KARACHI: The Sindh budget for financial year 2014-15 shows a deficit of over Rs14.060 billion, with total receipts projected at Rs672.118b and expenditure at Rs686.179bn.

Although the budget presented by Chief Minister Qaim Ali Shah in the Sindh Assembly on Friday focuses on six priority areas, with law and order, improved service delivery and better quality of life for citizens on top, the annual development plan (ADP) has been slashed by Rs17bn to Rs168bn from the current year’s Rs185bn.

There was no mention in the budget about agriculture tax.

The budget reduced sales tax on services to 15 per cent from 16pc and proposed to extend the levy to cover other services, including technical, engineering, property dealers, fashion designers, rent-a-car, laundries and dry cleaners, private educational institutions, doctors and laboratories.

The rate of stamp duty has been revised and fee proposed on storage and warehouses and transfer of motorcycles and commercial vehicles.

No mention of agriculture tax

Revenue expenditure is estimated at Rs 436.090bn, which is 22pc higher than the current year’s estimate of Rs 355.9bn, and capital expenditure at Rs 34.7bn against this year’s Rs 31.3bn.

The province is expected to receive Rs381.383bn under federal transfers, Rs 82.623bn under straight transfers and Rs10.253bn under a grant to offset losses due to abolition of Octroi Zila Tax.

The province’s own receipts are estimated at Rs125.060bn.

The chief minister, who also holds the portfolio of finance minister, announced a 10pc increase in salary for government servants and 5pc in conveyance allowance for grade 1-15 employees.

The budget proposes an increase in minimum pension by Rs1000 to Rs6000 per month and a 10pc raise in pension for retired government employees.

Mr Shah said that in addition to increasing the wage bill, the major reason for raising the revenue expenditure was to increase non-salary budget of education and health, allocation for payment of electricity dues and inclusion of grants and subsidies for public utilities and universities. The measures are aimed at improving service delivery.

The capital expenditure has been estimated at Rs34.7bn. It was Rs31.3bn for the outgoing fiscal year.

The chief minister said that in order to improve the performance of tax administration and enhance capacity of the government to collect taxes more efficiently, the government had prepared a reforms plan for resource mobilisation. The three-year plan will be implemented from July.

For this purpose, a tax reform unit will be set up in the finance department to maintain linkages with all tax collecting agencies, legislatures, academia and major stakeholders.

Further automation will be introduced and through better management and administration, provincial tax receipt will be increased from the current Rs91.37bn to Rs200bn over the next three years.

KARACHI: An amount of Rs42bn has been earmarked in the ADP for development projects in Karachi. These include S-III project (Rs 7.98bn) and K-IV water supply project (Rs25.552bn).

Mr Shah said the government planned to launch two rapid bus transit projects in the city. An amount of Rs3bn has been allocated for the Green Line bus project. It will be completed in two years.

Published in Dawn, June 14th, 2014