EDITORIAL

Budget-IncomeTax-Features

Following are the salient features of the Income Tax measures announced by the government in the Federal Budget for Fiscal year 2011-12
--- For the welfare of individuals with low income earnings, the basic exemption limit is proposed to be enhanced from Rs.300,000/- to Rs.350,000/-. However individual taxpayers whose normal income is between Rs.300,000/- to Rs.350,000/- shall be required to file return of income and statement, for the purposes of documentation. ---In order to encourage enhanced equity financing, and to provide relief to new corporate industrial undertakings established on or after 1st July 2011, with 100% equity financing, a tax credit equal to 100% of tax payable is proposed. The existing companies may also take benefit under this arrangement if investment in BMR is financed through their 100% equity, on or after by 1st July 2011. ---The rate of tax deductible on Cash Withdrawals from Banks is proposed to be reduced to 0.2% from existing 0.3%, for bringing in improvement in the liquidity position of eligible taxpayers. ---In order to harmonize the existing tax credits available to individuals for investment in shares and for premium paid to Insurance Company, the maximum cumulative limit for both the investments is fixed @ 15% of the taxable income, with maximum upper limit for investment upto five hundred thousand. ---Tax relief is proposed to be provided to withdrawals exceeding Rs.500,000/- from a Voluntary Pension Fund. ---For encouraging companies' enlistment on stock exchange, the existing tax credit equal to 5% is proposed to be enhanced to 15%. ---For the national cause of Broadening of Tax Base and utilization of third party databases, NTN and CNIC of eligible taxpayers are proposed to be provided expressly alongwith other particulars, in the withholding tax statements filed by withholding agents. ---For the purpose of identification of eligible taxpayers, the requirement of mandatory filing of return of income by the commercial and Industrial consumers of electricity with annual billing above one million rupees, is proposed. This measure will also help in Broadening of Tax Base in the country. ---In order to discourage the practice of arbitrage by banks for receiving `dividends' from Asset Management Companies, the rate of tax on such return is proposed to be enhanced from 10% to 20%. ---For encouraging investments made by non-residents in Government Securities, the withholding tax on profit on debt deductible @ 10% is proposed to be a final tax. This measure will relieve the non-residents from the statutory requirement of filing of return of income, and will boost national economy. ---The withholding tax on profit on debt deductible @ 10% arising from investment in Government securities by individual is also proposed to be a final tax. This measure will relieve such taxpayers from the statutory requirement of filing of return of income, and will also encourage domestic investments in the Government Securities. ---After imposition of capital gain tax on Modarba certificates and instruments of redeemable capital traded at stock exchange through Finance Act 2010, the 0.01% CVT on such instruments is proposed to be withdrawn in order to encourage their trade.

Budget-PSDP-ERRA ERRA gets Rs. 10,000 mln for fiscal year 2011-12

Earthquake Reconstruction and Rehabilitation Authority (ERRA) got an amount of Rs. 10,000 million for the fiscal year 2011-12 for its ongoing and new schemes.
According to Public Sector Development Program (PSDP) issued here on Friday, among this amount Rs. 2094 million would be given through foreign loan and Rs. 7906 million would be provided by the government.
Last year budget earmarked for the authority was Rs. 16,000 million.

Budget-PSDP-Foreign Ministry Rs 285 mln allocated for Foreign Affairs Ministry in PSDP

The Ministry of Foreign Affairs has secured an allocation of Rs. 285 million in the Public Sector Development Programme (PSDP) 2011-12 for the completion of on-going schemes.
The allocations under the PSDP 2011-12 for on-going schemes include Rs. 145 million for the construction of High Security Block at Ministry of Foreign Affairs and Rs. 140 million for its furnishing.
The above mentioned two projects will be completed at a cost of Rs. 800 million, with Rs. 605 million for the construction and Rs. 195 million for furnishing of the High Security Block at the Ministry of Foreign Affairs.
The expenditures incurred on the construction of Security Block as well as its furnishing till June 2011 were Rs. 459.136 million and Rs. 6.627 million, respectively.

Budget-PSDP-Water Rs. 36136.040 mln proposed for water sector projects

The government has earmarked a sum of Rs. 36136.040 million for 57 ongoing and 13 new schemes for Water Sector under Public Sector Development Programme (PSDP) for the year 2011-12.
According to PSDP 2011-12, out of the total, an amount of Rs. 32866.040 million has been proposed for ongoing projects and Rs. 3270 million for new schemes in the upcoming financial year.
Rs. 6000 million has been allocated for Raising of Mangla Dam including resettlement and Rs. 1000 million each for Satpara, Gomal Zam, Winder, Ghabir, Naulong and Darwat dams, Lower Indus Right Bank irrigation and Drainage Sindh and Balochistan Effluent Disposal into RBOD.
An amount of Rs. 1500 million each have been specified Kachhi Canal (Phase-1) and Rainee Canal (Phase-1) in the fiscal year 2011- 12.
A sum of Rs. 1000 million has been earmarked for new schemes including Nai Gag Dam, Rs.700 million for Hingol Dam and Rs. 500 million for 100 small dams in Balochistan.

Budget-PSDP-Cabinet Cabinet Division gets Rs 2692 mln for completion of 21 schemes

The government has allocated an amount of Rs 2692.126 million under Public Sector Development Program (PSDP) 2011-2012 for Cabinet Division for completion of 21 new and on-going schemes.
Out of total amount, Rs 2322.187 million has been allocated for completion of 14 on-going schemes while Rs 369.939 million has been earmarked for completion of seven new schemes.
According to PSDP released here on Friday, the government has allocated Rs 1000 million for construction of 106 family suits while Rs 300 million has been earmarked for construction of Charah dam.
Similarly, Rs 265.772 million has been allocated for construction of 2nd floor within the current Sheikh Zayed Hospital Building, Lahore.
An amount of Rs 300 million has been earmarked for addition of 3rd and 4th lane Kashmir Highway from Peshawar More to Golra More while Rs 300 million has been allocated for Prime Minister's Special Initiative for Hunarmand Pakistan Programme (NAVTEC).

Budget-PSDP-CADD Rs 677 mln earmarked for Capital Administration and Development Division

The government has allocated an amount of Rs 677 million for the Capital Administration and Development division under the Public Sector Development Programme (PSDP) in the fiscal year 2011-2012.
According to PSDP, under the ongoing schemes, an amount of Rs 106 million has been allocated for establishment of FG Degree College for Men Sehala,Islamabad, Rs 83 million for expansion and upgradation of FG Fatima Jinnah Degree College for Women, Model Town Humuk, Islamabad, Rs 36 million for provision of 119 computer labs in educational institutes in Islamabad, Rs 34 million for introduction of intermediate classes and up-gradation of Islamabad Model College For Boys F-11/3, Rs 30 million computerization of National Braille press at National special education center for visually handicapped children,Islamabad, Rs 20 million for establishment of FG Degree College For Women at Bhara Kahu and remaining amount has been allocated for other ongoing small schemes.
However, Rs 99.7 million has been allocated for new schemes in Capital Administration and Development Division which include Rs 89.7 million for uplifting of 50 Junior Model Schools to be administered as Islamabad Model schools and Rs 10 million for strengthening and upgradation of Islamabad Model College For Boys, I-8/3 Islamabad.

Rs.1454.73m allocated for Defence Production

The government has earmarked Rs.1454.735 million under Public Sector Development Programme (PSDP) for the ongoing schemes of Defence Production Division for the year 2011-12.
According to details, Rs.1089.435 have been allocated for installation of ship lift and transfer system, associated machinery, equipment to provide docking and repair facilities to surface ships, submarines and commercial vessels of upto 4000 tones.
The estimated cost of the scheme is Rs.3000 million out of which Rs.1618 million is expenditure upto June 2011 while Rs.1382 million will be thrown forwarded from 1.7.2011.
Moreover, Rs.365.300 million has been allocated for civil works for up- gradation of Karachi shipyard and Engineering Works Limited.
The estimated cost of the project was Rs.816.300 million out of which Rs.451.000 million is the expenditure upto June 2011 while Rs.365.300 million has been allocated for the fiscal year 2011-12.

Budget-PSDP-Ports Rs.744.343 mln earmarked for Ports & Shipping

The government has allocated Rs.744.343 million for various projects of the Ministry of Ports and Shipping in the Public Sector Development Programme (PSDP) 2011- 12.
The allocated amount will be spent on the three on-going projects of the Ministry.
Some Rs 27 million have been earmarked for Gwadar Port Civic Center, Gwadar, Rs.700 million for construction of Eastbay Expressway to link Gwadar Port with national road link and Rs.17.343 million for the stock assessment survey programme in EEZ of Pakistan through chartering of fisheries research vessel and capacity building of MFD, Karachi (Ports and Shipping).

Govt servant pay increased by 15pc, pension increased by 15-20pc

Government decided to increase upto 15 percent in the salaries of government employees and 15 to 20 per cent raise in pensions, Federal Finance Minister Dr. Abdul Hafeez Sheikh said this during his budget speech in the National Assembly on Friday.
The minister said there is a proposal to increase 25 percent allowances of government servants of Grade 1 to 15.
Proposal is also under consideration to revise the pay scales after merging the ad-hoc relief given till 2009.

Rs495.21b Defence budget approved

Federal government has approved defence budget for the fiscal 2011-12 to the tune of over Rs495.21 billion with increase of Rs53 billion.
As per budget documents presented in the National Assembly (NA) Friday a sum of over Rs206.48 billion had been allocated for expenses related to employees against over Rs176.72 billion in the last year's budget.
A sum of over Rs128.28 billion have been earmarked for practical expenses, over Rs128.28 billion for asset, over Rs42.63 for public works and over Rs1.25 billion for negative recoveries.
On the other hand over Rs3.84 billion have been allocated for defence division under PSDP and due to this allocation completion of 35 new and ongoing schemes would be ensured.
For the construction of new international air port in Gwadar allocation to the tune of over Rs1.10 billion has been made in the funds earmarked for defence sector.

Salient features of National Budget 2011-12

Following are salient features of the national budget for Fiscal Year 2011-12:

Total Outlay
The total outlay of budget 2011-12 Rs.2767 billion. The size is 14.2 per higher than the size of budget estimates of 2010-11.

Resource Availability
The resource availability during 2011-12 has been estimated at Rs. 2463 billion against Rs.2256 billion in the budget estimates of the outgoing fiscal year.

Net Revenue Receipts
Net revenue receipts for 2011-12 have been estimated at Rs.1529 billion indicating an increase of 11 percent over the budget estimates of fiscal year 2010-11.

Provincial Share
The provincial share in federal revenue receipts is estimated at Rs.1203 billion during 2011-12 which is 16.4 per cent higher than the budget estimates for 2010-11.

Capital Receipts
The capital receipts (net) for 2011-12 have been estimated at Rs. 396 billion against the budget estimates of Rs. 325 billion in 2010-11 indicating an increase of 11 per cent.

External Receipts
The external receipts in 2011-12 are estimated at Rs. 414 billion. This shows an increase of 7.1 per cent over the budget estimates for 2010-11.

Overall Expenditure
The overall expenditure during 2011-12 has been estimated at Rs. 2767 billion of which the current expenditure is Rs. 2315 billion and development expenditure at Rs. 452 billion. Current expenditure shows increase of less than one per cent over the revised estimates of 2010-11, while development expenditure will increase by 64.4 per cent in 2011-12 over the revised estimates of 2010-11.

Current Expenditure
The share of current expenditure in total budgetary outlay for 2011-12 is 83.7 per cent as compared to 89 per cent in revised estimates for 2010-11.

Expenditure on General Public Services
The expenditure on General Public Services (inclusive of debt servicing transfer payments and superannuation allowance) is estimated at Rs. 1660 billion which is 71.1 per cent of the current expenditure.

PSDP-Petroleum Rs 149.723 mln allocated to Petroleum Ministry

The Public Sector Development Programme(PSDP) features no new projects for Ministry of Petroleum and Natural Resources for the financial year 2011-12.
The ministry has been allocated only Rs 149.723 million for its seven ongoing projects.
According to the PSDP, the allocations for the ongoing schemes include total of Rs 43.340 million for the construction of Petroleum House, G-5 Islamabad, Rs 12 million for strengthening and capacity building of Mineral Wing, Rs 38.676 million for upgradation and strengthening of Geosciences Advance Research Laboratories, GSP Islamabad, Rs 47.457 million for Accelerated Geological Mapping and Geochemical Exploration of the Outcrop Area of Pakistan, Rs 0.750 million for Review and Updation of National Mineral Policy, Rs 5 million for National Coal Policy and Rs 2.500 million for Tharcoal Gasification District Tharparkar, Sindh.

Rs730b allocated for PSDP for FY 2011-12

Budgetary allocation to the tune of Rs 730 billion has been approved under Public Sector Development Programme (PSDP) for the next fiscal year 2011-12.
Following are the highlights of Public Sector Development Programme (PSDP) 2011-12, released here on Friday.
Total amount of Rs 730 billion has been allocated in PSDP-2011-12 for various ongoing and new schemes.
Out of total PSDP, the federal share is Rs 290 billion, provincial share Rs 430 billion whereas Rs 10 billion would be spent for Reconstruction and Rehabilitation of Earthquake-hit areas.

Following are the main allocations:
--- Rs.36136.0 million for Water and Power Division (Water Sector)
--- Rs.22000.0 million for Pakistan Atomic Energy Commission.
--- Rs.10370.9 million for Finance Division.
--- Rs.15000.0 million for Railways Division.
--- Rs.31974.6 million for Planning and Development Division.
--- Rs.14000.0 million for Higher Education Commission.
--- Rs.2137.8 million for Industries and Proudction division.
--- Rs.5800.0 million for Interior Division.
--- Rs.3845.7 million for Defence Division.
--- Rs.1396.0 million for Housing and Works Division.
--- Rs.2692.1 million for Cabinet Division.
--- Rs.1146.6 million for Science and Technological research Division.
--- Rs.1200.0 million for Law and Justice Division.
--- Rs.1970.0 million for Revenue Division.
--- Rs.149.7 million for Petroleum and Natural Resources Division.
--- Rs.793.1 million for Information Technology and Telecom Division.
--- Rs.1454.7 million for Defence Production Division.
--- Rs.424.6 million for Commerce Division.
--- Rs.172.0 million for Communication Division (other than NHA).
--- Rs.744.3 million for Ports and Shipping Division.
--- Rs.350.0 million for Pakistan Nuclear Regulatory Authority.
--- Rs.285.0 million for ministry of Foreign Affairs.
--- Rs.534.2 million for Narcotics Control division.
--- Rs.33.8 million for Establishment Division.
--- Rs.18047.5 million for Kashmir and Gilgit Baltistan division.
--- Rs.10000.0 million for States and Frointier regions division.
--- Rs.630.1 million for Information and Broadcasting Division.
--- Rs.150.0 million for Textile Industry Division.
--- Rs.252.4 million for Statistics Division.
--- Rs.161.1 million for Economic Affairs Division.
--- Rs.677.4 million for Capital Administration and Development Division.
--- Rs.70.0 million for Inter Provincial Coordiantion Division.
--- Rs.32500.0 million for WAPDA (Power)
--- Rs.39900.3 million for National Highway Authority.

Budget-PSDP-HEC Rs 14000 million allocated for HEC

The government has allocated Rs 14000.000 million for Higher Education Commission (HEC) in Public Sector development Programmes (PSDP) 2011-12.
According to the budgetary document, an amount of Rs 679.895 million has been allocated for the six new schemes of HEC while an amount of Rs 13320.105 has been allocated for 166 ongoing schemes.
Among the new schemes, Rs 300.000 million have been allocated for establishment of a university in Malakand / Swat, Rs. 200.000 million for Indigenous PhD Fellowship for 5000 Scholars (Phase-II), Rs. 60.000 million for establishment of a university at Turbut, Rs 50.000 million for National Defence University and Rs. 49.895 million for establishment of a university at Loralai.
While among the ongoing schemes, Rs. 600.000 million have been allocated for strengthening of University of Engineering and Technology, Lahore, Rs. 600.000 million for PhD Fellowship for 5000 scholars, Rs. 450.000 million for infrastructure development of COMSATS Institute of Information Technology Islamabad Campus, Rs. 345.000 million for establishment of New Campus of Jalozai Khyber Pukhtunkhwa University of Engineering and Technology, UET, Peshawer and Rs. 350.000 million for strengthening of NED University of Engineering and Technology, Karachi.
An amount of Rs. 277.800 million has been allocated for strengthening and development of Mehran University of Engineering and Technology (MUET) Jamshoro, Rs. 270.000 million for establishment of Information Technology and Management Science and Telecommunication Institutes at NUST, Islamabad, Rs 250.000 million for Human Resource Development Initiative MS Leading to PhD Programme of Faculty Development for Engineering Universities (UESTPs), Rs. 200.000 million for Foreign Faculty Hiring Programme and Rs 200.000 million for provision of higher education opportunities for students of Balochistan and FATA.
An amount of Rs. 160.000 million has been allocated for repair/rehabilitation/renovation of buildings of University of Balochistan, Quetta, Rs. 140.704 million for provision of essential facilities at COMSATS Insitute of Information Technology (CIIT), Islamabad, Rs. 1800.000 million for Overseas Scholarships for Studies in General Comprehensive Medicine, Rs. 165.000 million for Overseas Scholarship Scheme for MS/M.Phil/Ph.D and Rs.150.000 million for Post Doctoral Fellowships Programme.
The other ongoing projects include establishment of Karakuram International University, Gilgit with an amount of Rs. 115.045 million, establishment of Medixcal College University of Sargodha with Rs. 125.000 million and Faculty Development and other basic requirements of Quaid-e-Awam University of Engineering and Technology (QUEST) Nawabshah with Rs. 125.000 million.