Pakistan’s budget for the Fiscal Year 2021 and 2022 will likely be tabled on June 11, Finance Minister Shaukat Tareen said.
“Preparations for the budget are under way and we are planning on bringing out-of-the-box things this year,” he said in a briefing on Sunday.
The minister said that coronavirus has affected the international economy and inflation has risen across the world. “The government’s focus will now be on reducing inflation.”
Tareen revealed that the government will be giving targetted subsidies to the power sector this year and announce more for other products next year.
He highlighted the importance of the two-pronged strategy of building strategic reserves for essential commodities and interest-free loans to farmers. “The objective is to ensure price stability.”
Reserves will help govt dump the produce in the market to keep prices from rising in case of hoarding. Giving credit access to farmers will also help them produce more.
This will eventually drive growth, he said.
Tareen stressed the need to build foreign exchange reserves to ensure sustainable growth. “Higher reserves will help avoid any balance of payment crisis.”
Sustainable growth is growth for every segment of the society.
He added that for both federation and provinces to have fiscal independence, the tax to GDP ratio has to be 18% to 20%. “We need to raise it by 1% every year to get there in 10 years.” Presently, the rate is 11%.