THE expanded Rs686 billion Sindh budget deals with effects of a troubled provincial economy reflected in rising disparities, digressing social indicators, weak governance, flight of capital and brain drain, but ignores their remedies.

“What struck me the most was the government’s comfort, when they ought to worry. Nothing seems to be working in the province. The general breakdown of law and order; the attack on the Karachi airport earlier in the week; load shedding in sweltering June driving people crazy; insufficient water; public transport in tatters; shy private investment when compared to Punjab; rampant unemployment; and the people losing patience over the rising cost of living. But they do not appear to see any urgency to attend to these challenges. I can’t imagine how a government can be so apathetic,” commented a lady banker frustrated over the prolonged power breakdown in the city on the day of the budget.

The proposed budget, as expected, is 24pc (Rs136bn) bigger than the last one of Rs550bn. Total revenue receipts — at Rs672bn — on account of an increase in provincial transfers, are 22pc higher than last year. With expenditures at Rs686bn, a deficit of Rs14bn has been projected.

Estimated revenue receipts from the federal divisible pool for FY15 are estimated at Rs381bn, higher by the same percentage as the total budget, i.e. 24pc. Straight transfers are projected at Rs83bn, about Rs10bn more than last year.

Sindh’s own receipts are estimated at Rs125bn. Despite multiple weaknesses, it is ahead of all other provinces in generating own resources: about 20pc of the budget, against 15pc in Punjab and 6pc in KP and Balochistan.

It is another matter if the weak economic management reveals itself in utilisation of available resources. Sindh is marginally better than Balochistan on that count. According to current finance ministry data presented in a table by a report of the Institute for Policy Reforms titled ‘Provincial budgetary proposals 2014-15,’ revenue-surplus as percentage of revenue receipts in Sindh was 32pc, against 36pc in Balochistan, 29pc in KP and 24pc in Punjab, reflecting its thrust at improving governance.

The situation is a sad commentary on the state of capacity building for economic management on the provincial level four years after the passage of the landmark 7th NFC Award, which paved the way for significant decentralisation of fiscal management, and the passage of the equally important 18th Amendment to the Constitution, which devolved administrative and legislative powers of the federal government by abolishing the Concurrent List during the PPP rule in 2010.

With the management of social infrastructure and service delivery now a provincial function, it would be apt to monitor and report key indicators of the provincial economy in a pre-budget survey.

In the absence of consolidated provincial data, the analysis is more intuitional and not based on thorough understanding of the economy. It is difficult to assess the progress made on the path of development or judge the quality of planning against economic challenges at the Sindh level.

A quick look at the Sindh budget 2014-15, with much effort to see through the political smokescreen, shows a half hearted effort to improve governance with, for example, more details on allocations for specific heads such as individual public sector schools.

Chief Minister Qaim Ali Shah, for the 7th year, announced nothing in his speech that could generate even a faint impression that the PPP is worried over the issues of economic exclusion and sliding status of cities of Sindh compared to Punjab, or the pathetic state of service delivery, or its intention to reverse the trend by amending policies to address the cause of laggard progress in the province.

It seems they are content with Karachi’s snail progress and do not seem to care if Hyderabad, Sukkur, Khairpur, Shikarpur and Larkana do not even remotely compare with the pace of progress and visible prosperity in Faisalabad, Sialkot, Gujrat, Wazirabad and Rawalpindi.

True to the character of the rural elite, the PPP leadership does not seem to be inclined to, or trained in, economic governance. The value of industrial investment in resource utilisation — both physical and human — for capital formation seems to be lost on them. They appear to be pleased with themselves by recruiting unemployed youth in the bloated government and its underperforming commercial entities, and offering hand-me-downs to needy.

There was nothing in the speech to suggest any effort to mobilise tax revenue that is justified by the size of farm income, as it would have upset the power structure that the PPP avoids tinkering with. The government did announce removing an exemption for the urban immoveable property tax. How it intends to do that is not very clear at this stage.

Qaim Ali Shah also hinted at demanding more financial powers from the federal government to collect sales tax on goods, as the negotiations for the 8th NFC Award are expected to start next month. His case is weakened, as the province currently lacks the capacity to utilise resources already at its disposal.

Zubyr Soomro, a retired Citi banker, said two points that stood out in the budget were: the gap in Sindh and Punjab in return on money spent on education and the composition of education budget that allocates 90pc for salaries of teachers and only 10 for development; and whereas Punjab took clear steps in taxing the rich, Sindh did not. “People will pay to support development in Sindh, but they have to have faith that the funds will be utilised well,” he qualified his assertion.