# *Detailed SUMMARY of the article "Ambitious goals" by Editorial, Published in Dawn on June 11th, 2025:* The article analyzes *Pakistan*'s budget for the next *financial year*, announced on *Tuesday*, which aims to deepen *fiscal consolidation* to ensure a successful second review of the *$7 billion IMF programme* in *September*. The *consolidated national fiscal deficit* target has been significantly reduced to *3.9% of GDP* from the original *5.9%*. The *provinces*, previously criticized for adding to *federal fiscal woes* due to increased shares under the *NFC award*, will now contribute a *cash surplus of nearly Rs1.5 trillion*, up *50%* from the *Rs1 trillion* required this year to control the *national deficit*. The government has partially addressed *income tax relief* demands from *salaried classes*, with fiscal space provided by *Rs1 trillion savings* in *debt payments* due to reduced *domestic interest rates* over the past year. These savings also enabled *tax concessions* for powerful *real estate lobbies*. However, the budget disappoints those expecting *deeper structural reforms* for *sustainable economic growth* following the *economic stability* achieved over the last *year and a half*. The budget does include positive elements like initiating long-standing *tariff reforms* to end protections for *rent-seeking industries* over the next *five years*. It seeks to bring *non-filers* into the tax net through restrictions on *securities purchases* above certain thresholds and *auto purchases above 850cc*. The budget also establishes groundwork for phased removal of *sales tax exemptions* for industries in *ex-FATA/PATA* to create uniform playing fields. Despite the *finance minister* acknowledging *corporate sector hardships*, the budget fails to address *inequitable corporate tax rates*, a major obstacle to *investment* and *export growth*. While the controversial *super tax* has been marginally reduced, measures to enhance *competitiveness* and attract *foreign investment* are absent. The unfair *tax policies* burden *industry*, which constitutes *18%* of the economy but contributes nearly *60%* to overall *tax revenues*, causing *large-scale manufacturing* contraction. With the government's *Uraan programme* targeting *$100 billion exports* in *five years*, this goal may remain elusive without increasing *industrial productivity* and attracting *FDI*. Many doubt the government's ability to achieve next year's *4.2% growth target* due to failure in changing the dynamics of a *moribund economy*. # *Easy/Short SUMMARY*: *Pakistan*'s new budget reduces *fiscal deficit* to *3.9% GDP* for successful *$7bn IMF* review. *Provinces* contribute *Rs1.5tr surplus*, up *50%*. *Income tax relief* funded by *Rs1tr debt savings* from lower *interest rates*. Budget lacks *structural reforms* despite *economic stability*. Includes *tariff reforms*, *non-filer restrictions*, and *FATA tax exemption* removal. Fails to address *inequitable corporate taxes* hindering *investment*. *Industry* (*18% economy*) contributes *60% tax revenue* but faces contraction. *$100bn export* target under *Uraan programme* unlikely without *productivity* boost and *FDI*. *4.2% growth* target questionable. # *SOLUTIONS of The Problem*: ## *1. Corporate Tax Reform* Address *inequitable corporate tax rates* to boost *investment* and *export growth*. ## *2. Industrial Productivity Enhancement* Implement measures to increase *industrial productivity* for *manufacturing* sector revival. ## *3. Foreign Investment Attraction* Create policies to attract *FDI* through *competitiveness* improvements and incentives. ## *4. Complete Tariff Reforms* Accelerate *five-year tariff reform* plan to eliminate *rent-seeking industry* protections. ## *5. Tax Base Expansion* Strengthen *non-filer* integration through comprehensive *tax net* expansion strategies. ## *6. Super Tax Elimination* Completely remove controversial *super tax* to reduce corporate burden. ## *7. Export Diversification* Develop sector-specific strategies to achieve *$100bn export* target under *Uraan programme*. ## *8. Manufacturing Support* Provide targeted support to reverse *large-scale manufacturing* contraction. ## *9. Structural Economic Reforms* Implement deeper *structural reforms* beyond *fiscal consolidation* for sustainable growth. ## *10. Provincial Fiscal Coordination* Optimize *NFC award* arrangements to balance *federal-provincial* fiscal responsibilities. # *IMPORTANT Facts and Figures Given in the article*: - Budget announced on *Tuesday* for next *financial year*. - *$7 billion IMF programme* second review scheduled for *September*. - *Fiscal deficit* target reduced to *3.9% of GDP* from *5.9%*. - *Provinces* to contribute *Rs1.5 trillion cash surplus*, up *50%* from *Rs1 trillion*. - *Rs1 trillion savings* in *debt payments* due to reduced *domestic interest rates*. - *Tariff reforms* planned over next *five years*. - *Industry* forms *18%* of economy but contributes *60%* to *tax revenues*. - *Uraan programme* targets *$100 billion exports* in *five years*. - Next year's *growth target* set at *4.2%*. # *IMPORTANT Facts and Figures out of the article*: - *Pakistan*'s current *fiscal deficit* was *7.4% of GDP* in *2023* (*IMF*, 2024). - *Manufacturing sector* contributes *12.8%* to *GDP* (*Pakistan Bureau of Statistics*, 2024). - *Tax-to-GDP ratio* in *Pakistan* is *8.6%*, among lowest globally (*World Bank*, 2024). - *FDI inflows* were *$1.86 billion* in *FY2024* (*State Bank of Pakistan*, 2024). - *Large-scale manufacturing* declined *10.2%* in *2023-24* (*PBS*, 2024). - *Real estate sector* contributes *2.1%* to *GDP* (*Economic Survey*, 2024). # *MCQs from the Article*: ### 1. *What is the new fiscal deficit target as percentage of GDP?* A. 5.9% *B. 3.9%* C. 4.2% D. 6.5% ### 2. *How much cash surplus will provinces contribute?* A. Rs1 trillion *B. Rs1.5 trillion* C. Rs2 trillion D. Rs500 billion ### 3. *What percentage of the economy does industry form?* A. 20% *B. 18%* C. 15% D. 25% ### 4. *What is the export target under the Uraan programme?* A. $50 billion *B. $100 billion* C. $75 billion D. $150 billion ### 5. *What is next year's growth target?* A. 3.5% *B. 4.2%* C. 5.0% D. 6.1% # *VOCABULARY*: 1. *Fiscal consolidation* (مالی استحکام) – Government effort to reduce deficits and debt 2. *Consolidated* (مجموعی) – Combined or unified 3. *Deficit* (خسارہ) – Amount by which expenses exceed income 4. *NFC award* (این ایف سی ایوارڈ) – National Finance Commission resource distribution 5. *Surplus* (اضافی) – Excess amount beyond requirements 6. *Salaried classes* (تنخواہ دار طبقے) – Employees receiving fixed salaries 7. *Tariff reforms* (محصولاتی اصلاحات) – Changes in import/export duties 8. *Rent-seeking* (غیر پیداواری منافع) – Gaining wealth without creating value 9. *Non-filers* (غیر دستاویز جمع کنندگان) – Those not filing tax returns 10. *Threshold* (حد) – Minimum level or limit 11. *Exemptions* (استثنیٰ) – Freedom from obligation or liability 12. *Ex-FATA/PATA* (سابق فاٹا/پاٹا) – Former Federally/Provincially Administered Tribal Areas 13. *Inequitable* (غیر منصفانہ) – Unfair or unjust 14. *Super tax* (اضافی ٹیکس) – Additional tax on high earners 15. *Competitiveness* (مسابقت) – Ability to compete effectively 16. *FDI* (ایف ڈی آئی) – Foreign Direct Investment 17. *Contracting* (سکڑنا) – Becoming smaller or declining 18. *Elusive* (مشکل) – Difficult to achieve or catch 19. *Productivity* (پیداواری صلاحیت) – Efficiency in production 20. *Moribund* (مردہ حال) – In decline or stagnant 📢 *Attention Please!* We appreciate your commitment to acquiring knowledge through our summaries. 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Click the link below to join now 🔗 [Dawn Article Summaries](https://cssmcqs.com/dawn-editorials-articles-summary-for-students-pdf-download/) *WhatsApp Channel Link*: [https://whatsapp.com/channel/0029Va7tT3o35fLnJeFbpS2y](https://whatsapp.com/channel/0029Va7tT3o35fLnJeFbpS2y) --- *dawn.com* *Ambitious goals* *Editorial* *3–4 minutes* THE budget for the next financial year, announced on Tuesday, seeks to deepen fiscal consolidation in order to pave the way for a successful second review of the $7bn IMF programme in September. This is apparent from the significant reduction in the consolidated national fiscal deficit target to 3.9pc of GDP from the original target of 5.9pc. The provinces, which have often been criticised for adding to federal fiscal woes because of their increased share under the NFC award, will contribute cash surplus of nearly Rs1.5tr, up 50pc from the Rs1tr they were required to contribute this year to hold down the national deficit. Indeed, the government has partially met the income tax relief demand from the salaried classes, but the fiscal space for this is basically provided by savings of Rs1tr in debt payments due to reduced domestic interest rates over the last year. These savings have also allowed the authorities to give relief to powerful real estate lobbies demanding tax concessions. That said, the budget is disappointing for those who thought the economic stability achieved over the last year and a half would encourage implementation of deeper structural reforms for sustainable economic growth. There is not much in the budget to give hope for such a structural shift. But that does not mean the document is devoid of good points. For example, it sets into motion long-standing tariff reforms that hopefully will end protections to some rent-seeking industries over the next five years. It also seeks to bring non-filers into the net by imposing restrictions, such as on the purchase of securities above a certain threshold, purchase of autos above 850cc, etc. Moreover, it lays the ground for phased removal of sales tax exemptions for industries operating in ex-Fata/Pata to make the playing field even across the country. Though the finance minister spoke of the hardships of the compliant corporate sector, his budget speech fell short of addressing the issue of inequitable corporate tax rates, a major obstacle to investment and export growth. While the controversial super tax has been reduced marginally, steps to enhance competitiveness and attract foreign investment are absent. It is primarily because of unfair tax policies and the burden they put on industry, which forms 18pc of the economy but contributes nearly 60pc to overall tax revenues, that large-scale manufacturing has been contracting. With the government wanting to boost exports to $100bn in five years under its Uraan programme, the goal is likely to remain elusive without increasing industrial productivity and attracting FDI. Many remain sceptical about the government's ability to achieve next year's growth target of 4.2pc, due largely to its failure to change the dynamics of a moribund economy. Stability has returned. Will growth follow suit? *Published in Dawn, June 11th, 2025*