ISLAMABAD: Finance Minister Shaukat Tarin will unveil the National Economic Survey 2020-21 on Thursday (today) for the outgoing fiscal year to provide an overview of the national economy, highlighting performance and achievements in different sectors during the fiscal year.
In a statement, the finance minister said the government is committed to present a pro-people, business-friendly and growth-oriented federal budget for the next fiscal year. He expressed determination to pursue all-inclusive, sustained and robust economic growth through short, medium and long-term economic planning.
The federal government has convened a session of the National Assembly on June 11 to table the budget for the next fiscal year 2021-22. The budget will be presented by Finance Minister Shaukat Tarin in the assembly and it will also be tabled before Senate to conclude debate by 28 June.
The total outlay of the federal budget is estimated at Rs8.4 trillion. It recommends 10-15 percent increase in salaries of government employees while the budget for pensions of government employees is estimated at Rs470 billion.
The economic survey claims a projected GDP growth of 3.9 percent and Rs 4170 billion revenue collection (July-May 2021), the highest ever in the country’s history as major achievements of the outgoing fiscal year.
There was a notable increase in economic activity with easing of restrictions, large-scale manufacturing (LSM) gained traction, demand indicators started showing encouraging growth, and all major Kharif crops, except cotton, exceeded their respective production targets.
The services sector also showed buoyancy, fiscal and external sector exhibited marked improvement as current and primary account deficits turned into surpluses and the trend continued until the end of the third quarter.
Initially, the market-determined exchange rate touched a low in August 2020. Since then the rupee began strengthening and appreciated by 9.5 percent by end-April 2021. However, inflation, measured through CPI, remained high and food prices continued their upward trajectory.
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According to the economic survey, agriculture sector comfortably achieved its growth target; but its growth performance was slower than last year as it grew by 2.8 percent in the current year against 3.3 percent in 2019-20.
During 2020-21, the crop sector posted a growth of 2.5 percent which was lower than 5.5 percent growth achieved during 2019-20, mainly due to the decline in cotton output.
Manufacturing sector recorded high growth of 8.7 percent against contraction of 7.4 percent last year, with an increase of 9.3 percent in large-scale manufacturing (LSM) that led to the overall growth of the manufacturing sector.
The services sector was worst affected last year owing to falling tourism revenues, lower mobility in the transport sector (air, rail, ships and road), lockdown inflicted complete cessation of trading activities, closure of education institutions, event management and community services.
The services sector revived to almost pre-pandemic levels except for transport and posted 4.4 percent growth against a rare contraction of 0.5 percent last year. Transport-related services posted marginal negative growth of 0.6 percent.
The investment-to-GDP ratio declined slightly from 15.3 percent of GDP in 2019-20 to 15.2 percent in 2020-21. Foreign direct investment (FDI) contributed to this downslide.
Fixed investment increased by 5.8 percent in real terms and 13.8 percent in nominal terms. Private sector investment increased by 6.5 percent, notwithstanding the fall in FDI due to global pandemic driven uncertain environment.
