‘No new taxes’ Dar unveils Rs14.5tr budget for FY2023-24 in NA

Finance Minister Ishaq Dar on Friday unveiled a Rs14.5 trillion bloated budget, with the highest-ever deficit of Rs7.6 trillion in a bid to appease nearly a dozen sectors ahead of the general elections that could antagonise the International Monetary Fund (IMF).

The budget for fiscal year 2023-24 appears to be promoting an informal economy at the expense of the formal sectors and places heavy reliance on bilateral creditors – Saudi Arabia, China and the United Arab Emirates – to fund the expenses.

The measures like an amnesty scheme for legalising $100,000 or Rs29 million in black money and a 0.6% tax on cash withdrawals would encourage the informal economy and increase currency in circulation.

The government has allocated a total current expenditure of Rs13,320 billion for FY24, which represents a 53% increase compared to the budgeted figure of the previous year.

For the same fiscal year, the budget for defence expenditure is set at Rs1,804 billion, reflecting a 15.4% increase compared to the previous year’s budget. This amount constitutes 1.7% of the country’s GDP.

In FY24, interest payments or debt servicing have experienced a significant rise of 85% from the previous year, reaching Rs7,303 billion. This amount accounts for 55% of the total current expenditure, making it the government’s largest expenditure category.

Apart from that the major expenditures in the budget are Pensions (Rs761 billion), Civil Government (Rs 714 billion). Subsidies worth Rs 1,074 billion have also been announced.

In his budget speech Finance minister Ishaq Dar said that, “Any independent analyst will tell you that this budget is not an election budget, but is rather made by keeping in view the elements of the real economy,”.

“The current economic crisis is a result of the mismanagement of the economy by the PTI government in its tenure,” he said.

He also said that no new taxes have been imposed in this budget.