Rs24 billion uplift plan ‘unfunded segment’: Sindh budget briefing
By Sabihuddin Ghausi
KARACHI, June 11: Sindh Finance Minister Syed Sardar Ahmad has contended that after the suspension of cash development loans facility from the federal government, the development programme in the Sindh budget has become an “unfunded segment”.
“We generate resources from within our budget by way of savings, seek grants and utilize unused funds to finance the development programme of the budget,” the minister told a post-budget press conference on Saturday. He stressed that the Rs24 billion public sector development programme for the fiscal year 2005-06 was an “unfunded segment” but certainly not a deficit.
Shoib Bokhari, Sindh Planning and Development Minister, informed reporters that more than 99 per cent of the Rs18 billion development programme for the current fiscal year had been released and he was confident that a substantial amount had been utilized.
The planning minister was confident of taking up the implementation of Rs24 billion in 2005-06 without much problem.
Sardar Ahmad asserted that deficit in the revenue budget for the next year was about Rs6 billion and there was a gap of about Rs3 billion in the capital budget. He was confident of bridging the revenue shortfall of Rs6 billion and also generating enough funds to finance the Rs24 billion development programme.
The finance minister refused to accept that revenue expenditure was inflated to squeeze out savings to finance the development budget, but conceded that for the last eight years there was a provision of 22,000 posts in the government. Resource allocations provided for these 22,000 posts are used for financing the development.
He said that there were many pending claims of Sindh on the federal government and these would provide for some funds to partly finance the development outlay in the coming year.
“We have provided Rs18 billion development programme in the fiscal year 2004-05 and that has almost been fully financed,” he made his point. There was no answer and explanation when told that the budget should disclose in full the sources of money and the avenues of spending.
Responding to a question as to why the federal government had to withdraw the collection of sales tax on laundries, beauty parlours and marriage halls, Mr Ahmad said that sales tax on services was an exclusive provincial domain under the 1973 Constitution.
In the year 2002, the federal government had started collecting sales tax on services under an ordinance. These taxes were collected on behalf of the provinces and were disbursed on the basis of population. “These taxes should have been given on actual collection basis after deducting normal charges,” he said while pointing out that Sindh suffered losses on this count too.
In reply to a query on Sindh’s debt liability, the finance minister said that even after paying Rs110.10 billion on account of normal SCARP cash development loans of the federal government, a principal amount of Rs35.75 billion still remained unpaid. “Out of Rs110.20 billion paid to the federal government against an original loan of Rs54 billion, Rs92.66 billion or 84 per cent was towards the interest payment only.”
The federal government charges 12 to 18 per cent interest on loans given to the provinces. He said that when banks were offering loans at a very low rate, Sindh requested the federal government to allow it swap low rated loans with the existing stock. “But we were not allowed,” he regretted.
Nonetheless, the Sindh government took advantage of World Bank and Asian Development Bank loans and cleared Rs6.20 billion worth of loans in the last two years, thus saving Rs1 billion every year.
Answering another question, Syed Sardar said that there had been no respite in the influx of people from other provinces and countries in Sindh which was proving costly.
Many of these settlers in Sindh are registered as voters in Punjab and NWFP. Punjab and NWFP get the benefit of population ratio in the share of federal pool, but Sindh suffers. “We demanded to raise our population by at least seven per cent from the existing 23.7 per cent,” he informed the participants.
The Sindh finance minister was angry on the continuous desk thumping and noise making by opposition members on Friday when he was reading out his budget speech. “A protest token walkout is alright but there is no reason to create a noisy scene in the assembly,” he remarked.
He was also unhappy on the observations made by leader of the opposition Nisar Khurho on the Sindh budget. “He neither heard my budget speech nor read the budget documents, then how come he criticizes the budget,” he said.
Syed Sardar challenged all those who alleged that the budget presentation was “unconstitutional” because there was no award of the National Finance Commission. “Quote me a single article of the constitution that forbids the government to present budget if there is no NFC award,” he said.
He said there was a constitutional provision to constitute an NFC after every five years. He reminded that since 1975 when the first commission gave award there was no NFC award till 1990.
“But it does no mean that there should be no NFC award,” he hastily said and added that Sindh had been demanding a fair and just award and “we stick to our principled stand”.
Mr Nisar Khurho wrote me a letter in April this year that contained budgetary proposals. Since then, the minister said, he invited Mr Khurho several times for a meeting to discuss the budget without getting a proper response. He said the Aurat Foundation organized a seminar on the NFC in which he participated but legislators from both the opposition and treasury benches did not respond much warmly.
Shoib Bokhari spoke of the proposal to outsource medical facilities by offering basic health units and other buildings to the private sector.
