THE budget announced by the Sindh government may be unique in the sense that it is swimming against the tide of what the ruling party wants the provinces to do. The budget has announced a salary increase of 15pc for government employees, larger than what its counterpart Punjab has granted. The thrust of the Sindh budget also seems to be on current expenditures going by a comparison of budgeted development spending from last year to this year, again in contrast to Punjab that has kept current expenditures restrained and invested its resources in an expansion of development spending. The finance minister, Murad Ali Shah, attributes this to lower transfers from the centre under the NFC award, but there are grounds to be sceptical of this claim. The provincial government has different priorities that are better served through current spending instead.

On the development side, there is a continued focus on building and construction for the new resources that are going into the education sector, and very little on pedagogy, teacher-training and the software of public education. A brick-and-mortar approach to building state capacity is still the main thrust of the budget. Continued allocations for public transport in Karachi show that the government is serious about the bus lines they are intending to build. But no major shift in strategy or spending or revenue priorities is in evidence. To top it all, the province has not restrained its expectation of transfers from the centre for the next fiscal year, despite strong demands from the federal government to run large surpluses this year to help it with its deficit-containment strategy. Punjab has obliged but Sindh appears indifferent. In the year ahead, this is likely to emerge as a bone of contention, because given the shape of things, transfers to the provinces will probably come under greater strain. The budget shows it will be business as usual next year.

Published in Dawn, June 16th, 2019