‘Sindh short of Rs70bn due to Centre’s delays, revenue deficit’

According to third financial quarter report of 2015-16, Centre is yet to pay

provincial government Rs60bn, while Sindh has a Rs10bn revenue deficit currently

Karachi

Nine months into the current financial year, the Sindh government faces a shortfall of about Rs70 billion against the estimated expenditures incurred so far.

Out of the total shortfall, Rs60 billion were payable by the federal government, while there was a deficit of about Rs10 billion in the expected revenues of the Sindh government.

This was revealed by Sindh Senior Minister for Finance Syed Murad Ali Shah in the Sindh Assembly session held on Monday during which the performance of the provincial government vis-a-vis three financial quarters came under discussion by the lawmakers.

Though the session was supposed to begin pre-budget discussions and debate on the quarterly reports of the Sindh finance department pertaining to the progress on targets set in the annual budget, it was deferred to Tuesday since the finance department presented its report of the last fiscal quarter —January to March, 2016  — taking all the lawmakers by surprise.

First, the parliamentary leader of Muttahida Quami Movement, Syed Sardar Ahmed, and then an MPA of Pakistan Tehreek-e-Insaf, Samar Ali Khan, requested Deputy Speaker Shehla Raza to delay discussion on the budget by a day so members of the House have time to go through the latest fiscal report they had just gotten their hands on.

The deputy speaker accepted the request of opposition lawmakers. However, finance minister Murad Ali Shah felt that there was no use in delaying the formal announcement of the budget by a day, and went on to brief the House about the salient features of the last financial report distributed by his department so the lawmakers could make more informed debate during the actual discussion the following day.

The Sindh government, he said, had estimated earnings of about Rs726 billion in 2015-2016 out of which it was expecting Rs494 to be paid by the federal government.

So far in three financial quarters, he said, the Sindh government was supposed to receive Rs370 billion from but so far it had received Rs310 billion from the Centre. Hence, the province faced a shortfall of Rs60 billion in the funds it was supposed to receive by the federal government.

However, the finance minister said he was hopeful that the federal government will transfer the pending receipts as its tax collection drive gains momentum and revenue. He said the Centre too faced difficulties when there was a delay in disbursement of promised funds to provinces because if obtained too late the funds lapsed without their being time to spend them.

Meanwhile, he said, Sindh government’s own earnings this fiscal year were estimated to be around Rs124.6 billion out of which Rs 61 billion were supposed to be received as general sales tax on services while Rs63.6 billion as other provincial taxes. In the three fiscal quarters so far, he said, the revenue generated by the provincial government should have been around Rs93 billion, but actually it had been about Rs 83.8 billion, creating a deficit of Rs10 billion.

He said the total expenditure for 2015-2016 was estimated to be around Rs503.3 billion and so far a sum of Rs395.3 billion had been released, while Rs285.2 billion were spent.

Furthermore, said the minister, the value of Sindh government’s Annual Development Program (ADP) was about Rs162 billion out of which district ADPs were worth Rs20 billion. Out of the provincial ADP Rs 88.4 billion had been released out of which the government had spent 61.4 billion on various development works. Out of funds allocated for district ADPs, a total of Rs12.8 billion had so far been released to the district administrations.

The minister advised lawmakers concerned to contact the various departments of the Sindh government to submit their proposals for the next year’s budget, claiming that the Sindh government had again left other province, and even the Federal Board of Revenue behind, in exceeding its tax collection targets.

Kicking off the preliminary discussion on the budget, MQM’s parliamentary leader Syed Sardar Hussain said there should be a balance in the revenue generated and expenditure incurred by the provincial government.

He lamented that Rs110 billion of the development funds released has remained unspent so far. In the current financial year, he updated, a sum of about Rs115 billion had been released to the education department out of which Rs82 billion had so far been spent.

For the health department, he said Rs49 billion were released out of which Rs32 billion have so far been spent. For the home department, Rs64 billion were released out of which Rs 41billion have been spent. Similarly, he said, the prisons department could not spent Rs10 billion released to it even though a large number of jails are overcrowded.

Sardar Ahmed said the performance of the Sindh good department had been dismal and recommended doing away with the department altogether. He said there was an urgent need for looking into the alleged embezzlement and financial bungling in the government’s process of procuring wheat directly from farmers. He advised that the government should stop buying wheat from farmers at low process and instead fix the price to safeguard their economic interests.

Moreover, he said, the Sindh government dues payable to banks had accumulated to be around Rs72 billion with yearly mark-up increasing the amount by about Rs6 billion, owing to the faulty process of buying wheat.

He said it was beyond his comprehension that the provincial government had not been repaying the loan it had borrowed from banks to buy wheat.

Another opposition MPA Samar Ali Khan of PTI said the government should further boost its tax and revenue collection machinery instead of expecting the federal government to fulfil its financial needs every year.

He called for cutting down on non-development expenditures being incurred by various departments to spare maximum funds for development projects.

No political persecution

Meanwhile, finance minister Murad Ali Shah clarified that except for persecuting criminals, the Sindh government was not forcing anyone against the wall.

He stated this in response to a point raised by MQM’s Abdul Rauf Siddiqui who asked the finance minister to inform the House about the funds being allocated for the persecution of his party members and activists.