KARACHI: Sindh government on Friday proposed a deficit-free budget of Rs1.218 trillion for the next fiscal year of 2019/20, betting on steady growth in revenue.
Sindh Chief Minister Murad Ali Shah presented the annual budget proposals amid uproar from the opposition members in the provincial assembly. The opposition lawmakers chanted slogans against the provincial government ruled by Pakistan Peoples Party.
“Our own provincial receipts are growing steadily and provincial revenue targets have been increased to Rs355.4 billion for the next financial year from Rs243.082 billion,” Shah said.
Total receipts of the province are estimated at Rs1.218 trillion against estimated expenditures of Rs1.218 trillion. The government revised up expenditures for the outgoing fiscal year to Rs1.144 trillion from Rs956.779 billion. The province is expected to receive Rs835.375 billion as federal transfers, accounting for 74 percent of the total provincial receipts.
The development portfolio for the next fiscal year is Rs283.5 billion, including Rs228 billion on account of provincial and district annual development program. The government proposed a 15 percent increase in salaries of its employees as adhoc relief allowance and pensioners and 3,000 new job openings in the police department.
The chief minister expressed concerns over 3.5 percent allocation in the federal public sector development program (PSDP) for Sindh.
Shah said overall size of the federal PSDP is Rs951 billion with Rs127 billion of foreign project assistance. “In the above portfolio, Sindh-specific schemes are 50 – ongoing and new – with an allocation of Rs33.7 billion,” he said in a budget speech. “Further, total schemes included in the federal PSDP 2019/20, which are executed by the government of Sindh, are 12 having an allocation of Rs4.89 billion as compared to Rs15 billion in 2018/19 and Rs27.3 billion in 2017-18.”
In March, Prime Minister Imran Khan announced a package of Rs162 billion for Karachi. “(However), there are only 19 Karachi-based schemes with a total allocation of Rs12.1 billion,” Shah said. “The new schemes for Karachi are only six with an allocation of Rs3.9 billion.” The chief minister said the federal government ‘deliberately’ put the welfare of the people of Pakistan at risk “through their sheer incompetence and unwillingness to perform”. “They have failed consistently to reach their tax collection targets. With a record shortfall of almost 447 billion in 11 months, FBR (Federal Board of Revenue) performance reached an all-time low during the last one year,” he said. “Consequently, Sindh has been deprived of its due share and we are enduring a shortfall of Rs117.5 billion owing entirely to the federal government. The federal government’s clear vendetta against Sindh and its people cannot be denied.”
The government set Rs145 billion as sales tax collection target for the next fiscal year as it grew to Rs100 billion in 2017/18 from Rs16.6 billion in 2010/11 when the 18th amendment into the constitution devolved the collection of sales tax on services to provinces. The provincial government proposed the centre to also collect sales tax on goods on its behalf. “We believe that once devolved the returns from sales tax on goods can be maximised as it has been done in case of sales tax on services,” Shah said. The chief minister rejected the revised federal transfer estimate of Rs631.543 billion for the fiscal year of 2018/19.
“In the last 11 months, Sindh has received only Rs492.135 billion on account of federal transfers and it is anticipated that by the end of financial year, the shortfall will be Rs117.527 billion,” he said. The chief minister said the federal government showed no real intent to develop consensus on 9th national finance commission award. “The delay in the announcement of the award is at the expense of rights of provinces.” The provincial revenue for the current fiscal year is estimated at Rs940.777 billion from the budgetary estimate of Rs1.123 trillion.
“Many development schemes that could have been completed have been delayed due to non-availability of funds,” Shah said. The provincial government increased allocation for non-development expenditures for education sector to Rs178.618 billion in FY2020 from Rs170.832 in FY2019. Rs15.15 billion has been earmarked for the sector in the annual development program FY2020. There was no change in allocation for the health sector as it remained at Rs13.50 billion.