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Bedar Budget

(RS.20 Trillion )

2016-17


Presented by

Bedar Pakistan


BEDAR - Benevolent Economic Development And Research

 
Pakistan Budget 2016-17

Pakistan has projected an estimated budget of Rs.3621 billion for the current fiscal year 2016-17. Unfortunately by the conclusion of the fiscal year actual expenses will exceed Rupees 4394 Billion. In fact, generation and collection of revenue inclusive of Tax Revenue (including income tax, sales tax, duties, surcharge etc.) and Non-Tax Revenue never surpasses the mark of Rupees 3000 Billion. The annual average budget deficit for last five years was not less than Rs. 500 to 700 billion. The question arises then how does the government cover this shortfall.
Government has the following budgetary and non-budgetary supports available to balance this deficit:

i. Prints money without having adequate reserves resulting in inflation and devaluation of currency.

ii. Prints prize bonds, treasury bonds and saving certificates and sale these instruments through banks and other government agencies. These carry high interest/yield rates and increase public borrowings and increase in internal debts.

iii. Buys foreign currency (USD) from open market to cover the shortfall in foreign exchange of approximately 2 to 3 billion Dollars every year.

iv. Borrows fresh loans from IFI's like IMF, ADB, World Bank etc. It is claimed that interest rates are very competitive nevertheless these loans and interest thereon has to be paid, consequently external debt increases every year.

v. Borrows from banking system and hardly pays back. These debts increase every year, as government is unable to even pay interest on the borrowings and reschedule these loans.

vi. Government controls the prices of vital commodities like petrol, electricity etc. and services. To reduce the budget deficit, increases price of such commodities, which adversely affect the cost of goods produced or imported in Pakistan. Such devastating rise in prices has worse impact on economic activities and increases input cost manifold. Resulting into higher cost of merchandize for domestic consumption and international market as well. This also widens the trade gap between imports and exports, which is currently estimated at 12 to 15 billion Dollars. Now we are presenting Bedar Pakistan budget total amount of 20 trillion Rupees.
This will eliminate poverty, cost of living will reduced to less than 50%, And special pay award to all the government servants. Minimum wages will be at least 25,000 rupees per month with special attention given to immediate relief of power and water shortage. It will give a kick start of dying industry of Pakistan and massive employment opportunities in the range of 5-6 million peoples will employed within the shortest period of one month

 
Current Budget VS Bedar Budget 2016-17
Pakistan’s current Budget 2016-17 Bedar Budget 2016-17

Rs.4394 billion

Revenues Rs.3621 billion
Expenditures Rs.4394 billion
Deficit Rs.773 billion

Rs. 20,000 billion

Revenues Rs.20,000 to unknown amount in trillions
Expenditures Rs.20,000 billion
Massive budget surplus

 
Macroeconomic Management

Overall economic conditions have slightly improved, yet progress has been lopsided and continued to be frail in many aspects. The main area requiring consideration is fiscal management, particularly the structure and quality of public spending – to create more fiscal space for priority expenditures while ensuring fiscal sustainability. Better public expenditure management would allow allocations to growth-promoting and poverty-reducing spending to rise in a way which is coherent with sustainable fiscal positions.

A stable policy framework is a vital determinant of facilitating macroeconomic conditions. The higher growth is the result of profitable investment opportunities, whose probability depends on macroeconomic reliability and on microeconomic conditions and the role of institutions.

Improved Conditions for Private Sector Participation

Private investment can play a significant role in supporting sustained economic growth. A vigorous private sector drives economic growth, but government plays a vital role in creating a climate where entrepreneurship can flourish. An improved business environment not only delivers higher and more productive private investment, it also expands the private sector by establishing a level playing field encouraging small businesses (often the most dynamic business segment) including a shift from the informal to formal economy. A better business environment is also essential to attract more foreign investment.

Debt Relief

With massive remittance of foreign exchange as estimated at 400 billion euro in the very first month of duty free option there will be no debt internal or external rather there will be massive surplus both in Rs and in foreign exchange. All IMF debt will be paid in matter of days and will say good bye to IMF Inshallah

Physical Infrastructure

Private sector productivity and investment rates are severely affected by inadequate level and quality of infrastructure including electricity, transportation and communications. Infrastructure gap reflects that sizable investment is required to bridge this gap which increased due to lesser public investment in infrastructure. Under present circumstances it is likely that such projects initiated by private sector will fill significant portion.

In order to improve the physical infra structure following projects are proposed:

1. In order to cover the immediate shortage of electricity especially in urban areas of country, 100 gas turbines, each capable of producing 100 Mega Watts’s electricity shall be installed in 10 major cities to lessen the power consumption pressure. Adequate funds are allocated for this project in the budget.

2. Construction of 5 dams in next 5 years to cater the consumption requirement of electricity for next 50 years.

3. Nuclear power stations shall be constructed.

4. Conversion of present 8,163 km long single railway track to dual track and laying another dual track of 1,837 km long.

5. Conversion of 152,033 km long paved highways into expressways of international standards.

6. Conversion of 105,650 km long unpaved highways to paved highways.

7. Construction of 150,000 km long paved highways to connect remote areas.

 

Basic Amenities

Every child has a right to attend primary school, a place for medicine and basic health care. Every citizen has the right to have clean drinking water, sanitation. Unfortunately these services are either unavailable or available at poor quality or very high cost. Human development is influenced by various factors like traits, family backgrounds, social features and nation characteristics. The policies chosen by government in respect of education, health, water and sanitation services influence human development.

In order to improve the physical infra structure following projects are proposed:

1. A sea water desalination plant with a capacity of producing clean drinkable water of 50 million gallons per day shall be constructed in Karachi to make sea water desalinated. This shall provide clean and pollution free drinking water to the residents of Karachi city. The cost of this first mega project of its kind in Pakistan is estimated at Rs. 17 billion and shall be completed in 18 months.

2. 200 desalination plants packed in containers shall be installed along with the costal line of Pakistan to provide potable and drinking water immediately to the inhabitants of these regions. The cost of this project is estimated at Rs. 2.400 billion and this shall be completed in 3 months.

3. Waste water treatment plants shall be constructed through out the country to make industrial and municipal sewage water fit for cultivation. Initially these plants shall be constructed in 10 major cities.

4. For every 5,000 persons one hospital shall be constructed through out the country to provide basic health facilities. These 30,000 hospitals shall be equipped with all basic and advanced medical equipments and instruments.

5. In order to increase the literacy rate 100,000 primary schools shall be opened. Present middle schools shall be upgraded to high schools.

 

Challenges on the horizon

While reassured in the efficacy of economic strategy, the government is not complacent by progress achieved and formidable challenges still remain on the horizon. These challenges include the following:

(1) The need to push the growth rate before we can realistically hope to have a meaningful reduction in poverty. For this purpose, significant increase in investment is required, especially in the private sector.

(2) The need to improve human development indicators, which will call for significant increase in social spending.

(3) Public sector enterprises continue to bleed the budget and limit the fiscal space needed for social sector spending. An accelerated restructuring to reduce their losses is essential to contain this menace.

(4) Significant evidence is emerging that indicates that our growth potential is being seriously undermined by lack of adequate infrastructure of roads, water, power, gas and telecommunications. The need for major increase in development spending aimed at rehabilitating and expanding the economic and social infrastructure is extremely pressing.

(5) Lack of desired capacity in the system to fully absorb available investment resources. Implementation and governance bottlenecks, thus, need to be removed with concerted efforts.

(6) Law and order and image are clearly interrelated challenges. A lot to tackle these issues is required.

Agriculture Package
The significance of the agriculture sector in our economy is undeniable. Apart from major contribution to GDP, the sector provides livelihood to nearly 70% of population. More importantly, it houses the largest number of poor people in the country. For all these reasons, development of this sector is central to the well being of our country.

Initiatives are required to be taken in the water sector, which is essentially related to the development of agriculture. In addition, plans shall be taken for the following initiatives for the agriculture sector:

1. Through elimination of taxes and adjustment in input cost the prices of fertilizers, urea, seeds, and pesticides shall be reduced by 50 %.

2. With a view to easing the emerging shortages in the market for tractors and other agricultural machinery and equipment, the import policy shall be revised to allow imports of all equipment, which are not manufactured locally, with no duty. There will be no GST or withholding tax on such imports. This shall be subject to the options available under MBC System. This will not hurt local industry.

3. To ensure cheap availability of credit to agriculture sector, the financial institutions shall provide loans on profit and loss sharing. The profit and loss sharing ratio shall be determined from case to case basis and shall be applicable for all types of new loans and financing of tractors and tube wells etc.

4. The agricultural bank shall be restructured with a view to providing better services to farmers.

5. The package for corporate farming shall be formulated and shall be implemented to gain the benefits of large scale.

6. Private sector banks shall be encouraged to lend to the agriculture sector.

7. Special reservoirs shall be developed on each river to store the flood water in case of floods.

8. New canals shall be made from the flood reservoirs and lakes of the proposed 5 dams to provide water resources to the areas which depend on rainfall.

This package will go a long way to enhance farm productivity and incomes of farmers. Since the majority of low income groups are living in rural areas, improved agriculture performance will impact positively on the economic lives of such people.

Package for Industry
The manufacturing sector has enormous scope for the growth. The sector has not responded to the incentives that were offered by the current government, whereby under Mutual Benefit Coupon System the duties on all items of raw materials shall be eliminated subject to the conditions laid down under the MBC System. The MBC System shall abolish all duties of capital goods, raw materials and afford due protection to final products.

Availability of credit on profit and loss sharing basis shall be offered to the private sector. The competitive sharing ratio is the key to the growth of industrial sector. The BEDAR Government shall maintain the fiscal stance to keep the cost of capital lower and ensure increased availability of credit to the private sector. Some of the proposed measures that BEDAR government shall take to facilitate the industrial sector are as follows:

1. Removal of intervention of different departments and agencies and liberalizing the working of industrial sector. The visits by any department/agency shall be pre-announced with appropriate notice.

2. Improve the enabling climate for private sector by removing regulatory and institutional constraints.

3. Significant relief shall be provided to industry by removal of all types of taxes and levies, which would be helpful in reducing the cost of production and enable our industries to provided cheaper products to consumers.

4. To meet the challenges of new WTO regime, liberal import of machinery, shall be allowed via duty free option. These measures will significantly improve the global competitiveness of our industry by reducing the cost of doing business in Pakistan.

5. To assist the industries to meet the international environmental standards, effluent treatment plants shall be established in all the major industrial estates for which funding support shall be made out MBCS resources.

6. New textile, sports goods and medical instruments cities shall be established that would provide a modern industrial estate with all the utilities and export processing zone facilities.

7. Heavy engineering institutions shall be developed to manufacture modern and hi-tech machinery which shall be helpful in improving quality of finished products.

8. Food processing plants shall be encouraged to be established in areas located nearby to fields. Loans shall be provided on softer terms to incorporate plants so that foreign exchange can be earned by exporting processed food.

9. Incentives shall be offered to encourage the export of sea food.

10. Water treatment plants shall be provided to industrial sector on softer terms and conditions to avoid water pollution.

In this budget we have proposed a number of measures both to reduce the burden of taxes on the agriculture and industrial sectors as well as to provide relief to the common man. A very large number of taxes have been either abolished or reduced to provide cheaper machinery as well as raw materials to both agriculture and industry. The development budget has been raised significantly which will help to accelerate the growth process and create more than 5 million new jobs for our people. We are maintaining fiscal discipline by continuously reducing non-development expenditure. The budget will herald a new era of investment and growth in the country.

Further incentives shall be offered to stimulate growth of private investment in SME, housing and agriculture sectors all of which have the potential to create new jobs.

Import Policy
In order to increase private sector participation in the economic development and to gain their confidence it is suggested that government shall cease its involvement in import of basic necessities like wheat, sugar, petroleum products etc. and shall allow private sector to import any thing other than weapons, ammunition, narcotics, liquor or any other item import of which is restricted by the government.

The government shall intervene if private entities make a cartel or pool to drive the market prices and shall make immediate arrangements to flood the domestic market with such things by way of imports.

Budget Estimates
The budget estimates of BEDAR under Mutual Benefit Coupon System together with budgetary performance for the last year are as follows:

In the budget 2016-17, a budget deficit of 4 % of GDP was projected. We are pleased to mention and are confident that projected performance on this important benchmark of fiscal management shall be positive for the first time in the history of our country. In view of the high growth target for next year, which calls for a much higher development spending, and the fact that a high degree of budgetary discipline has been already been achieved, it is proposed to slightly relax the fiscal constraint.

Gross expenditure under Bedar Pakistan Budget for the year is budgeted at Rs. 20,000.00 billion. Of this, Rs. 5,657.720 billion are provided for development expenditure, which represents a significant increase in development expenditure for the current year. It will be seen that while containing current expenditure, we have substantially increased development spending.

We are conscious of the needs of country’s defence which cannot be comprised for want of resources though such resources are utilized with utmost responsibility and economy. For the year, defence expenditure is budgeted at Rs.3, 000 billion to cater the requirements of the Pakistan Forces and to conduct research and development for ultra hi tech technology.

On the revenue side, during the year, total receipts are estimated at Rs. 20,000 billion. Pakistan Monetary Fund (PMF) performance is estimated at Rs 11000 billion. Other revenues are estimated at Rs.9000 billion.

These above estimates indicate that while maintaining fiscal discipline this budget has provided for investment and growth. It will thus serve to consolidate the economic gains already achieved and further the process of accelerated economic development. It will create jobs, provide for improved health, education and population welfare services and stimulate growth investment in the country.

Relief measures
The Government is cognizant of the fact that some segments of the society are in need of special relief. Accordingly, a number of relief measures have been adopted in this budget:

Pay Award
The Pay and Pension Committee had given its award some time ago. It is the time to give relief to the employees and pensioners of federal and provincial governments. Accordingly, the salaries and pensions of federal/provincial government employees have proposed as follows:

1. Armed forces are responsible for the defence of our homeland. Acknowledging their services the following pay structure of armed forces personals is proposed along with allowances:

 
Sipahi
Lance Naik
Naik
Havaldar
Naib Subedar
Subedar
Subedar Major
Lieutenant
Captain
Major
Lt. Colonel
Colonel
Brigadier
Major General
Lt. General
General
Rs. 45,000
Rs. 50,000
Rs. 55,000
Rs.60,000
Rs. 65,000
Rs. 70,000
Rs. 75,000
Rs. 85,000
Rs. 100,000
Rs. 150,000
Rs. 200,000
Rs. 250,000
Rs. 300,000
Rs400, 000
Rs.500,000
Rs. 600,000
An increase of Rs. 10,000/- p.a. in salary is also proposed.

AND NO TAX FOR EVER (A BAD DREAM OF THE PAST)
2. Police is responsible for good law and order situation in country. In order to facilitate police the following pay structure is proposed:
Constable
Head Constable
Assistant Sub Inspector
Sub Inspector
Inspector
DSP/ASP
SP
SSP
DIG/AIG
IG
Rs. 45,000
Rs. 50,000
Rs.85,000
Rs. 150,000
Rs.200,000
Rs. 300,000
Rs. 350,000
Rs. 450,000
Rs. 500,000
Rs. 600,000
An increase of Rs. 10,000/- p.a. in salary is also proposed.
 
3. In order to provide justice the system of judiciary shall be restructured. Lower courts shall be bound to decide each case within 3 days in order to provide justice without any delay. This shall also eliminate the culture of adjournments/dates and the rightful shall have their rights in time. The courts shall be equipped with close circuit cameras and daily proceedings carried out by the court shall be recorded. In case of appeals before higher courts these tapes shall be provided to the higher courts for basic evaluation of cases.

Each district shall have their own high courts and supreme courts which shall be independent. Appeals against decisions of high courts shall be transferred to supreme courts of different districts in order to avoid any sympathetic or favorable action.

The salaries of judges shall be as follows:

Judges of Lower Courts
Judges of High Courts
Judges of Supreme Courts
Starting from Rs. 500,000
Starting from Rs. 750,000
Starting from Rs. 1,000,000
Besides salaries the judges shall also be entitled for an incentive for each case, if decided in stipulated time frame, provide that the higher courts retain the same decision in case of appeals. The incentives proposed are as follows:
 
Judges of Lower Courts
Judges of High Courts
Judges of Supreme Courts
Rs. 10,000
Rs. 15,000
Rs. 20,000
 
4. Salaries of other employees of federal and provincial governments are proposed as follows along with allowances:
 
Peon/Naib Qasid
Clerical Staff
Grade 16
Grade 17
Grade 18
Grade 19
Grade 20
Grade 21
Grade 22
Rs. 40,000
Starting from Rs. 60,000
Starting from Rs. 150,000
Starting form Rs. 200,000
Starting from Rs. 225,000
Starting form Rs. 350,000
Starting from Rs. 300,000
Starting form Rs. 350,000
Starting form Rs. 400,000
An increase of Rs. 10,000/- p.a. in salary is also proposed.
 
5. Salaries of teachers and professors are proposed as follows:

Teacher Primary School

Teacher Secondary School

Teacher High School

Teacher Higher secondary School

Lecturer

Assistant Professor

Associate Professor

Professor

Ph. D Professor

Starting from Rs. 60,000

Starting from Rs. 80,000

Starting from Rs. 90,000

Starting from Rs. 100,000

Starting from Rs. 150,000

Starting from Rs. 250,000

Starting from Rs. 350,000

Starting from Rs.450,000

Starting from Rs.600,000

An increase of Rs. 10,000/- p.a. in salary is also proposed.
 
Doctor MBBS
With diploma
With post graduation degree
Registrar with post graduation degree
Associate professor
Professor
Starting 100,000
Starting 200,000
Starting 500.000
Starting 600,000
Starting 700,000
Starting 900,000
 
6. In order to provide quality health care facilities in hospitals and to discourage private practice of doctors their salaries has been restructured. It is proposed that the minimum salary of doctors practicing in urban area shall be Rs. 100,000 with an annual increment of Rs. 10,000 p.a. In order to lessen the pressures in hospitals located in urban areas more hospitals shall be constructed in remote areas and salary of doctors practicing in such areas is proposed to start from Rs. 150,000 along with accommodation.

7. Pensioners are the most neglected segment of our society and in order to facilitate them it is proposed that the pensions shall be raised by three times of the present structure.

It is estimated that these radical changes in salaries and pension shall increase the government expenditure under this head by Rs. 1.000 trillion.

 
Housing and Construction
The housing and construction sector remained neglected in past which created in housing backlog. In order to make up this backlog and meet the shortfall rapid housing production is needed.

The major emphasis of the policy is on resource mobilization, land availability, incentives to home ownership, incentives to developers and constructors and promotion of research and development activities to make construction cost effective. The objective is to create affordability, especially for the middle and low income groups.

According to the World Bank’s recommended occupancy rates of 6 persons per house, the total number of required housing units in the country would be more than 25 million based on the population of 170 million at present. Realizing the slump in the housing market, feeling the need to revive this important sector of economy and narrow the backlog functions of House Building Finance Corporation are rationalized and the corporation shall be restructured having clear goals and objectives.

The sector has enormous potential for poverty reduction and employment generation. The government has taken various steps to improve the environment for investment in this sector. These measures include; the improvement in the availability of housing finance by encouraging commercial banks to extend housing finance legal frame work for the loan recovery of financial institution streamlined, bank’s exposure to housing finance has been enhanced. The maximum loan tenure for housing finance shall be increased from 20 years to 25 years. Banks and DFIs are extending credit facilities for Balancing, Modernization and Replacement (BMR) of machinery used for housing and construction industry. HBFC has introduced bridge financing and bulk financing for housing projects through escrow accounting together with appropriate safeguard. House Building Finance Corporation (HBFC) and other financial institutions have formulated packages of preferential/concessional rates with affordable system of installments for repayment to provide affordable credit to low income groups.

House building loans from Housing Building Finance Corporation (MONEY PROVIDED BY STATE THROUHG BANKS WITH ZERO NINTEREST BUT ON RENTAL BASIS WHICH WILL BE MUCH LESS THAN THE INTEREST RATES 1 % ) are generally utilized by borrowers from low income group. To give relief to this group, it is proposed that all cases shall be settled at original loan amount plus 1% rental for those whose time for repayment has expired. The outstanding frozen amount can be repaid over 36 equal monthly installments through post dated checks. This will alleviate the hardship of borrowers which are mostly widows, retired persons and people from extremely low incomes. It is further proposed that for the remaining outstanding cases, where the repayment time in not expired, borrowers will be allowed to repay the amount in equal installment in remaining period of loan through post-dated checks. For such loans, the rental charge will be reduced to 1% effective This concession will provide relief to another large segment of borrowers of HBFC.

Government – Private Sector Business Relationship
Under MBC System (Mutual Benefit Coupon System) the government shall be having massive cash resources which would be available to banks for funding projects undertaken by private sector under special arrangements.

As mentioned earlier government shall disengage itself from import and supply of basic necessities and other business oriented activities and private sector shall be encouraged to invest in such businesses. Similarly the projects mentioned in the budget shall also be offered to private sector on BOT basis with specific terms and conditions. Adequate funds shall be provided by government through commercial banks to the private sector for completion of projects. The government shall participate in these projects on profit and loss sharing business.

This budget also has the distinction of delivering economic sovereignty to our country as we are saying good-bye to the IMF. Undoubtedly, challenges remain on the horizon, yet we must acknowledge progress without being complacent. There is no exclusive on wisdom. While constructive criticism is always welcome, we must also recognize our strengths without which we will not be able to chart an effective strategy to face challenges.

 
End of Terrorism and Drugs

Islam is being hijacked by the extremist elements in the name of jihad. Everyday there are at least one case of suicide bomber blowing up resulting in killing and injuring many innocent people including men, women, children and old people. Suicide is strictly forbidden in Islam and killing an innocent person is one of the greatest sins in Islam and comes after the disbelief in Allah Sub Ha Na Wa Tallah.
One has to look at the root cause of these various and violent crimes against the humanity. There is only one thing prominent in these cases and that is poverty. This poverty is the exploiting cause and is a big excuse in making these would be suicide bombers believe that not only his family will be given with lot of money but he also becomes a martyred and will go to paradise. These people having a little knowledge of Islamic faith fall into the trap and kill other innocent people. Can you ever imagine a well to do person will become a suicide bomber? The answer is big no. So ultimately Economic Depression drives these people to such acts of violence and a system which can bring prosperity in matter of days is easily available then all these can be solved.

Drugs are in another dreaded evil which is just like cancer and is spreading it roots in every country. But the 90% of its cultivation and production is in poor countries like Afghanistan and the surrounding belt. The farmers are very poor and the only way out is to grow poppy crop which will sell easily with good price. MBC System has a program of corporate farming in which all the available lands will be cultivated under the direct supervision of professional private organizations that will get seed, water, electricity, fertilizer and pesticide price at the cost price or even at less than cost price by the Govt. which will take share of 20% of the crop. This is how every poor farmer will get a healthy reward and hence cultivation of poppy will be completely eradicated.

Poverty Removal
The main aim of this book (Islamic Economic Revolution of the Century) is removing poverty by creating massive employment opportunities with industrial boom. The basis will be achieved with in one year. All poor educated and unemployed persons will get job with in thirty days is the main feature of the book and is created by employing millions of people as bond selling agent and once the industrial boom started everybody will be employed and that will be achieved with in one year.

Spread of True Sprit of Islam
There will be an examination held every month in every village at multiple centers and anybody who scores over 5% marks will be given Rs. 500 and person passing with 100% marks will be entitled to have Rs. 10,000. By introducing this exam the extreme elements which are hijacking Islam will be eliminated by choice and will become good Muslims.

Dr. Niaz Ahmed Khan New Book published in Dec 2016

 
 
 
Bedar Pakistan Budget 2016-17
 
 
 
 
 
     
 
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