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MGT111 Introduction to Public Administration GDB Solution Fall 2013

Case:

The main focuses of the 2013-2014 Budget were overcoming the energy crisis, stabilization of the economy, developmental projects, cutting down of non-development expenditures and enhancing productivity through new growth strategies.

Some prominent features of the Budget are following:

  • Prime Minister house expenditure to be decreased by up to 44%.
  • Sales tax to be increased from 16% to 17%.
  • VIPs will not be allowed to import vehicles without paying duty; and on the other side Hybrid cars up to 1200cc will be exempt from duty while duty on Hybrid Vehicles from 1200cc to 1800cc is reduced by 25%.
  • Micro-finance scheme to be launched for youths and mark-up loans will be provided to them; and Rs. 3 billion to be allocated for PM Laptop scheme.
  • PM youth skill development program will be launched and Youth below the age of 25 year holding a master degree will receive a stipend of Rs. 10,000 per month during one year training program.
  • 10% increase in pension has been approved while Rs. 8 billion allocated for social welfare programs, Ashiana Housing scheme would be launched in other provinces of Pakistan as in Punjab on the other hand Rs. 340 billion are allocated for development projects.
  • Rs. 57 billion allocated for higher education, Rs. 31 billion reserved for Railways and Rs. 225 billion of the development budget have been allocated for the energy sector.
  • Commercial electricity account holders will be charged an additional 5% sales tax if they are not registered tax payers. When they fulfill the condition and registered, this increase will be withdrawn.
  • Merchant and traders tax rate to be set at 25% and adjustable withholding tax is being introduced for wedding ceremonies, and from the next fiscal year corporate tax should be decreased to 30 percent.
  • Income Support Fund will continue and the amount will be increased to Rs. 75 billion which is an 80% increase. On the other hand Employment opportunities will be created in the public and private sector.

Question:

Keeping in mind the above mentioned salient features, critically analyze the Budget 2013-14 and briefly describe its three negative aspects?

Solution: 

1. Increase in Government expenses.

2. Increase in Sales Tax.

3. Large amount is allocated for useless Laptop Scheme

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