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Budget 2021-22 Updates: 10% increase in Salaries & Pensions Proposed

By: MS Baig

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Islamabad: Budget 2021-22 Updates: Pakistan Govt proposed a 10% ad-hoc relief in Salaries and Pensions.

The increase in salaries and pensions would be applicable from July 1 of this year.

Federal Finance Minister Shaukat Tareen presented a budget of about Rs. 8,400 billion for the new financial year by the federal government.

Budget 2021-22 Updates: Salaries and Pensions

According to the federal budget, a 10 percent increase in the salaries of government employees has been proposed from July 1.

  • It is proposed to increase the pension of retired employees by 10%.
  • It is proposed to increase the orderly allowance from Rs. 14,000 to Rs. 17,000 per month.
  • The integrated allowance of Grade 1 to 5 employees is being increased from Rs. 450 to Rs. 900.
  • It has been also been proposed to increase the minimum wage to Rs 20,000 per month.

Mobile Phone Calls & Internet Packages

Budget 2021-22 Updates
Budget 2021-22 Updates

The federal budget proposes a federal excise duty on mobile phone calls, internet data usage, and SMS lasting more than 3 minutes.

It is proposed to reduce the existing holding tax on mobile services from 12.5 percent to 10 percent and after some time to 8 percent.

Tires and Cell Phones:

  • The next budget proposes to increase regulatory duties on imports of mobile phones and tires.
  • It is proposed to introduce a special export scheme to promote exports.

Under this, SMEs and other sectors will be able to make duty-free imports, the duration of which has been extended from two years to five years.

Loans in the Budget 2021-2022

Budget 2021-22 Updates
Budget 2021-22 Updates
  • Interest-free loans of up to Rs. 500,000 will be provided to every citizen household for business.
  • He said that interest-free loans of Rs. 1.5 lakh would be given to each farming family for the cultivation of each crop.
  • Similarly, interest-free loans of up to Rs. 2 lakh will be provided for mechanical assistance and tractors.
  • Cheap loans of up to Rs. 2 million will be provided for the construction of low-cost houses.
  • A subsidy of Rs. 3 lakh will be given to help in the construction or purchase of a house.
  • One member of each household will receive free technical training and a health card.
  • For this purpose, Rs. 33 billion has been set aside in the budget.

In addition, a budget of Rs 260 billion has been proposed for the Ehsas program.

Electric and 850cc Cars

The federal budget proposes tax breaks on the import of kits for the local manufacture of electric vehicles.

  • The sales tax rate for these vehicles has been reduced from 17% to 1%.
  • Federal excise duty and EAT tax on 850 cc locally made vehicles were abolished.
  • It is proposed to reduce the sales tax rate on these vehicles from 17% to 12.5%.
  • The total revenue for the next financial year is estimated at Rs. 7909 billion and the revenue growth target is 24%.
  • The FBR target has been proposed at Rs. 5829 billion with 24% growth.
  • Non-tax revenue growth is targeted at 22%.
  • The share of provinces in federal taxes has been increased from Rs 2704 billion to Rs 3411 billion. An additional Rs 707 billion will be given to the provinces.
  • The federation will provide Rs 98 billion for the betterment of Karachi.

Tax Exemption on IT

Finance Minister Shaukat Tareen said that a zero-rating facility has been provided to IT service exports.

  • Federal excise duty on fruit juice has been abolished.
  • The exemption has been given on the import of standard paper for the publication of the Holy Quran.

The federal budget exempted self-destructing syringes and oxygen cylinders.

Defense Budget

The New Year’s defense budget is 16% of the total national budget and 2.8% of GDP, of which the Pakistan Army’s defense budget is 7% of the national budget.


The budget speech said that C-Pack’s 17 major projects worth 13 13 billion have been completed and another 21 projects worth 21 21 billion are underway.

26 projects worth 28 28 billion of strategic nature are under consideration, completion of Karachi-Lahore Motorway is among the priorities in the budget.

Anti-Sexual Abuse Fund

  • The federal budget proposes to set up an anti-rape fund. Rs. 100 million has been allocated for this purpose.
  • Rs 66 billion has been allocated for the Air Education Commission and another Rs 44 billion for the development budget, which will be increased by Rs 15 billion later.
  • Rs 20 billion has been earmarked for PIA and Rs 16 billion for steel mills.
  • 5 billion has been allocated for census and 5 billion for local government elections.

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