June 23 - 29, 2008

The Punjab government placed before the assembly the budget for fiscal year 2008-09 amounting to Rs 416.94 billion with focus on poor people and generating resources through taxing high income people.

In the annual budget, Rs 160 billion allocated for development and Rs 17 billion was set aside for subsidy on basic amenities to the poor. Education gets 40.3 percent more funds as compared to current fiscal while sales tax increased from 15 percent to 16 percent. The other features of the budget are: abolition of CVT on sale/purchase of property, Rs 9,000 million allocated for health sector, Rs 700 million earmarked for social protection sector, subsidy provided on 10,000 tractors, Rs 8 billion allocated for water supply and sanitation, Rs 11.30 billion allocated for irrigation, Rs 3 billion allocated for agri sector in ADP showing an increase of 214 percent as compared to allocations made in fiscal 2007-2008, Rs 1.90 billion allocated in ADP for livestock, Rs 2.344 billion allocated for law and order, Rs 2.50 billion allocated for emergency service, Rs 1.50 billion for IT sector, Rs 300 million for mineral and natural resources.

A sum of Rs 1900 million has been proposed for the promotion of livestock and dairy development in the Punjab budget for 2008-09. The amount is 58 percent higher than the allocation of Rs 1200 million for livestock and dairy development in the budget 2007-08.

As per details, Rs 1,740 million has been earmarked for livestock production, Rs 89 million for science and research, Rs 70.980 million for education and training while none of the allocations have been made for the poultry production.

National Programme for Improvement of Watercourses has got an allocation of Rs 110 million in the provincial budget for the year 2008-09. Total cost of the project is Rs.433 million. As many as 28,000 watercourses and 2,000 lift irrigation schemes in Barani Areas are part of the project. The project includes Promotion of High Efficiency Irrigation Systems in Pakistan with Chinese Assistance (Total cost: Rs.383 million), allocation in the budget Rs 5 million. Other includes:

- Installation of irrigation system over an area of 2,500 acres for demonstration and training by Chinese experts.

- Establishment of international institute at Renala Khurd for training and research studies in water efficiencies.

- Water Conservation and productivity enhancement through high efficiency irrigation system (Total Cost Rs 1171 million, allocation for 2008-09 Rs 314 million).

- Demonstration of High Efficiency Irrigation system Promotion of Drip and Sprinkler irrigation and Installation of these systems over an area of 130,642 acres. Greater Thal Canal (GTC) Command Area Development Project Phase I (Total cost Rs 1,000 million , ADP 2008-09 Rs 200 million).

The Punjab government has also earmarked Rs 9,000 million for the health sector in the ADP for the fiscal 2008-09, which reflects an increase of 38.4 percent over the allocation of Rs 6,500 million for the fiscal 2007-2008. For preventive and primary health care, an amount of Rs 3,636 million has been allocated against Rs 3,315 million earmarked in the current fiscal.

A sum of Rs 750 million has been allocated for preventive care and Rs 2,886 million for Accelerated Programme for Health care against Rs 741 million and Rs 2,319 million respectively in ADP for year 2007-08.

For tertiary care hospital an amount of Rs 2,839 million has been allocated in the ADP for 2008-09 as compared to Rs 2,210 million sided in the fiscal 2007-08.

An amount of Rs 835 million has been allocated for medical education against Rs 325 million for the current fiscal while Rs 112 million have been earmarked for Research and development against Rs 130 in the ADP for the current fiscal year.

An amount of Rs 1500 million has been allocated for Information Technology (IT) sector in the provincial budget 2008-09. The allocation is 1.3 percent of annual development programme (ADP 2008-09) to be provided for the implementation of 36 projects sponsored by Information Technology Department (ITD), Punjab Information Technology Board (PITB) and the government departments.

Support to local IT industry through investment, automation of business processes in public sector institutions for transparency, management, and public convenience, support to district governments in establishing IT infrastructure, encouraging public private partnerships and promotion of e-government environment in the province are the parts of strategy adopted by the government for IT development.




The budget is expected to boost agriculture production. It will provide fertilizer and pesticides at cheaper rates to the agriculturists. It will raise the subsidy on DAP fertilizer to Rs.1,000 per bag from Rs.470. It will remove general sales tax (GST) on pesticides and fertilizers. In addition to this, it will allow duty free import of bulldozers. The budget will allocate Rs.75 billion for building new dams and improving the irrigation facilities. The budget will provide relief to the poverty stricken people Rs.34 billion under "Benazir Income Support Programme".


The rate of sales tax increased from 15 to 16 per cent will hit poor consumers specially.

According to the budget widows, pensioners and senior citizens will have to pay 10 per cent in respect of profit from pensioners benefit and behbood welfare scheme. This will increase their hardship as this is their only source of income.

Housing industry development will be slowed down, as developers will be required to pay tax at Rs.50 per square feet for the covered area of a land. Also the middle class will be burdened with high cost of building a house.

Withholding tax on cash withdrawn from bank collected at 0.2 per cent is proposed to be enhanced to 0.3 per cent, which will hurt the poor and middle class.

Federal Excise Duty on all kinds of telecommunication services will be increased to 21 per cent, which will have an adverse impact on the general consumers.

The budget of 2008-09 does not show rosy picture of the economy for the common consumer. The common man is subjected to 16 per cent sales tax plus many other withholding taxes at source on essential commodities. Wealthy persons have remained untouched from any sort of heavy tax burden instead of now they can go scot-free by just paying 2 per cent tax.