Fiscal Policy of Pakistan
According to Semuelson: fiscal policy is concerned with all
those activities which are adopted by the government to collect
revenues and make the expenditures so that economic stability
could be attained without inflation and deflation”
Objectives of fiscal Policy
3.Optimum allocation of economic resources
4.Increasing rate of investment (6.50% - may 2015)
5.Reducing inequality of income and wealth
Tools of Fiscal policy
Budget of Pakistan 2015-16
o Budget : An estimate of costs, revenues, and resources over
a specified period, reflecting a reading of future financial
conditions and goals.
Process of preparing budget of Pakistan:
1. Preparing of budget
2. Consideration debts and approval of budget
3. Communication of grant
4. Execution of budget
5. Post budget allocation
6. Post audit
Budget of Pakistan
• 4.451 economic growth is expected
(direct taxes 13457 billion) and (indirect
taxes 1755 billion)
• Pension increased by 7.5%
• Markup rate of Business Youth
Loan Scheme reduced to 6%
• Rs600 billion for agriculture sector.
• Rs 20.88 billion for health sector.
• Rs71.5 billion for education
• Rs 159.6 billion for national high way
• Rs151 billion for security for CPEC route
• Rs78 billion for Pakistan Railways
• Rs100 billion for TDPs
• Rs 30.4 billion for Pakistan atomic energy
• Rs20.5 billion for HEC
• Rs 112.28 billion for wapda
• Rs 19600 mw for electricity
• Government expenditure is the spending made by the
government to achieve the fiscal objectives and increase the
general welfare of the people
• Basic objective of these spending is the welfare of the society
• Total expenditures incurred during 2015-16 Rs 4,451 billion
Types of government expenditures
Development or capital
Incurred for development purpose.
Include expenditures incurred on long
term planning projects
• Industrial and agricultural
• Railway, social welfare ,health
projects, education schemes
• and on the projects of water ,gas and
Include expenditures incurred on day
to day functioning:
• Economic, community and social
• Maintenance of law and order,
• General administrator
• Debt servicing
• Government subsidies etc.
Non Development or current
Government expenditures financed by these sources
• Internal source: include recoveries of advances and loans,
floating and permanent debt ,savings schemes of the
• External source: Foreign aids which includes project aid
,technical aid ,grants etc.
• Lump sum amount
Direct tax is the tax that is directly paid by
the person on whom it is imposed.
And direct tax is current ratio is 0.8%.
Types of Direct taxes
There are four types of direct tax.
o Income tax
this type of tax current ration is 20%
o Property tax
this type of tax current ratio is 0.0%
o Corporate tax
this type of tax current ratio is 33%
o Wealth tax
this type of tax estimated on total
wealth of a person.
• These taxes are paid by
• Indirect taxes are regressive
• Indirect taxes are
• Indirect taxes evasion is
• Indirect taxes are not
• Indirect taxes are equitable
Indirect tax is the tax which is not paid by the
person on whom it is imposed and its burden is shifted to
Types of Indirect taxes
Sales tax : A sales tax is a consumption tax
imposed by the government on the sale of goods and
Custom duty : Customs taxes are applied to
imported and exported products.
Excise duty: it imposed on the producer and is
shifted to the consumer
• Income from property and enterprise
• Profit from post office and telegraph
• Trading profit
• Interest receipts
Hinweis der Redaktion
1. floating debt short-term government borrowing, esp. by the issue of three-month Treasury bills 2. Long term debt Long-term debt or equity financing. In general, permanent financing is used to purchase or develop long-term fixed assets like factories and machinery
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