The Senate in its week-long session completed its
debate and review of the Finance Bill 2004-05 and decided with a
consensus to transmit to the National Assembly, 32
recommendations/amendments for consideration and incorporation in the
budget 2004-05 provisions. The National Assembly has yet to pass the
budget. Under the constitution, Senate can only review and make
recommendations to the National Assembly.
During the budget debate in the Senate, the treasury
benches have moved 88 recommendations, democratic alliance 31 and MMA 83
recommendations. After debate and consultation they developed a
consensus on 32 recommendations.
Responding to the questions by many members from the
opposition including those belonging to MMA, the Finance Minister ruled
out the possibility of sharing the details of defense expenditure with
the members. "The defense expenditure has never been discussed in
the parliament before nor it can be done now due to National Security,
he added. The opposition senators had moved a motion to freeze the
defense budget rejecting the motion to outright, the Finance Minister
declared that these would be no cut in the defense expenditure and the
government will provide all the necessary funds to make the country's
defense stronger. Winding up the debate in the Senate, he said that the
government was making all possible efforts to make country economically
stronger with a strong defense. The budget is relief, growth and
investment-oriented and would generate job opportunities. The budget
proposes to provide relief to all segment of population and incentives
to all sector of economy.
Opposition members, however, challenged the argument
advanced by the Finance Minister that breaks up of defence expenditure
cannot be disclosed in the parliament due to National Security. Senator
Farhatullah Baber of PPP wondered how national security could be
jeopardized if the house was given a broad break-up of military spending
in terms of allocation for the Air-Force, the Navy and the Army and the
break-up in terms of salary and modernization of equipment. Professor
Ghafoor Ahmed and Professor Khurshid Ahmed demanded the defense budget
should also be discussed in the house.
The 32 recommendations of the Senate have been
transmitted to the National Assembly for its consideration. Last year,
the Senate sent six proposals, which were rejected by the National
Assembly within few minutes. It is, however, expected that this time the
National Assembly will not be so harsh and would show due respect to the
upper house. It is hoped that most of the recommendations of the Senate
would be accepted. The Senate recommendations have been finalized by the
Senate Committee on Finance under the Chairmanship of Senator Ahmed Ali.
Chaudhry Anwer Bhinder and Kamil Ali Agha of the PML,
Ishaq Dar, Dr. Safdar Abbasi, Dr. Akbar Khawaja of the Democratic
Alliance and Professor Khurshid Ahmed of the MMA supported
recommendations of the Senate Committee on budget. Out of 32
recommendations, 13 recommendations deal with amendments in the Finance
Bill and the remaining are general recommendations.
The approved general recommendations suggested that
the limit of taxable income may be raised from rupees 80,000 to Rs.
120,000 allowing a minimum of rupees 10,000 monthly tax free income to
The Pay and Pension Committee may consider increase
of 20% for BS 1 to 15 and 12.5% for 17 and above.
The Senate committee recommends that the duty on part
of a computer should be 0% while on the finished products the duty
should be 5%.
The Senate committee recommends the Pay and Pension
Committee should look into the proposal of giving ad-hoc dearness
allowance for government servants who retired prior to 1994 and those
who retired after 1994 at the rate of 25% and 15% respectively.
The Senate committee recommends that the price
reduction of DAP fertilizer should also be extended to all kinds to
fertilizer so as to benefit the farmers.
The Senate committee recommends that CBR should
remove the existing anomaly in duty and tax pertaining to cosmetics.
The Senate recommends that in view of the fact that
provinces are burdened with loans; the committee of the Finance Ministry
looking into this matter may hike the interest rate paid by provinces to
the weighted average interest rate. Accordingly relief be given to
provinces with provision to liquidate their loans from other sources.
The Senate committee recommends that in future GST at 15% should be
rationalized at 12% by broad basing this tax.
The Senate noted the increase in the budget for
education sector. However, it is recommended that in future allocation
for this sector should at least be 2% of the GDP.
The Senate committee recommends that parliament
should be taken into confidence about foreign loans and its mechanism to
the Finance Committee of both the Houses.
The Senate recommends that austerity measures should
be adopted in respect of government advertisements depicting their
achievements to save valuable funds.
The Senate committee recommends that amount allocated
for PSDP should be disbursed at least on quarterly basis, if required
for the project. The Senate recommends that Sales Tax or any other tax
levied on motorcycles should be abolished.
The Senate committee recommends that the rate of
interest on agriculture loans, which are timely paid, should be reduced
to 8% in general and 7% for those who make prompt repayment.
The Senate recommends that exemption from customs
duty should be extended to the import of diagnostic kits especially for
Hepatitis B, C and HIV.
It has been represented that as the National Finance
Commission's 6th Award has not yet been announced and Balochistan
Government is under the debt of Rs. 4 billion to State Bank of Pakistan,
and new budget has increased salaries of government employees and the
provincial government is facing difficulties under the NFC's 5th Award,
the Senate therefore, recommends that this matter be decided by the NFC
judiciously. The Senate recommends that budget making process should be
thoroughly reviewed to ensure greater and effective participation in it
of both the Houses of Parliament.
The Senate committee recommends that the proposed
budgetary allocation of Rs. 652 million should be for Foreign Faculty
Hiring including Pakistani faculty working abroad.