KARACHI: The Sindh government on Saturday proposed a deficit-budget outlay of Rs2,247.581 billion with a deficit of Rs37.795 billion for the FY2024.
It also increased the salaries of public employees by 35 percent for grades 1 to 16 and by 30 percent for grades 17 and up as well as raising pensions by 17.5 percent.
The provincial budget was proposed by Murad Ali Shah, the Chief Minister of Sindh, and Minister of Finance. It was his 12th budget address, and it was delivered to the legislature without any commotion in the house.
During the budget speech, Murad announced a minimum wage of Rs33,750 against Rs25,000 minimum wage, which is also a 35 percent raise. Provincial development expenditure has been proposed at Rs700.103 billion against Rs406.322 billion revised estimates for 2022-23.
Total receipts of the province have been projected at Rs2,209.785 billion against Rs1,738.784 billion revised estimates of 2023-24.
Murad Ali Shah, in his speech, said Sindh recorded unprecedented development during the last five years despite natural disasters of Covid and floods, which imposed an additional burden of Rs100 billion.
He said Sindh carried the maximum burden in the country for both Covid and floods and faced disproportionate devastation in 2022 with 1,000 people dying and around 8,000 injured, significantly affecting houses, transport, agriculture, irrigation and communication infrastructure.
“More than 4.4 million acres of agricultural land were destroyed and irrigation and flood protection systems were damaged. However, the Sindh government’s aggressive response to the natural calamity reduced the impact of the destruction.”
He said it was unfortunate that people in Sindh have to endure a fallout of ever-highest inflation of around 40 percent with a negligible anticipated growth rate of 2 percent for the next financial year, while fuel and energy prices have also risen up to 50 percent.
Revised estimates for provincial expenditures have been proposed to be Rs1.765 trillion for year 2022-23 as against the budget estimates of Rs1.713 trillion in financial year 2022-23. It includes current revenue, capital and development expenditures. Revised estimates for federal transfers have been proposed to be Rs1.080 trillion as compared to budget estimates Rs1.055 trillion for financial year 2022-23, while revised estimates for year 2022-23 for provincial revenues have been proposed to be Rs358.290 billion against the budgeted amount of Rs374.5 billion for the current financial year.
The budget outlay of provincial expenditures for the year 2023-24 is Rs2.247 trillion, which marks a 31 percent increase over budget estimates Rs1.713 trillion in the current year 2022-23.
Budget estimates of FY2023-24 for current revenue expenditure (CRE) have been pitched at Rs1.411 trillion, being 17.65 percent higher than budget estimates of Rs1.199 trillion for the year 2022-23. Budget estimates for current capital expenditure have been proposed at Rs136.256 billion, showing an increase of 150 percent over budget estimates of Rs54.481 billion for the year 2022-23. Shah said this marked increase may be linked with excessive repayment of interest amount due to a hike in the forex exchange rate from PKR186 to PKR300 per USD, raising the expenditure disproportionately.
Budget estimates for the year 2023-24 for provincial development expenditure stand at Rs700.103 billion against the budget estimates Rs459.657 billion this year. This includes Rs30 billion earmarked for district ADP.
The chief minister said that the budget estimates for federal transfers have been set at Rs1.353 trillion for the financial year 2023-24, including Rs1.255 trillion for divisible pool components and Rs64.424 billion for straight transfer components. The estimates show an increase of 27 percent over budget estimates of Rs1.055 trillion in the current financial year 2022-23.
Murad said they proposed budget estimates of Rs469.9 billion for tax revenue for the financial year 2023-24. Next year’s collection target for Sindh Sales Tax on services has been set at Rs235.0 billion against Rs180.0 billion for the year 2022-23. Likewise, the revenue collection target for levies under excise & taxation is Rs143.27 billion, and for levies under the Board of Revenue has been set at Rs55.218 billion.
Budget estimates for non-tax revenue have been proposed at Rs32.0 billion for the next financial year 2023-24. Other major components of annual receipts are the grants relating to Foreign Project Assistance, Federal PSDP and budgetary support allocations.
The chief minister said that under the unprecedented rainfall in July and August 2022, Sindh was the most affected province with 70 percent of the land submerged and over 12.4 million people affected.
Federal Ministry of Planning and Development, along with the provincial Planning and Development Department and line departments, coordinated effectively to undertake the ‘Post-Disaster Needs Assessment’ to quantify the damage and losses that were estimated to be more than $20 billion for Sindh, constituting about 70 percent of the country’s damage and losses.
The Sindh government worked on developing its own ‘Strategic Action Plan’ for floods response, aligned with the contours of the national 4R (Resilient, Recovery, Rehabilitation, and Reconstruction) framework, which assessed the financial need of the province at about US$11.6 billion.
“Even though we reoriented about Rs87 billion of the provincial ADP towards flood rehabilitation, the substantial financial gap in meeting the reconstruction needs remained,” he said.
Within record time, the government of Sindh worked with development partners, especially the World Bank and Asian Development Bank, in conceiving projects of over US$ 2 billion for post-flood recovery, rehabilitation, and reconstruction, he added.
Budget estimates for development expenditure for financial year 2023-24 have been proposed to be Rs689.603 billion. It includes Rs380.5 billion for provincial ADP and Rs30.0 billion for district ADP, Rs266.691 billion for foreign projects assistance and Rs22.912 billion for federal PSDP schemes under execution of Sindh government.
The provincial development portfolio for year 2023-24 comprises 5,248 schemes containing 3,311 ongoing schemes with a provision of Rs291.727 billion and 1,937 new schemes with a provision of Rs88.273 billion.
Murad Ali Shah said they have earmarked an amount of Rs312.245 billion for the education sector in budget estimates for FY2023-24, presenting a 7 percent increase over the last year’s budget estimates Rs292.47 billion.
Budget of the Sindh Education Foundation has been increased to Rs15.6 billion from Rs13.299 billion, he added. Budget estimates 2023-24 for health services have been proposed to be Rs214.547 billion, for non-development activities against the budget estimates of Rs196.454 billion for financial year 2022-23.
A grant of Rs15.316 billion has been kept for Sindh Institute of Urology & Transplantation (SIUT), Karachi, with an increase of Rs5 billion over last year’s allocation.
A provision of Rs6 billion has been kept for Pir Abdul Qadir Shah Jeelani Institute of Medical Sciences, Gambat.
The grant of Indus Hospital Karachi has been enhanced from Rs2.5 billion to Rs4.0 billion in the next financial year 2023-24. The grant for the expansion of Indus Hospital Karachi has been enhanced from Rs1.0 billion to Rs4.0 billion in the next financial year 2023-24.
Budget estimates for year 2023-24 for the advancement of transport and mass transit system has been proposed to be Rs13.4 billion with a 92 percent increase over the budget amount of Rs6.9 billion this year.
Shah said the Sindh government is committed to providing safe and modern transport facilities at an affordable price to all citizens. “In line with this, we have provided funds of Rs6.1 billion for the Sindh Intra District Peoples Bus service this year.”
He said the BRT project in Karachi is being implemented at a cost of Rs2.36 billion, adding that the corridor is 3.88 kilometers in length and will carry 50,000 passengers per day.
He said a provision of Rs500 million have been kept for Benazir Women Agricultural Workers Programme. This programme will improve the agricultural output and living standards of rural women associated with the agricultural field.
He said the Sindh government has carefully prioritised the allocation of funds of Rs143.568 billion for the next financial year 2023-24 with a 15 percent increase over the last year’s allocation of Rs124.87 billion.
Shah said Sindh has one of the largest irrigation systems in the country, adding that it faced colossal losses in the last year’s rain and floods, which now demands extra funding in the next financial year. Therefore, a significant amount of Rs25.703 billion has been kept in budget estimates for FY 2023-24.
He said the Sindh government is providing 100 units free electricity as Thar subsidy to 4,689 domestic consumers of Taluka Islamkot, district Tharparkar, where 150 MW solar power project under IPP mode is likely to be completed in June 2023.
Shah also said that the IT department of the Sindh government has signed an MoU with Tech valley and Google Pakistan for offering various training courses to contribute to human capital development in areas of technology sector.
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