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Thursday March 28, 2024

No new tax levied: Punjab presents Rs2.65tr budget

This was the fourth budget presented on behalf of the Pakistan Tehreek-e-Insaf (PTI) government. The minister had presented the first budget for nine months in October 2018.

By Mansoor Ahmad
June 15, 2021

LAHORE: Punjab Finance Minister Makhdoom Hashim Jawan Bakht presented Rs2683 billion budget for financial year 2021-22, with a development outlay of Rs560 billion. This was the fourth budget presented on behalf of the Pakistan Tehreek-e-Insaf (PTI) government. The minister had presented the first budget for nine months in October 2018.

In the annual budget for FY 2021-22, no new tax has been levied. Out of Rs2653 billion resources, envisaged in the budget Rs1683 billion will come from federal divisible pool, Rs272 billion is expected to be generated from provincial taxes, Rs132 billion is expected to be provincial non-tax revenue, Rs25 billion would be generated through innovative financing, Rs119 billion would come capital receipts a/c 1 and Rs420 billion from capital receipt a/c II.

There were no surprises. The pay and pension has been increased by 10 per cent in line with the increase announced by the federal government. The minimum wage has similarly been increased to Rs20,000 per month. The development budget of Rs560 billion is the highest development exercise ever taken in the province.

All the expected revenue resources have been utilised in the budget; only Rs125 billion has been shown as surplus. The problem with this strategy is that in case of major shortfall in federal transfers, the development budget is curtailed. The development budget should be taken seriously as in case of absence of funds the development projects are delayed. The delay increases the cost of the project and entire planning on development is disturbed. It would be more appropriate if the economic planners of the government prioritise the development projects. These projects should be provided full financing. The work on small projects should be initiated in the last four months of the financial year when the provincial government has a fair idea about resources it would have at its disposal by the end of the year.

On the expenditure side, general revenue expenditure is Rs1427.9b, out of which Rs835b would go to general public service, Rs189.7b will be utilised for public order and safety affairs, Rs123.4b for economic affairs, Rs175.7b for health, and Rs77.2 for education.

In the current financial year, the PRA exceeded its collection target by Rs16 billion to Rs141 billion. Excise and taxation missed target of property tax, motor vehicle tax, and provincial excise.

In view of health issues, created by Covid-19, the Punjab government increased the health budget to Rs369 billion. It includes provision of health insurance to the total population of the province. The health insurance project would be completed in six months for which Rs60 billion have been allotted this year.

In the education sector, the Punjab government is upgrading 577 primary and elementary schools in 22 districts to middle and high schools. Education budget would be Rs442 billion.

The Punjab government has established a separate secretariat for south Punjab. To facilitate the people of south Punjab, 55 administrative and 11 financial powers have been transferred to that secretariat. People of south Punjab will now get 32 per cent quota in government services. The share of the development budget for south Punjab would be Rs189 billion.

Development programmes worth Rs295 billion would be utilised in 36 districts of the province to ensure better services, where required. An amount of Rs28.3 billion has been earmarked for uplift of infrastructure in Lahore including some mega projects. In view of water shortages in Lahore, the government is establishing a surface water treatment plant for which Rs15 million have been earmarked this year. Health and education will get Rs205.5 billion in this years’ development programme.

The Board of Revenue will maintain 1 per cent stamp duty this year. This concession would encourage new investment in the construction sector. The Punjab government is also lowering the rate of sales tax on 10 more services in Punjab from 16 to 5 per cent. This is in addition to the similar reduction granted to 25 sectors in the current year.

Women development and social welfare budget has been increased by 62 per cent to Rs30 billion, Tourism Development budget has been increased by 231 per cent, Agriculture and Food Security was allocated Rs32 billion, basic education budget increased by 23 per cent to Rs35 billion, and E-governance got Rs5 billion.