KARACHI: The Sindh government unveiled on Friday a tax-free Rs457.5 billion budget for 2011-12 with total estimated revenue receipts of Rs458.4 billion, showing an estimated surplus of Rs882 million.
Finance Minister Syed Murad Ali Shah, presenting the fourth budget of the PPP-led coalition government, announced amidst thumping of desks by members of the provincial Assembly that the overall development portfolio was an unprecedented Rs161 billion, while estimated revenue receipts from the federal divisible pool would be Rs251.9 billion -- a 21 per cent increase over budget estimates of 2010-11. Receipts under straight transfers are estimated at Rs53.4 billion, marginally higher than last year’s Rs51.2 billion.
Provincial levies are estimated to bring in Rs79.9 billion, including Rs25 billion to be collected in sales tax on services.
Current revenue expenditures are estimated at Rs283.147 billion -- a one per cent increase over the revised estimates of Rs281.237 billion for 2010-11.
Mr Shah said this time the government had made conservative estimates keeping in view the financial position of the province.
The current revenue expenditure is estimated to fall from Rs147.451 billion to Rs146.276 billion, he said.
The share of local governments has been increased from Rs120.815 billion to Rs135.171 billion. The minister said the share included district annual development programmes of over Rs20 billion which were reflected in current revenue expenditure in the budget.
Keeping in view a decision of the federal government, it has been proposed that the province adopt the same measures for increases in pay, allowances and pension of its employees.
Presenting the revised estimates for 2010-11, the minister said receipts from the federal divisible pool were of Rs199.03 billion against the budget estimates of Rs207.3 billion. Revised estimates of straight transfers are Rs61.5 billion against budget estimates of Rs51.2 billion.
A grant to offset losses because of abolition of the octroi and zila tax was revised down from Rs5.6 billion to Rs5.5 billion.
The total federal receipts for the current year are estimated at Rs266.03 billion.
The minister said the federal receipts in the year prior to the new National Finance Commission award were Rs199 billion and Sindh had received 34 per cent more in 2010-11.
TAX ON SERVICES: Mr Shah termed the right to collect sales tax on services a landmark achievement of the province from the NFC award.
He said the provincial government had also managed to resolve the issue of service taxes, which used to be collected by the federal government erroneously in the excise mode, depriving the provinces of their due share.
Although the Sindh Revenue Board had been constituted, collection of sales tax on services by the province could not begin because of disputes with the federal government and other provinces, he said. In the given situation the federal government was allowed to collect the sales tax on services but it was closely monitored.
The Sindh government will get approximately Rs19.5 billon under this head from the federal government for 2010-11 against only Rs8.1 billion received as provincial sales tax on services, including tax collected in the CE mode in 2009-10.
The minister said the NFC award had increased Sindh’s collection from sales tax on services by 140 per cent.Against a budget estimate of Rs50.5 billion, provincial tax and non-tax receipts were revised down to Rs45.1 billion -- a 13 per cent increase from the revised estimates for last financial year.
The current expenditure for 2010-11 has been revised to Rs281.237 billion from the budget estimate of Rs268.267 billion.
The increase is mainly due to outside expenditure on flood-related activities. The revised figure for current capital expenditure is Rs20.488 billion against the budget estimate of Rs18.898 billion.
The minister said the sectors which had been given priority in allocations were agriculture, livestock, water and drainage, transport and communications, industries, education, health, Thar coal and housing and village and town rehabilitation.
The two members of the house belonging to the Awami National Party boycotted the session.
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