Pakistan’s Economy – Budget Anlysis
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EXECUTIVE SUMMARYPakistan’s economy is facing of challenges including energy shortages is in the sturdy progress towards the economic stability. While comparing the economic growth with the last couple of years it seems good but not up to the mark. Pakistan achieved 4.14% growth which is indicator towards the right direction. Agriculture sector plays role of back bone of Pakistan’s economy and has recorded a growth of 2.1 percent against the growth of 2.9 percent last year. The decline in its growth was due to drop in cotton production and other minor crops due to extreme weather but somehow compensated by the better output of rice, sugarcane, wheat and maize crops.International Money market interaction towards Pakistan is also a positive signal towards the economic stability and growth since last year. The positive response from international investor to Pakistan’s first Sovereign Bond issuance has shown that the international market appreciated the economic direction of the country. This transaction is Pakistan’s largest international sovereign bond which attracted significant investment.Entering into the new heights of technology by introducing 3G and 4G technologies in telecom sector has opened trend of investment in Pakistan. The successful auction of 3G/4G spectrum which has opened the new avenues of socio economic development in the country. The auction for 3G/4G spectrum licenses were carried out in a transparent manner and the new technology is expected to generate 900,000 new job opportunities in the next four years along with other direct and indirect benefits to the economy.The construction of roads, dams bridges and new housing sectors are also good indicators of economic progress and growth and helps in conducting the strong economic activity which benefits the whole economy, the sector has registered a growth of 11.31 percent against the growth of (-) 1.68 percent of last year. This is also highest growth level achieved since 2008-09. The increase in growth is due to rapid execution of work on various projects, increased investment in small scale construction and rapid implementation of performance based development schemes and other projects of federal and provincial governments.Numerous development projects has been started by the current Govt., in this regard NHA has executed 83 development projects costing Rs. 615.2 billion. Government of Pakistan has allocated Rs. 63.04 billion in the Federal PSDP for construction of roads, river bridges, tunnels, flyovers and interchanges.
Power generation, the most influential factor toward economic growth and progress has suffers a lot in last decade and still a problematic symbol. However in current scenarios the GOP is taking bold steps to evolve the shortcoming of power in order to stabilize the economic growth. Its contribution in industrial sector is 9.15 percent and the share in the GDP is 1.9 percent. This sub-sector has registered growth at 3.72 percent as compared to negative growth of 16.33percent during last year, however Government has developed National Power Policy (2013) which provides a roadmap for providing affordable energy in the country through efficient generation, transmission and distribution system.Inflation a hot topic now a days in developing economy like Pakistan, Hike in prices has been absorbed in last two three years which has demolished all economic activity in the country as the cost effectiveness is great problem for existing businesses and new investors as well. Current GOP has taken some effective measures to reduce the inflationary factor to some extent. Overview of inflationary trends during ten months of the current FY (July-April) 2013-14, indicates that inflation moved at slow pace on account of improved supply position of essential items and declining trend in major global commodities prices. Due to this slow trend the inflation rate was recorded at 8.7 percent on average basis during July-April, 2013-14, over an increase of 7.7 percent of corresponding period.Government of Pakistan has tried to step forward for preventive measures and to formulate economic policies to attract foreign investors, making economy documented to ensure mainstreamed in the economically and socially vulnerable sectors of the economy and to steer Pakistan towards real economic development. Efforts are underway to attain goals of sustainable social and economic development, ensuring water, food, energy and environment securities, without over-exploiting forests and ecosystems, to meet the needs of present and future generations.Page 2BUDGET AT A GLANCEÂ (Rs. In Millions)Comparative Analysis with Previous BudgetBudgetEstimates2013-14RevisedEstimates2013-14BudgetEstimates2014-15%ageIncreasei) ResourcesRevenue Receipts (NET)Tax Revenue Receipts2,671,4142,513,9453,129,21017.14%FBR Taxes2,475,0002,275,0002,810,00013.54%Other Taxes196,414238,945319,21062.52%Non-Tax Revenue Receipts748,5821,083,197816,2949.05%Net Capital Receipts487,702635,699484,259-0.71%External Receipts576,419714,112868,61050.69%Public Accounts Receipts246,906169,575270,2589.57%Gross Federal Resources4,731,0235,116,5285,568,90117.71%Less: Provincial share in federalTaxes1,502,2881,413,3351,720,18214.50%Net Federal Resources3,228,7353,703,1933,848,71919.20%Cash balance built up by Provinces23,101183,045289,2891152.28%Credit from banking sector974,988376,271227,906-76.62%TOTAL RESOURCES4,226,8244,262,5094,365,9143.29%(ii) ExpenditureCurrent Expenditure3,437,4663,403,8013,527,4132.62%Development Expenditure789,358858,707838,5006.23%TOTAL EXPENDITURES4,226,8244,262,5094,365,9143.29%