PRSENTATION ON ECONOMY OF PAKISTAN BY

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Acknowledgement2

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PRSENTATION OFECONOMY OF PAKISTANTOMAM. SADIA AHMAD3

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Presented on the Topic of:

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There are two parts of our presentation6

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IntroductionFiscal Policy is consists of following points:

One major function of the Government is to stabilize the economy (prevent unemployment or inflation)

Stabilization can be achieved in part by manipulating the public budget-government spending and tax collection to increase output and employment or to reduce inflation.

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History Keynes advocated about the use of Fiscal Policy as a way to stimulate economies during the great depression. Fiscal policy was particularly used in the 50s and 60s to stabilize economic cycles. These polices was broadly preferred to as Keynesian. In the 1970s and 80s governments tended to preferred monitory policy for influence the economy.

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FISCAL POLICY

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Objectives of Fiscal Policy

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It can have a significant impact on the Economy

It can be discriminating which allows different regions or consumption habits to prosper.

It makes the distribution of income fairer through progressive taxes & benefits.

Advantages of Fiscal Policy

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Types of Fiscal PolicyExpansionary Fiscal Policy

When government spending are increased in the economy, it is termed as Expansionary Fiscal policy.

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Types of Fiscal Policy When government spending are reduced in economy, it is known as contractionary.

2. Contractionary Fiscal Policy:13

Faraz RafiqM14BBA043 14

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1. Internal Resources2. External Resources

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1. Internal Resources 2. External ResourcesBudget 15-16. Pakistans Internal Resources collection::: Rs. 3366827 million.Budget 15-16, Pakistans External Resources collection::: Rs. 751,511 million. Source: Ministry of Finance, Government of Pakistan. Budget 15-16.Government EarningsTOTAL Amount Of BUDGET 15-16 is 4.3 Trillion.16

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REVENUE RECEIPTS Taxation1. Direct Taxes

Budget 15-16, Pakistans collection of Tax Revenue through FBR was::: Rs. 3,418,221 million.1. INTERNAL RESOURCES17

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Sources of Direct Tax: Income Tax Payroll Tax

Per unit tax

Property Tax

Budget 15-16. Pakistans collection of Direct Tax::: Rs. 1,347,872 million.

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INDIRECT TAXES

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Sources of Indirect Taxes Capital Gains Tax

Estate Tax

Excise Tax

Consumption Tax

With Holding Tax

Budget 15-16, Pakistans collection of indirect resources:::: Rs. 1,755,834 million.20

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NON TAX REVENUE Property and Enterprise

Civil Administration And Other Functions

Fee

Royalty

Tariffs Budget 15-16. Pakistans Non Tax collections::: Rs. 894,524 million. Total Net Revenue Receipts are in budget 15-16. Rs. 2,463,351 million.Source: Ministry of Finance, Government of Pakistan. Budget 15-16.21

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NET CAPITAL RECEIPTSCAPITAL RECEIPTS

Recovery of Loans & Advances

Public Debt Net

2. DISBURSEMENTTOTAL NET REVENUE RECEIPTS in Budget 15-16::: Rs. 739338 million.

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2. EXTERNAL RESOURCES1. EXTERNAL LOANSProject loansProgrammed loansOther Aid

2. EXTERNAL GRANTSProject Aid Grand

TOTAL EXTERNAL LOANS & GRANTS in Budget 15-16::: Rs. 751,511 Million. 23

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Government Expenditures1. Revenue ExpendituresTotal Current Expenditures in Budget 15-16::: Rs. 3, 482,239 million.

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REVENUE EXPENDITURES Mark-up Payment 1279895 Million Mark-up on domestic debt. 1168676 Mark up on foreign debt. 1112192. Pension 231000 Million Military 174271 Civil 56729

3. Subsidies 137603 Million

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4. Running of Civil government 3,26,331 Million

5. Provision for Pay and Pens 250000 Million

Source: Ministry of Finance, Government of Pakistan. Budget 15-16. REVENUE EXPENDITURES26

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6. Medical Products, Appliances and Equipment Rs. 27 M

7. Hospital Services Rs. 9,133 M

8. Public Health Services Rs. 423 M

9. Health Administration Rs. 1,426 M

10. Education Affairs and services Rs. 75580 M

Source: Ministry of Finance, Government of Pakistan. Budget 15-16. REVENUE EXPENDITURES

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2. Defense Affairs and Services 781162 Million 1. Foreign Loans Repayment 3482239 Million CAPITAL EXPENDITURES3. Grants and Transfers Grants to provinces 38300 Million Grants to others 371575 Million28

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Abid HusainM14BBA03629

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Introduction

Government use fiscal policy as

A fiscal deficit

Keynesian Economist suggest ..31

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Effects by Govt. Earnings Taxation When Government imposed TAX in the economy then these major effects occurs in the economy. Productivity declines GDP declines Inflation Inadequate Incomes Low wages High Prices Shoddy Products Products Unavailability & Discontinuation Unemployment Poverty High rate of crimes Blacking Low Real Revenue

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Productivity Declines When this situation occurs in the economy then:.Production at overall DECREASE & GDP decline rather increase. Supply of goods/output also reduced.

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GDP DeclinesThen result on economy is:.34

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Inflation

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Inadequate Incomes36

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Low wages GOVTS. Impose heavy taxes

These Taxes take away

So, Cant pay good wages to workers.

Low Production 37

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High Prices

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Shoddy Products

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Abdul Rehman Sukhera M14BBA08340

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Unemployment41

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Poverty

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High rate of crimes

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Blacking

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Low Real Revenue High Taxation on factors of production & income leads to unemployment.

Productivity also reduced

& by this way, increase in Taxes 1 percent leads to reduce 2 to 3 percent GDP.45

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Effects by Govt. Earnings Foreign Aid Have no significant impact on economic growth & development.

It leave some positive effects on economy.

On other hand, Foreign Capital inflows have a negative impact on Economy.

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Effects by Govt. Earnings Loans & Debts

Loans & Debts Considered as Future spending

It must be repaid through future exceeding taxation

It reduce resource allocation

It is unproductive use of govt. funds

Its repayment every year leads to lowproductivity.

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With Holding TaxOn bank transaction which is 50000 or more.Help the Government to raise 35 Billion from this.This is a eigime. It was said by PPP Leader Ayesha Glalai. Government imposed tax on banking transactions. This Directly effects the Business Sector & Also Decrease the Productivity.By this way Government Direct influence the Business, it reduce Dailey transactions.48

High Inflationary Budget This is a opposition point of PPP Leader Ayesha Glalai

This budget is High Inflationary Budget.

In Budget 13-14, GST was 16%. Government Raise to 17% in Budget 14-15.

This is inflationary trend in the Economy. 49

Sher Afzal M14BBA07250

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Effects by Govt. Spendings

Spending of Government have direct impact on aggregate demand. Government may increase or decrease aggregate demand.There are two ways by which Govt. spend his income:Productive Use of Funds

Unproductive Use of Funds51

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Productive Use of Funds Productive use of funds by Government pay good impact and positive impact on Economy. Expenditures by govt. on Agriculture, industries, education, services etc.

These expenditures increase the productivity of economy.

Due to these expenditures living standard of people increase.

A country becomes from developing to developed.

Its impact on economy is positive in all the cases.

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Productive Use of FundsGovernment of Pakistan announce a subsidiary package for Agriculture sector. Government of Pakistan bear the loss of reduce GST on seeds from 10% to 5%.

Rs. 5000 should be given to every Farmer per Acre.

341 Billion are allocated to Agriculture sector in this Fiscal Year to raise the share of Agriculture in GDP to the extend of 21% of total GDP.

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Productive Use of Funds Create 5 Million Jobs, our Economy needs 36 Million Jobs.

Government of Pakistan allocated 248 Million to Energy Sector, due to this 7000 MW added to total supply.

Government of Pakistan make free from Taxation to Industrial Units in KPK.

Government of Pakistan gives 10 years Tax holiday to Investors.

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Anti Poor Budget 55Objection point by opposition that this Budget is Anti Poor Budget. Because in this budget GST raise from 16% (Budget 13-14) to 17% (Budget 14-15). Prices of Petroleum products raise to 5% GST by the government in this period. Government imposed Tax on CNG by 17 percent (Budget 14-15). All these Taxes have Directly Burdon on Poor. Due to GST, prices of house holds increase. Due to CNG tax, fair and carriage raise. Petroleum prices also imposed effect on many products.

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Unproductive Use of Funds Unproductive use of funds by Government pay bad and Negative impact on Economy. Use of funds on construction of roads, military expenses, protocols etc. We cant say that these expenses have no any benefits for economy.

These expenditures have less benefits for economy as compare to productive expenditures.

In one side, our economy requires high investment, but other side, we use our funds unproductive.

Unproductive Use of Funds56

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Unproductive Use of Funds Opposition Parties made objection on Metro Bus Projects in different cities of Punjab. & Orange Train Project in Lahore. Because these expenses are unproductive. So, there are other many better ways for using funds.

These are not a waste of funds rather we can say that Government should spend funds on better place rather Metro Buses & Orange Train.

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Unproductive Use of Funds

Government Of Pakistan raise military Budget 11 Percent. It become more than 780 billion. 185 billion allocated to the Construction of Roads, Bridges and other Development expenditures. Development Expenditure raise by Government to 65 Percent from Last Fiscal Year. Repayment of Loans is also unproductive use of funds.

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Current Challenges Unemployment Deficit Balance of Payment In efficient use of Natural Resources Population Expulsion Political Instability Each political party has its own Policy. There is no coordination between Political Parties. Each Party leader has different background.

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Solutions Pakistan needs to Redirect its Priorities. Invest in Basic Human Needs Maximum utilization of Natural Resources. Government must ensure equity and social Justice. Provide a major stimulus to Economic Growth. Politicians must be Graduate, with one subject of Economics. Political Parties must be agreed on a point which is in favor of Economy.

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Conclusion

After all this we conclude by saying that We are Backward Economically in the World as far as in South Asia.614.3%

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Any Question ??????62

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