Assignment M. Shahid Amin

ASSIGNMENT
Muhammad Shahid Amin

Public Finance and Devolution
M.Phil. Public Policy
Federal Budget for Fiscal Year 2020-21
Economic Relief Packages
Covid-19 emerged as a major threat to the world economic system. It has also adverse impacts
on the economy of Pakistan. Government announced a package of Rs. 1200 Billion for the relief
of farmers and daily wages workers.
Main features of the Budget 2020-21
a) Striking a balance between corona expenditure and fiscal deficit.

b) Keeping primary balance at sustainable level.
c) Protection of social spending under the Ehsaas Program to support the vulnerable
segments of the society.
d) Resource mobilization without unnecessary changes in tax structure.
e) Successful continuation of IMF program.
f) Carrying forward of Stimulus Package
g) Keeping development budget at adequate level to stimulate economic growth.
h) Defence and internal security of the country has been given due importance.
i) Housing initiatives including Naya Pakistan Housing project have been funded
j) Funding for special areas i.e., erstwhile FATA, Azad Jammu and Kashmir, Gilgit
Baltistan has also been ensured for their development
k) The special initiatives led by the Prime Minister like Kamyab jawan, Sehatcard, Billion
tree Tsunami etc have also been protected.
l) Austerity and rationalization of expenditures will be ensured.
m) Subsidy regime will be rationalized to provide targeted subsidy to the deserving segments
of the society.
n) NFC award will be revisited. Moreover, the provinces will be asked to fulfill its funding
commitment made at the time of merger of erstwhile FATA.
Comments
This budget can be called as relief budget in view of the current crisis of Covid-19 for the poor
and daily wages workers. Government launched “Ehsaas” program of cash transfers to the
vulnerable and poorest community of the society. Rs 152 billion are also allocated to newly
merged districts (NMDs) of Khyber Pakhtunkhawa for their development. There is 5% decline in
development budget this year compared to the previous year’s allocation. Funds for the new
initiatives of the Governments such as Naya Pakistan Housing Scheme have been allocated.
Government committed to complete the IMF program.
Budget Estimates 2020-21
In Billion Rs.
Budget 2019-20 Revised 2019-20 Budget 2020-21

FBR Revenue 5555 3908 4963
Other Revenue 1162 1596 1610
Gross Revenue 6717 5504 6573
Transfer to Provinces -3255 -2402 -2874
Net Revenue of Federal 3462 3102 3700
Government
Expenditure 7022 6830 7137
Federal Budget Deficit -3560 -3728 -3437
Provincial Surplus 423 -81 242
Overall Budget Deficit -3137 -3809 -3195
% GDP -7.1% -9.1% -7.0%
Primary Budget Deficit 669 1099 249
Memo 44003 41727 45567
Comments
The FBR Revenue target set by the Government 4963 billion rupees for the fiscal year 2020-21
which seems to be an unrealistic approach. The revised FBR Revenue in the previous year was
3908 billion rupees. The Government has not invested in the sectors to boost the economy
through which the revenue can be increased and now in the crisis period it will be very difficult
for the government to achieve the set targets.
Function wise Expenditure for Fiscal Year 2020-2021
S. N. Classification Expenditure in Million Expenditure in

Rs. Percentage
1 General Public Service 4428643 70%
2 Defence Affairs & Services 1289134 18%
3 Public Order & Safety Affairs 169927 2.8%
4 Economic Affairs 71751 2%
5 Environmental Protection 431 0.3%
6 Housing &Community Amenities 35680 1%
7 Health Affairs & Services 25494 1%
8 Recreation, Culture & Religion 9822 0.5%
9 Education Affairs & Services 83363 2%
10 Social Protection 230907 3.4%
Total 6345150
Comments
Pakistan ranks no 5 in the world by population. The major portions of the Budget are general
public service and defence. A major portion of the Budget is also reserves for the interest
payments. The government increased the amount in the social sector and initiated new programs
for the poor people of the society.
Critical Analysis
 Government has not taken any steps to control the inflation in the country. The
government must protect the lower middle income group of the community.
 The government is reducing the power sector subsidy from 200 billion Rs. to 124 billion
Rs. which will destroy a huge segment of the society.
 The government has not increased the salary and pension of the government employees
in the current fiscal year which will disturb the employees of low income.
 The agriculture sector is not focused in the budget the agriculture sector is also facing the
challenges of flood and a wide variety of pests and insects also attacked the crops in
Pakistan.
 The government has not taken any step to create new vacancies especially for the
youngsters and females and on the other hand unemployment raised day by day in the
country due to the crisis in the private sectors.
 The government has not pay any attention in the Budget to boost the economy and to
increase the revenue of the country.
 Development Budget is decreased by 5% in the current fiscal year as compared to the
previous fiscal year which also intends to disturb the employment opportunities and
economy of the country.

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ASSIGNMENT

Muhammad Shahid Amin

Federal Budget for Fiscal Year 2020-21

Economic Relief Packages

Main features of the Budget 2020-21

a) Striking a balance between corona expenditure and fiscal deficit.

Budget Estimates 2020-21

Budget 2019-20 Revised 2019-20 Budget 2020-21

Function wise Expenditure for Fiscal Year 2020-2021

S. N. Classification Expenditure in Million Expenditure in

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