Federal Budget Speech 2017-18

Finance Minister Ishaq Dar on Friday presented the budget for the upcoming fiscal year 2017-18 with a total outlay of Rs 5.31 trillion.

This was the last budget of the Pakistan Muslim League- (Nawaz) government.

The finance minister said that today Pakistan is on the cusp of a high growth trajectory as its GDP has grown this year by 5.3% which is a 10-year high. Foreign exchange reserves are at a comfortable level, sufficient to cover about 4 months of imports; tax revenues have increased by 81% over the last four years translating into an average annual increase of 20%.

The resource availability during next year has been estimated at 4,681.2 billion rupees and net revenue receipts at 2,926 billion rupees.

The provincial share in federal taxes is estimated at 2,384.2 billion rupees, which is 11.6 percent higher than the budget estimates of the outgoing fiscal year.

The external receipts during next year are estimated at 837.8 billion rupees. The budget envisages defense allocations of over 920 billion rupees.

According to budget documents, the government has set an ambitious GDP growth target at 6%. “This is the fifth budget being presented by the PML-N government, and this is an achievement for democracy,” the finance minister said in his opening remarks.


Rs 180 billion for CPEC projects

The budget proposes Rs 180 billions allocations for the CPEC project. In another proposal custom duty and sales tax being lifted on the agriculture machinery.

The farmers will be provided 27 billion rupees subsidy in power consumption. Tax on mutual funds proposed to be enhanced to twelve and half percent.

Defence budget increased

The defence budget has been set at Rs920.2bn for the upcoming fiscal year.

Last year, Dar had announced Rs 860 billion allocation for defence expenses, showing 11pc increase in the defence budget comparing to 2015. In 2015-16, the defence expenditure was raised up to 11.3pc at Rs 780 billion.

The finance minister had said the nation rendered matchless sacrifices in the war on terrorism. He said that the armed forces were engaged in flushing out terrorists through the Operation Zarb-e-Azb.


For the Ministry of National Health Services, Regulations and Coordination allocations have been increased from Rs.25 billion to Rs.49 billion. This means that investment is being doubled as compared to the outgoing year.

The Phase-II of Prime Minister’s national health programme is being launched with the total cost of Rs.10 billion. Investments in vertical health programmes including EPI, Family Planning and Primary Health care and Population welfare programmes are being enhanced as compared to the last year.


Highlighting 22% increase, Rs. 133 billion have been allocated for education in the Federal budget 2017-18.

Allocations in the Higher Education Commission are proposed to be increased from Rs.21.5 billion in the current year to Rs.35.7 billion in the next financial year.


The government proposed Rs.401 billion for power sector development including investment of Rs.317 billion to be undertaken by WAPDA for the next year.

A new programme called ‘Energy for All’ is being introduced with an initial outlay of Rs.12.5 billion.

“By 2018, 10,000 MW of additional electricity will become part of the national grid. In addition, financial close have taken place for 15,000 MW of electricity generation projects beyond 2018,” said Ishaq Dar

GDP growth rate target fixed at 6%

The GDP growth in the ongoing fiscal year 5.28. In budget 2017-18, the GDP growth rate has been fixed at six percent. While, economy volume crosses 300 billion dollars.

He pointed out that agriculture sector registered 3.46 pct growth this year. While industrial sector growth rate registered at 5.02 pct. “The per capita income in last four years increased from 1334 US dollars to 1629 dollars- an increase of 22pct in incomes.”

Subsidy on electricity

Rs20 billion are proposed to be allocated for the laptop scheme. While Rs121 billion are proposed for the Benazir Income Support Programme which would benefit over 6.8 million needy people. Similarly Rs118 billion allocated for subsidy on electricity. Subsidy would continue for those having consumption of 300 units monthly the most.

Agricultural loans

The volume of loans for agriculture would be equal to development loans. Moreover, the farmers having 12 acres land would get agricultural loans by 9.9 ratio per annum. GST and custom duty will be removed from agricultural machinery.

10% increase in pensions

The minister announced 10 percent increase in government pensions. Dar also said that minimum wages in the country enhanced to 15,000.


All Army officers and jawans will receive a 10 percent special allowance other than the salary increment in lieu of their sacrifices in Pakistan’s war against militancy.


Government is focusing on building dams and improvement the water distribution infrastructure.

Rs38 billion will be allocated under this head.

Roads and highways

The government proposed a massive outlay of Rs.320 billion as compared to Rs.188 billion allocated in the outgoing year.

This represents the largest increase of 70% for development of roads, motorways, highways and bridges. The investment is being enhanced from Rs.51 billion in 2013.


Rs45.9bn to be allocated to Railways, including for 75 new engines, 830 bogies and 250 coaches and the Peshawar to Karachi railway line.

Human development

  • Rs35.7bn for Higher Education.
  • Health programs will receive Rs49bn.
  • Hospitals will receive Rs10bn.
  • Rs12.5bn will be allocated for Clean Drinking Water for All.
  • Sustainable development goals will get Rs30bn.


31 new projects, including a new airport, 200-bed hospital and desalination plants.

Public Sector Development Programme

The government unveiled Rs 2.113 trillion Public Sector Development Programme (PSDP) for the fiscal year 2017-18, which would be utilized for various ongoing and new development schemes.

The PSDP allocations showed an increase of 26.14 percent when compared to the development funding of Rs 1.675 trillion during last fiscal year.

Out of total PSDP, Rs 1001 billion have been set aside for the federal departments whereas a sum of Rs 1112 billion allocated for the provinces.

According to details, out of Rs1001 billion federal PSDP, the government allocated Rs 35.662 billion for Higher Education Commission, Rs48.701 for National Health Services, Regulations and Coordination Division, Rs18.936 billion for Finance Division and Rs 15.666 billion for Interior Division.

An amount of Rs4.348 billion has been allocated for Aviation Division, Rs 5.188 billion for Capital Administration and Development Division, Rs1.2 billion for Commerce Division, Rs13.660 for Communication Division, Rs4.468 billion for Defence Production Division while Rs2.961 billion allocated for Federal Education and Professional Training Division.

An amount of Rs10.386 billion has been earmarked for Housing and Works Division, Rs2.737 billion – Industries and Production Division, Rs1.538 billion – Information Technology and Telecom Division, Rs3.044 billion – Inter Provincial Coordination Division, Rs1.2 billion – Law and Justice Division, Rs1.614 billion – National Food Security and Research Division and Rs15.085 for Pakistan Atomic Energy Commission.

The Planning, Development and Reform Division would receive an allocation of Rs16.798 billion, while Rs12.775 billion would go to Ports and Shipping Division, Rs42.9 billion to Railways Division and Rs2.427 billion would be given to Science and Technological Research Division.

An amount of Rs26.900 have been allocated for States and Frontier Regions Division, Rs3.5 billion for SUPARCO, Rs36.750 billion for Water and Power Division (Water Sector) while an amount of Rs60.909 billion for WAPDA (Power).

Rs30 billion has been set aside for Prime Minister’s Global SDGs Achievement Programme, Rs40 billion for Special Federal Development Programme, Rs12.5 billion for Energy for All project, Rs7.5 billion for ERRA and Rs5 billion for Special Provision for Completion of CPEC Projects.

The government also earmarked Rs45 billion for Relief and Rehabilitation of IDPs, Rs45 billion for Security Enhancement, Rs20 billion for Prime Minister’s Youth Initiative, Rs25 billion for Gas Infrastructure Development Cess while Rs43.644 for Kashmir Affairs and Gilgit Baltistan Division.

In addition, the government allocated Rs159 million for Cabinet Division, Rs815 million for Climate Change Division, Rs535 million for Defence Division, Rs270 million for Establishment Division, and Rs200 for Foreign Affairs Division.

The PSDP allocation for Human Rights Division were fixed at Rs306 million, Rs811 million for Information and Broadcasting Division, Rs220 million for Narcotics Control Division and Rs272 million for National History and Literary Heritage Division.

An amount of Rs100 million have been allocated for National Security Division, Rs321 million for Pakistan Nuclear Regulatory Authority and Rs554 billion for Petroleum and Natural Resources Division.

Similarly, an amount of Rs790 million have been allocated for Revenue Division, Rs200 million for Statistics Division and Rs217 million for Textile Industry Division.


The opposition walked out from the National Assembly on Friday prior to the budget speech in protest against the crackdown on peasants. Leader of Opposition in National Assembly Khursheed Shah said the peasants were even far from red zone when they were lashed out.

“The farmers were demanding to call off general sales tax (GST), however the crackdown by the government reflects their dictatorial approach,” he said.

Following are the budgetary figures of the last four years.

GDP growth rate

Pakistan’s GDP growth rate for FY 2013-2014 was 4.1 percent. Pakistan had secured a $6 billion loan from the International Monetary Fund to avoid a balance of payment crisis. In FY 2014-2015, the GDP growth rate increased slightly to 4.2%.

This improved significantly in FY 2015-2016 at 4.7% but remain less than the targeted 5.5%. The outgoing FY 2016-2017 GDP growth stood at 5.3% even though it remained below the forecast.

The government has expressed satisfaction stating that this the first time in ten years that Pakistan has crossed the 5% GDP growth mark. Finance Minister Ishaq Dar has forecast GDP growth for FY 2017-2018 at 6%.


During Nawaz Sharif first year of current government, inflation remained high at 8.5 percent during FY 2013-14. This reduces drastically in FY 2014-2015 assisted by falling global oil prices and fiscal consolidation. The forecast inflation during FY 2015-2016 was reduced to 6 percent but clocked in 3.5 percent. The outgoing FY 2016-17 witnessed inflation rate at 4.1%.

The uptick in inflation is said to be due to the revival of global oil prices along with a rise in domestic demand due to pick up of economic activities, but is expected to remain below the target.

Defence budget

Pakistan Army launched Operation Zarb-e-Azb in June 2014. This was followed by Operation Radd-ul-Fasaad in February 2017 following a resurgence in terrorist incidents. This has seen defence budget rise gradually since the last four years.

The government had designated Rs700.1bn for defence expenditures in FY 2014-15 but the actual expenditures were Rs720bn. This had increased significantly by from Rs629.72bn spent in the preceding fiscal year.

In FY 2015-16, the defence allocation witnessed a ten percent increase as it ballooned to Rs781.1bn from Rs700.1bn. The actual expenditures for the year remained at Rs775.8bn For FY 2016-17, the government allocated Rs860.1 billion for defence expenditure. This was a 11 percent rise showing an increase of Rs85bn.