LAHORE, June 23: Punjab finance minister Tariq Hamid will present on Monday a tax-free, surplus provincial budget for the fiscal year 2002-03 with a total outlay of around Rs130 billion that is expected to include an annual development programme (ADP) of Rs20 billion or more.

The proposed outlay of the provincial budget is about nine per cent higher than the budgetary estimates of Rs120 billion for the outgoing fiscal year of 2001-02 and some 15 per cent greater than the revised estimates of Rs112 billion, according to a person who is involved in the formulation of the budgetary proposals.

He told this reporter here on Sunday that the proposed allocation for education will be upwards of Rs30 billion for law & order, over Rs10 billion, for health more than Rs8 billion and for irrigation around Rs5 billion.

Besides, he added, the government plans to spend Rs300 million on the establishment and upgradation of higher education institutions which include the School of Mathematical Sciences, the School of Biological Sciences, the University of Veterinary Sciences and the Al-Khwarzami Institute of Computer Sciences.

The source said though no new tax is being levied, the budget proposes upward “rationalization” of certain taxes to raise tax receipts. However, he added, the “increase in the existing taxes would be marginal” and is subject to approval of the provincial cabinet which is scheduled to meet in the morning to consider the budgetary proposals and approve them. The current budget for the next financial year is estimated to be considerably higher than the current year. The increase in salaries and pensions of the government employees as announced last year is said to be the main cause for increase in the non-development expenditure next year.

Though the source said the development budget would be around Rs20 billion, a statement issued on behalf of Governor Khalid Maqbool last week claimed that its size would be Rs24 billion. The statement had also stated that half of the development budget would be given to the 34 districts through the provincial finance commission (PFC) award which is yet to be announced.

The development budget for the outgoing year was estimated to be Rs20 billion. However, the revised estimates put the figure somewhere close to Rs16 to 17 billion. “We hope that 80 per cent or more of the entire amount allocated for development this year would be utilized,” the source said.

Punjab will finance its ADP from its own resources as the federal government has refused to provide any money for it to the provinces. The federal government wants the provinces to finance their development expenditure through the funds to be transferred to them from the general sales tax (GST) collection to compensate them for the loss of income due to withdrawal of octroi and Zilla taxes in 1997.

Some Rs32 billion will be transferred to the provinces outside the NFC award from the GST collection. Punjab hopes to receive Rs18 billion out of this amount. Besides, it is promised federal transfers of Rs97.44 billion from the divisible pool under the 1997 NFC award during the next year as against the budgetary estimates of Rs96.78 billion and actual transfers of Rs87.9 billion during the current financial year.

The source claimed that the share of the districts from the revenue budget would be close to 36 per cent of the total current budget and about 4 to 6 per cent higher than last year’s Rs34 billion. The districts, the source said, stand to receive 44 to 45 per cent of the entire revenue and development budget for the next year through the PFC award. They insisted that it was “quite high a percentage because it does not include the expenditure on pensions, debt servicing and subsidies.”