What are salient features of Budget 2023-24?

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In the upcoming budget for the fiscal year 2023-24, the federal government has presented a projection of 3.5% GDP growth, a significant increase compared to the mere 0.29% growth recorded in the outgoing fiscal year.

The estimated total expenditures for the budget stand at Rs 14.6 trillion, reflecting the government’s plans for various sectors and initiatives. However, this budget poses a challenging task for the coalition government as it must strike a delicate balance between implementing voter-friendly budgetary measures and fulfilling the conditions set by the International Monetary Fund (IMF).

Regarding the IMF program, it seems unlikely that the government will meet the program’s timeline, which has been delayed since November. The budget for FY2023-24 aims to boost business activities in Pakistan during challenging times. It is expected that the government will present a budget aimed at winning votes as elections are anticipated within this calendar year.

Market experts highlight that generating higher revenue will be a key focus, with various tax measures under consideration. The release of the next tranche of funds from the IMF will depend on the government’s firm commitment to meeting fiscal targets.

Key Figures:

GDP Growth: FY20 (-0.90%), FY21 (5.70%), FY22 (6.00%), FY23E (0.29%), FY24B (3.50%)

Agriculture Growth: FY20 (3.90%), FY21 (3.50%), FY22 (4.40%), FY23E (-1.00%), FY24B (3.50%)

Industrial Growth: FY20 (-7.80%), FY21 (10.50%), FY22 (9.80%), FY23E (-2.30%), FY24B (4.30%)

Services Growth: FY20 (-1.20%), FY21 (6.00%), FY22 (6.20%), FY23E (1.80%), FY24B (3.60%)

CPI Inflation (Average): FY20 (10.60%), FY21 (8.90%), FY22 (11.70%), FY23E (29.30%), FY24B (21.00%)

The government faces significant challenges, including a fiscal crisis and external imbalances. To address these challenges, it aims to achieve the following targets:

Total budget outlay for FY2023-24 estimated at Rs 14.5 to Rs 14.70 trillion (12.4% to 14.2% of GDP), surpassing the budget of Rs 9.6 trillion in FY2022-23.
The fiscal deficit target for FY24 expected to be Rs 6.8 trillion (around 6.5% of GDP).
Ministry of Planning sets a GDP growth target of 3.5% for FY24 compared to the anticipated 0.29% growth in FY23.

Revenue collection target for the Federal Board of Revenue (FBR) set at Rs 9.2 trillion (8.76% of GDP) for FY24, a 23% YoY increase compared to the budget target of Rs 7.5 trillion in FY23.

Non-tax revenue projected to be Rs 2.5 trillion (2.4% of GDP) in FY24, an increase from the estimated Rs 1.6 trillion (2% of GDP) in FY23.
Total expenditure target set at Rs 14.6 trillion (13.9% of GDP) for FY24, representing a 12% YoY increase compared to the FY23.