While winding up the budget debate in Senate on Friday, Finance Minister Shaukat Aziz opposed decrease in defence budget, saying that strong defence was essential for economic independence.
"There can be no compromise on defence. This is a matter of country's sovereignty. The government can enhance defence budget in case of urgency," he told the Senate after treasury and opposition benches concluded debate on Finance Bill 2004-05 and annual budget statement.
Chairman of standing committee on finance senator Ahmad Ali presented recommendations on the budget to the house. The recommendations in the finance bill called for General Sales Tax rationalisation at 12 percent in future by expanding the tax net.
The house also demanded the deletion of Section 40-A of the Sales Tax Act, 1990, which permits search without warrant.
The finance minister said that growth figures in the budget were absolutely accurate.
"There is absolutely no fudging in statistics given in the budget. Everybody in this house and outside is at liberty to check the numbers from sources," he said.
The Federal Bureau of Statistics (FBS) and the National Accounts Committee (NAC) are responsible for ascertaining the figures. These are the two bodies, which were responsible for the same in the past as well, he said.
All the previous budgets were made on the figures ascertained by the same bodies. To doubt them will be unfair, he said.
He said that the FBS was being turned into an independent authority in order to make the process of ascertaining figures more transparent.
While explaining various steps being taken in this budget after higher than targeted growth, the finance minister assured the house that the finance ministry would seriously consider the Senate recommendations.
The finance minister referred to various challenges and said the government would remain focus on improving implementation, maintaining the present growth rate, building the country's image and improving the quality of governance.
Limit of taxable income may be raised from Rs80,000 to Rs120,000, allowing a minimum of Rs10,000 monthly tax-free income to individuals.
The pay and pension committee may consider an increase of 20 percent for BPS 1-16 and 12.5 percent for BPS-17 and above.
The Senate recommended that the duty on computer parts should be zero percent while on the finished products, the duty should be 5 percent.
The pay and pension committee should look into the proposal of giving ad hoc dearness allowance for government servants who retired prior to 1994, and those who retired after 1994 at the rate of 25 percent and 15 percent, respectively.
The price reduction of DAP fertiliser should also be extended to all kinds of fertiliser so as to benefit farmers.
The Senate recommends that the Central Bureau of Revenue (CBR) should remove the anomaly in duty and tax pertaining to cosmetics. In view of the fact that provinces are burdened with loans, the committee of the finance ministry, looking into this matter, may tie the interest rate paid by the provinces to the weighted average interest rate.
Accordingly, relief will be given to provinces with provision to liquidate their loans from other sources.
The Senate noted the increase in the budget for education sector. However, it was recommended that in future the allocation for this sector should be, at least, 2 percent of the GDP.
The Parliament should be taken into confidence about foreign loans and its mechanism be presented to the finance committee of both the Houses, the Upper House demanded.
It was recommended that austerity measures should be adopted in respect of government advertisements depicting their achievements to save valuable funds.
The amount allocated for the PSDP should be disbursed at least on quarterly basis, if required for the project.
The sales tax or any other tax levied on motorcycles and bicycles should be abolished.
The rate of interest on agriculture loans, which are timely paid, should be reduced to 8 percent in general and 7 percent who make prompt repayment. The exemption from customs duty should be extended to the import of diagnostic kits, especially for Hepatitis B, C and HIV.
As the sixth National Finance Commission award has not yet been announced, and the Balochistan Government is under debt of Rs 4 billion of the State Bank of Pakistan, and new the budget has increased salaries of government employees, the provincial government is facing difficulties under the fifth NFC award, the committee recommended that this matter be decided by the NFC judiciously.
The budget-making process should be thoroughly reviewed to ensure greater and effective participation in it of both the Houses of Parliament.
The proposed budgetary allocation of Rs 652 million should be for foreign faculty hiring including Pakistani faculty working abroad.
Leader of the house Waseem Sajjad appreciated the active participation of opposition members in the committee's deliberations.
"It is the co-operation of the opposition benches that ensured the 'unanimous' recommendations.
"Treasury and opposition benches have done an excellent job by bringing 'unprecedented' unanimous recommendations to the Finance Bill and budget statement," said leader of the house as he paid tributes to the present government for presenting a budget with a future vision.
"It is quite unfortunate that the Senate is debating an unconstitutional budget," remarked Senator Sanaullah Baloch. He said the budget without the finalisation of the NFC award was yet another 'unconstitutional' step taken by the government.
He warned the central government that if it did not stop stepmotherly treatment with smaller provinces, the latter would be compelled to prefer independence than the denied provincial autonomy.
Sana's remarks irked treasury benches and some members strongly protested against the assertion and termed them as 'anti-state'.
The chair warned the Balochistan nationalist leader to remain in the context of the budget.
Senators Abbas Kumeli, Anwar Baig, Amanullah Kanrani, Sardar Mehtab Abbasi, Gulshan Saeed, Waqar, Sahibzada Khalid Jan, Dr Said, Khurshid Barocha and others took part in the budget debate before the MMA and Democratic Alliance senators staged a walk out in protest against the killing of PPP leader, Munawar Suharwardi, in Karachi.
Meanwhile, some senators objected the PTV coverage of the Senate proceedings. However, Information Minister Sheikh Rashid Ahmad assured the house that due action would be taken.
Taking serious notice of rising theft cases in the parliament lodges, Commander Khalil ruled that law-enforcement agencies must ensure their writ to protect life and property of legislators.