of a breakwater, Rs625.583 million for the Pak-China Vocational Institute in Gwadar and Rs100 million for chapel dredging of berthing area for additional an terminal against estimated total cost of Rs2.8 billion.