Pakistan sets meagre 2.1% GDP growth target in fiscal budget, defence spending up by 12%

Pakistan on Friday presented its federal budget of Rs 7.14 trillion for the fiscal year 2020-21 with almost a 12 percent higher defence spending than last year. The defence budget has been raised to about Rs 1.3 trillion, as per reports. The budget was presented by Pakistan Industries Minister Hammad Azhar, in which the government set a meagre 2.1 percent GDP growth target for the next year.

"Our main aim was to revive the economy and stabilize and strengthen the Islamic Republic of Pakistan as we realise the vision and aspirations of our founding fathers," Azhar said while presenting the budget.

Dr Abdul Shaikh, who is the adviser to the Prime Minister on Finance and Revenue, referred to this year's budget as the "corona budget."

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Azhar went on to highlight some of the major achievements of the Pakistan government in the outgoing fiscal year, pointing to a 73 percent decline in the current account deficit, which is now under $3 billion. "There is also a primary surplus which we achieved in the past nine months," he added. 

Azhar announced the budget has been based on the current critical situation due to the COVID-19 pandemic and added that there were no new taxes in the 2020-21 budget. There will be no tax on coronavirus and cancer diagnosis kits and the import taxes on kids' food supplement and diet food have been abolished too.

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Opposition slams the budget

Meanwhile, as Azar was giving his budgetary speech, the opposition raised loud slogans against the Imran Khan government and table-thumping in the background as a mark of opposition, calling it an 'anti-people' budget.

While the PML-N chief and Leader of the Opposition in the National Assembly Shehbaz Sharif termed the budget "anti-people", saying that it would lead to increased inflation and unemployment, PPP Chairperson Bilawal Bhutto Zardari said the PTI had presented a "disappointing, traditional" budget at a time when the country was facing historic challenges.

Among the most controversial moves was to freeze the salaries and pensions of the serving and retired government servants who traditionally were given a raise in the budget.

"This is not a budget but a prescription for destruction," Shehbaz said in a statement. "Whatever signs of economic progress are left in the country, will be ended because of the current government's budget. The PTI government first tried to hide its inefficiency, first behind PML-N and then behind the coronavirus pandemic," he said.

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(With inputs from agencies)