Budget 2016-17 Roundup: Telecom, Technology and Education

Federal Budget 2016-17 is abuzz with promising aspects for higher education, telecom and information technology sector. Finance Minister, Ishaq Dar presented the Federal Budget of Rs. 4.4 trillion in National Assembly for the fiscal year 2016-17 this Friday. In almost a decade, Pakistan has touched the highest economic growth rate of 4.7% and aims at achieveing more in the coming fiscal year. Here is a round up addressing key budget breakdown for IT, telecom and education.

Telecom & Information Technology

Public Sector Development Program has been allocated Rs. 1.10 billion for ongoing schemes and launching new projects for Telecom and Information Technology. Out of this Rs. 938 million will come from Federal Budget and Rs. 171 million will come through foreign aid. Rs. 834.02 million will be utilized to complete on going projects, whilst Rs. 90 million will be invested in three new projects to be launched in the coming fiscal year. The major budget breakdown for PSDP is as follows:

1. Rs. 230 million for Pak-China Fiber Optic Cable
2. Rs. 50 million for Pakistan Software Export Board for enhancing IT Export
3. Rs. 10 million for replacement of GSM network in Gilgit Baltistan and Azad Jammu Kashmir
4. Rs. 50 million for GSM coverage on Karakoram Highway
5. Rs. 151. 23 million for technology parks in Islamabad
6. Rs. 1 billion for establishing computer labs under Pakistan Baitul Maal’s Women Empowerment Centers Prime Minister’s ICT Scholarship and Prime Minister’s National ICT Internship Programme

IT and Telecom Ministry comes under the umbrella of Transport & Communication. For this head, Rs. 260 billion has been allocated. It poses a real challenge how this amount will be divided amongst the sub-heads.

Taxes on mobile phones and laptops

According to the Federal Budget, the Government has increased taxes on mobile phones yet again after doubling them just last year. Consumers now have to pay up to Rs. 1500 for mobile phones. The tax will be of Rs. 300, Rs. 1000 and Rs. 1500 according to the feature set.

However, Ishaq Dar has announced that sales tax on import of laptops may be exempted facilitate the growth of Information Technology sector.

Broadband Expansion

Ishaq Dar revealed that broadband projects in Souther Telecom Region will provide coverage to over 56,000 new subscribers in the under served areas. Subsidy of Rs. 482.5 million will be provided to establish projects under 125 Educational Broadband Centers and Community Broadband Centers.

TAX EXEMPTION ON I.T. EXPORT

Tax exemption has been proposed to be extended for export of IT services and products until June 2019. The IT companies taking relaxation through this exemption shall have to remit 80% of their revenues through banking channels to Pakistan whilst keeping 20% of the revenues outside of country for their financial needs.

Education

Education gets the highest budget ever in the history of Pakistan. With 11% higher than last year, Rs. 84 billion has been assigned for education. Out of this budget, a major chunk of Rs. 79.5 billion has been allocated for higher education and Higher Education Commission will be assigned Rs. 5.4 billion to introduce new projects and Rs. 16.05 billion for on-going projects. The major HEC budget breakdown is:

1. Rs. 300 million for Ph.D Scholarship Program under Pak-US Knowledge Corridor Phase 1
2. Rs 900 million would be utilized for Indigenous PhD fellowship for 5000 scholars HEC Phase-2
3. Rs. 500 million for Fulbright Scholarships Support Program of HEC-USAID Phase 2
4. Rs. 105 million for students of FATA and Balochistan
5. Rs. 297.81 for strengthening and upgrading universities in under developed areas
6. Rs. 70 million upgrading Federal Government College for Women F-7/2 to Federal Women University
7. Rs. 200 million for Women University Campuses at Pashin and Khuzdar
8. Rs. 250 million for establishment of FATA University
9. Rs. 350 million for establishment of University of Loralai
10. Rs. 50 million for establishment of University of Sibi

Further breakdown of education budget for different level of education and their services is:

1. Rs 8.19 billion for Pre-Primary & Primary Education Affairs
2. Rs 10 billion for Secondary Education Affairs & Services
3. Rs 63.59 billion for Tertiary Education Affairs and Services
4. Rs 1.16 billion for administration