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Sindh allocates Rs39.3bn for local govt

Updated June 18, 2013
Sindh Chief Minister Qaim Ali Shah.—File Photo
Sindh Chief Minister Qaim Ali Shah.—File Photo

KARACHI, June 17: The Sindh government unveiled on Monday its budget for the financial year 2013-14 with a total outlay of Rs617.21 billion against estimated receipts of Rs559.57bn.

An amount of Rs185bn has been se aside for the provincial annual development plan, against last year’s Rs181bn. Of this, Rs8.6bn has been allocated for seven major priority areas, including law and order, poverty alleviation initiatives, providing better education and healthcare and investment in energy, agriculture and Karachi Circular Railway.

Sindh Chief Minister Qaim Ali Shah, who presented the budget, announced a 15 per cent increase in salary of government employees from BPS-1 to 15 and 10pc for those in BPS-16 and above. Pensions were raised by 10pc, while the minimum amount has been raised to Rs5,000 per month from Rs3,000.

The chief minister said the provincial government believed in instituting an effective system of local bodies and making them financially viable and independent and, therefore, had earmarked Rs39.3bn for the purpose.

Revenue receipts from the federal divisible pool for the fiscal year 2013-14 are estimated at Rs332.9bn — 5.9pc higher than the current year’s estimates. Receipts under straight transfers are estimated at Rs67.1bn, against this year’s Rs59.3bn. The province’s own receipts are estimated at Rs120.2bn, including Rs42bn to be raised through sales tax on services.

The chief minister announced that 20000 new jobs would be created in the police force and Rs400 million spent on installing surveillance cameras in Karachi. Under the development plan, Rs118.74bn has been allocated for the education sector, against the current year’s Rs111.96b, and Rs48.63bn for improving law and order, against Rs39.3bn. The allocation for the health sector has been increased by 54pc to Rs17bn from Rs11bn.

In the energy sector, the government plans to spend Rs32bn on infrastructure projects in the Thar region.

An amount of Rs785.71 million has been set aside for creating jobs, introducing internship employment and self-employment schemes for youth and alleviating poverty through the socio-economic development. Allocation for communication development has been increased to Rs16.80bn from Rs15.55bn.

The estimated cost of the Karachi Circular Railway project has increased from $1.55bn to $2.6bn. It will be completed with the assistance of Japan.

The allocation for the K-IV Greater Karachi Bulk Water Supply Scheme remained unchanged at Rs1bn, but that for the S-III project has been raised to Rs1.40bn from Rs1bn.

The poverty alleviation programme gets Rs749.52 million, against this year’s Rs497.25m; agriculture Rs6.16bn; and irrigation Rs12bn, against Rs7.99bn.

Referring to the fiscal measures, the chief minister said the tax base needed to be appropriately expanded and anomalies and inequities removed. He announced that there would be no increase in the existing standard rate of 16pc in order to contain inflation and minimise burden on consumers.

“Although our net receipts will decrease because of the inputs taxed by the federation at 17pc, this revenue loss will be sustained in order to provide relief to consumers,” he said, adding that sales tax was insufficient and limited to a few service items and at the existing tax base it was not possible to achieve the desirable tax-to-GDP ratio in this sector.

Mr Shah said services of advertising agents, security agencies, commodity brokers, marriage halls and lawns, event management and public bonded warehouses would be levied. Exemption on internet would remain up to Rs1,500 per month for the benefit of students and households.

New services like beauty parlours earning up to Rs3.6 million and race clubs would pay 10pc tax. A tax of 7.5pc on using bed in hotels has been withdrawn.

The chief minister announced an increase in special development and maintenance of infrastructure cess for meeting the cost of wear and tear on infrastructure due to heavy traffic of goods entering the province by air or sea, and for providing security.

Mr Shah proposed an increase in property tax from 20pc to 25pc on annual rental value of buildings and lands and to raise licence fees for trade and import of potable liquor and retail of liquor from Rs600,000 to Rs800,000 and from Rs350,000 to Rs500,000 prospectively.