18 June 2004	Friday	29 Rabi-us-Saani 1425

LAHORE, June 17: Punjab Finance Minister Sardar Hasnain Bahadur Dareshek on Thursday presented in the provincial assembly a revenue budget of Rs180.021 billion for 2004-05. It indicates a revenue expenditure of Rs141.884 billion and a gross surplus of Rs38.14 billion.

He also announced a record annual development programme (ADP) of Rs43.440 billion which will be financed from the net revenue surplus (Rs34.655 billion) and foreign assistance of Rs8.785 billion.

The development outlay for the next year is more than double the development allocation of Rs21.59 billion for 2002-03. The percentage of the development budget in relation to the current expenditure is 30.6, compared to the budget estimates of 23.6 per cent, and revised estimates of 30 per cent for the outgoing year.

Though no new tax has been proposed, the minister presented a finance bill that reshuffles several existing taxes. Mr Dareshek describes at as a 'relief budget'. Finance Secretary Salman Siddique told reporters that changes in tax rates would result in an overall negative impact of Rs114 million on tax receipts.

Compared to current year's estimates of tax receipts of Rs15.773 billion and revised estimates of Rs19.592 billion, the tax revenue for the next year is estimated at Rs20.124 billion.

Mr Dareshek informed the house that the provincial cabinet had rejected a proposal to levy Rs200 per annum on tobacco vendors in its meeting held early in the morning to approve budget proposals because the government did not want to put any burden on small vendors.

The finance bill, however, extends the scope of professional tax to wholesalers who would be charged Rs1,000 per year. The total volume of the proposed revenue budget for 2004-05 is 16 per cent higher than the revised estimates of Rs155.560 billion for the current fiscal and 20.5 per cent greater than the budgetary estimates of Rs149.346 billion.

The provincial revenue receipts for the next year include transfers from the divisible pool (Rs115.225 billion), straight transfers of Rs6.698 billion, other federal transfers of Rs22.300 billion, provincial tax receipts of Rs20.124 billion and non-tax receipts of Rs15.674 billion.

The minister said the tax revenue receipts this year had shown an increase of 29 per cent and the non-tax receipts had gone up by 47 per cent than the target. The projected revenue expenditure is 8.4 per cent more than the revised estimates of Rs130.918 billion for the current year and 9.8 per cent higher than the budget estimates of Rs129.195 billion.

The revenue surplus of Rs38.136 billion indicated for 2004-05 is 89 per cent more than the current year's budget estimates of Rs20.151 billion and 55 per cent higher than the revised estimates of Rs24.642 billion.

The revenue expenditures for the coming year include Rs14.334 billion on general administration, Rs18.843 billion on law and order, Rs2.311 billion on community services, Rs14 billion on social services, Rs9.693 billion on economic services, Rs1.200 billion on subsidies and Rs81.491 billion on debt servicing, investible funds and grants.

The government's (current and development combined) investment in key strategic sectors include Rs20 billion on access to justice and law and order, Rs8.3 billion on education sector reforms, Rs400 million on special education, Rs5.5 billion on health sector reforms, Rs3 billion on water supply and sanitation, Rs8 billion on communications and roads, Rs5.3 billion on irrigation and Rs3.78 billion on agriculture and livestock.

The province's current capital account projections for the next year show a net deficit of Rs5.581 billion with receipts standing at Rs51.036 billion and expenditure at Rs56.617 billion.

The revised estimates of capital account for the outgoing year indicate a net deficit of Rs5.732 billion against an expected net surplus of Rs1.859 billion projected in the budget estimates.

The public account estimates a net surplus of Rs2.1 billion next year with receipts standing at Rs53.691 billion and disbursements at Rs51.418 billion. For the outgoing year, the net public account surplus had been calculated at Rs100 million while the revised estimates put it at Rs4.182 billion.

The finance minister claimed that the government was pursuing an economic strategy that would enable it to achieve an eight per cent growth rate and raise the per capita income to $2,000 by 2020.

"In order to achieve this target, the government will focus on four pillars of economy - industry, agriculture, services (including housing and construction and tourism and resorts), and natural resources.

In this regard, the government intends to involve the private sector in its endeavours to boost the economy through public-private partnership programmes." The minister said the government also intended to generate one million jobs in the province each year.

Some 15 per cent jobs are to be created by the government through development programmes or by its various departments and the rest by the private sector. He said the private sector would be required to invest in infrastructure development programmes.

A salient feature of the budget is the allocation of Rs9 billion in the capital account for encouraging public-private partnerships through 'equity financing' for completing development projects like Lahore Ring Road, New Murree scheme, Jallo Theme Park, etc. Such projects would be carried out by setting up private companies and encouraging the BOT system.

The districts have been allocated Rs68 billion as compared to the outgoing year's Rs64 billion. The minister said the districts would continue to receive a grant of Rs5 billion through next year. "We'll give districts Rs500 million over the next three years to support the Decentralization Support Programme," he said.

The districts will get Rs9 billion from the development budget. It is pertinent to recall that the districts have been getting the same amount for their development projects from the provincial ADP since 2003-04.

Mr Dareshek said the government had already set up a Rs6 billion Punjab Municipal Development Fund for providing clean water and drainage facilities to TMAs. In addition, he said, the districts would receive Rs7 billion under the Southern Punjab Basic Urban Services Project for providing basic facilities to the people of southern Punjab.