KARACHI: Sindh Senior Minister for Finance Syed Murad Ali Shah has asked the federal government to honour its financial commitments with the province as 70 per cent of the provincial budget is based on the centre’s pledges, which if remain unfulfilled, would have serious impact on development projects.

He also urged the centre to make more gas available to Sindh to enable it to install power plants as according to Article 158 of the Constitution the province where the gas wells were located had precedence over others in its use.

The minister was responding to questions put to him by journalists at a post-budget press conference at the Chief Minister House on Sunday. A day earlier, the minister presented Rs739.3 billion deficit budget for fiscal 2015-16.

He said in reply to a question that he was not aware of the reasons that led to the Muttahida Qaumi Movement’s rejection of the budget whereas the government had launched over Rs49bn worth development schemes for Yellow, Orange, Green, Brown and Redline transport schemes and S-III and K-IV water projects for Karachi, which had been included in the ADP. Still the government would try to satisfy its former allies, he said.

Highlighting salient features of the budget, Mr Shah said that it was the third budget of the Sindh government with a total outlay of Rs739.3 billion that included Rs726.5bn receipts and Rs12.7bn deficit. “We have tried to live up to the people’s expectations,” he remarked.

Since 70 per cent of the provincial budget was based on federal grants and pledged amounts, it adversely affected the development projects if the center made any reductions in the pledged amount in the course of a fiscal year, he said.

He cited some past examples of the federal government releasing funds less than it had pledged earlier and said the centre had promised to provide Rs381.3bn but later reduced the amount to Rs353.7bn while the province had actually received only Rs287bn to date, showing a shortfall of Rs65bn.

The government suffered another big loss on account of straight transfers when it received Rs59.7bn minus Rs22.5bn of the pledged amount of Rs82bn. The centre had promised to provide Rs61.5bn for the upcoming year but the province had so far received Rs49bn less, he said.

He said the centre did not take the provinces onboard while fixing gas price. The government had, therefore, sent a summary to the Council of Common Interests urging it to consult with the provinces in determining the gas price, he said.

The minister said that this year against a target of Rs120bn provincial receipts, the government expected Rs127bn since its performance in tax collection was far better. The rate of sales tax on services in Sindh was the lowest in the country but from the next year the government would broaden its base by bringing more sectors into the tax net, he said.

He said that non-developmental expenditures could be cut down but not abolished altogether as they included grants, subsidies and maintenance and repair charges. The total outlay for the development budget was estimated at Rs213.6bn which included Rs162bn ADP allocation, he said.

Last year, he said, the ADP estimates amounted to Rs185bn which had been cut to Rs168bn in the current budget. Next year, the amount would be further reduced to Rs162bn. In the current ADP of Rs168bn only Rs126bn had been released, he said.

By gradually slicing the ADP allocations, the government had made an effort to reduce difference between the estimates and the released amount, he said, adding that despite decrease in the ADP, release of Rs126bn was a record in Sindh.

The minister said that a new development policy had been framed this year which was approved by the cabinet. Under it, at least 25 per cent of the total estimated amount for any scheme would be released so that work could be completed at the earliest and not drag on for years, he said.

He said that for the ongoing schemes which could complete in under Rs25 million the amount would be released in July in order that such schemes could finish within the shortest possible time.

About the opposition’s demand, which was repeated every year, for bringing farm income into the tax net, Mr Shah said the agriculturalists were already paying tax on their income under the Sindh Land Tax & Agriculture Income Tax Ordinance, still the government was working to rationalise it through various amendments.

The minister said the Brown Line project would provide relief to commuters in the city and the government had asked the federal government to provide sovereign guarantee to the Chinese company that would execute it like it extended the guarantee to the Lahore and Islamabad-Rawalpindi Metro Bus project.

He said the Sindh’s share in the $1.2 billion project would be 15 per cent only and work on it would be undertaken after its approval by Ecnec.

He said the Sindh government had taken an initiative to install power plants after 2013 and started work on a couple of plants. This year also, he said, Rs16.5 billion had been earmarked for energy sector to be able to generate power from coal, wind, solar and hydel resources.

The government was working on five solar-power projects for the generation of 20MW electricity each which would be set up in Thatta, Benazirabad, Sukkur, Jamshoro and Larkana districts, he said.

Besides, he recalled, work on 10,000MW Thar coal power project was going on which was likely to start generation of electricity by 2020. The power plant for the generation of 100MW being installed in Nooriabad was likely to be completed by October this year, said.

After the Hesco declined to purchase the power to be generated by the Nooribad plant and the National Transmission & Dispatch Company Limited said it had no capacity to carry the 100MW electricity to Karachi, the Sindh government had formed its own company, the Sindh Transmission & Dispatch Company, which had already started work on laying a transmission line from Nooriabad to Scheme 33 in Karachi, said the minister.

Answering a question, he said that 318 development schemes would be completed during the current year while the government targeted to complete by the next year 600 out of 1,762 schemes at a cost of Rs106.18 billion.

He said that Rs2.5bn had been allocated in the current budget for K-IV water project for Karachi while the federal government had promised to release its share of Rs2bn by June 30. It was expected that Rs5bn would be available to initiate work on the Rs25.5bn mega project.

“We have also earmarked Rs1,000 million for the execution of S-III water project and also asked the federal government to match the amount as per its commitment,” he said.

At the press conference, the finance minister was accompanied by Sindh Minister for Excise & Taxation Gayanchand Israni, secretary of finance Mohammad Suhail Rajput, additional chief secretary (development) Mohammad Waseem, secretary of education Dr Fazlullah Pechuho, senior member of the Board of Revenue, and chairman of the Sindh Revenue Board.

Published in Dawn, June 15th, 2015

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