Rather than projecting over-ambitious targets, the Sindh finance department has opted for a realistic approach for development strategy and sector allocations for FY2014-15. Thus various provincial departments have also evolved a clear planning strategy for releasing funds.

The Annual Development Plan FY2014-15 takes into account repeated revisions of tax collection targets by Federal Board of Revenue which forces Sindh to review its development targets.

The sums allocated on assumptions of federal tax flows were not actually released. This resulted in non-utilisation of funds at the end of the day. The provinces depend largely on tax revenue receipts from federal government as tax collection and distribution are highly centralised.

A Sindh finance department official points out that this year the FBR has revised its tax collection targets twice from Rs2.4trn to Rs2.2trn. Due to revisions, Sindh received less than indicated share of Rs409bn funds from the federation. Provincial kitty has received merely Rs327bn.

Owing to repeated revisions of federal tax revenue targets, Sindh received Rs327bn — less than the estimated share of Rs409bn from the federal government

Agriculture sector’s development outlay was cut by 23pc for FY2014-15 to Rs4.47bn against demand of Rs6.7bn which included 10pc usual annual increase. This year’s allocations are meant for 32 development schemes including 22 on-going and 10 new ones. Last year agriculture ADP stood at Rs6.21bn although Rs3.29bn was released and by close of fiscal year Rs2.26bn or so would actually be spent.

Agriculture’s development budget FY2014-15 focuses on mechanisation, research, extension services, on-farm water management and new component of supplies and price. Of these sectors mechanisation is to get Rs2.32bn and on-farm water management Rs1.14bn.

The department has come-up with new schemes to address issues of hybrid seed technology, bio fertiliser production and solar technology tube-wells. Growers have been crying hoarse for subsidised solar powered tube-wells to enable them overcome cost of production in view of rising electricity cost and load-shedding.

Under the solar tube-well scheme, 70 solar panels are to be provided with subsidy to farmers in FY2014-15 and this number will be increased if the project is successful. The scheme’s cost is estimated at Rs1bn and an initial allocation of Rs130m is being made.

To introduce local technology to end farmers’ reliance on imported hybrid seeds, a scheme has been prepared with an estimated cost of Rs500m. Foreign experts are to be engaged for introduction of technology and training of local researchers/breeders in Sindh so that seed is locally produced. Initially, Rs10m has been allocated for it.

There is also a plan to establish cotton and sugarcane research institutes in Ghotki at an overall cost of Rs200m, with a token allocation of Rs30m for 2014-15. The scheme would be completed in three years. Likewise bio fertiliser production will be promoted to reduce the use of chemical fertiliser. With initial allocation of Rs20m, the project is to be completed in three years at an estimated cost of Rs300m.

Research remains a weak area as is evident from its meagre allocation. An amount of Rs275m is earmarked for FY2014-15 which officials say is unimpressive and indicates how agriculture financing stands neglected in this important area of growth.

“This year Rs2.26bn was spent out of releases of Rs3.29bn”, says an official. He points out that usually first quarter of fiscal year passes with near zero releases.

These releases are finally made in next quarter by the finance department and with the condition that 80pc of it is to be utilised first before the next release is sought. In last fiscal, some schemes were given 25pc.

Thus imports of machineries and implements like bulldozers could not take place for want of adequate payments.

Besides, subsidy on tractors will continue in new fiscal year. A subsidy of Rs200,000 is given if tractor’s cost is Rs800,000 and Rs300,000 if price is over Rs800,000. In current year, 1400 tractors were to be provided with subsidy and officials hope that target would be met by June. In next fiscal year, 2,000 tractors are targeted.

Other schemes include provision of 1,200 agriculture implements including laser land levelers, wheat and rice thrashers, ploughs, lining of more water-courses, installation of drip irrigation etc.

Sindh government has also negotiated a soft loan of Rs2.74bn for ‘Sindh Agriculture Growth Project’ with the World Bank. An official said the loan would be approved from WB’s Board in July. The Sindh Government has made Rs6m as a token allocation. It aims to ensure capacity building and institutional development for investment in project management,monitoring and evaluation.

Published in Dawn, Economic & Business, June 16th, 2014