BUDGET 2021-22: Highlights and Commentary
PTI government has presented its third budget. The incumbent Finance Minister was expected to spell out new directions of the government which are pro-growth and reflected with fiscal allocations that are in agreement with the Fund while encouraging the existing and new enterprises. At least from the Budget speech it appears he has been successful. However, a critical appraisal is required to qualify this stance. Government has faced numerous economic challenges, aggravated by the Covid 19 Pandemic but the Government has successfully progressed from recovery and stabilisation to sustainable growth. Provisional GDP growth rate for FY 2021 is estimated to be 3.94 percent against the targeted growth of 2.1 percent. The Current account balance during Jul-Apr, FY 2020-21 had been in surplus of $0.8 bn (0.3 percent of GDP) against a deficit of $4.7 bn (–2.1 percent of GDP) in the corresponding year. This had been possible both by an increased export of 6.5 percent to $21.0 bn and remittances significantly growing by 29.0 percent to $24.2 bn. FBR tax collection grew by 14.4 percent to Rs 3,780 bn during Jul-Apr FY 2020-21 against Rs.3,303 bn last year and is expected to post a healthy Rs. 4,691 collection by the end of FY 2020-21. Government has posted a primary surplus for the first three quarters of FY 2020-21. This has enabled the government to resume the $6bn Extended Fund Facility and completed the second to fifth review under the program with IMF.