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Balochistan plans increased spending on infrastructure

June 21, 2013

AQUETTA, June 20: Balochistan’s Rs198.4 billion deficit budget for the financial year 2013-14 proposes increased spending on social and economic infrastructure and plans to collect more provincial taxes, contain current expenditure and abolish the role of legislators in suggesting new development schemes.

The coalition government of the PML-N, National Party and Pakhtunkhwa Milli Awami Party announced a 15 per cent increase in the salary of government employees in BPS-1 to 16 and 10pc in BPS-17 and above. Pensions were raised by 15pc. The pay and pension hike will cost the province more than Rs4bn or 2pc of the size of the budget.

Presenting his government’s first budget on Thursday, Chief Minister Dr Abdul Malik Baloch described the poor law and order and inadequate financial resources as major constraints to development of the sparsely populated province which constitutes about 42pc of the total land mass of the country.

He pledged to get the provincial share from the federal tax divisible pool from less than 58pc to 80pc in the next NFC award and said the federal government had assured him of its full cooperation in controlling violence in the province.

The allocation for public safety and police will eat away Rs16.2bn or over 8pc of the total budget estimates. It is 16pc higher than the original estimates for the current fiscal year. The government will also provide special allowance to security personnel and create facilities for them in view of the nature of their job and risks they face. The budget vows to plug revenue and expenditure leakages and eliminate financial corruption and promises to create nearly 4,500 new jobs in different departments.

The budget proposes to more than double the provincial tax revenues to above Rs6bn by implementing the devolved capital value tax on property, expanding the scope of provincial sales tax on services from three to 110 services and increasing the existing rates of motor vehicle registration and road tax.

The government will legislate to levy capital value tax, which the previous government failed to collect over the past three years for political reasons. The increase in the number of services covered by sales tax will help boost its collection from Rs1.15bn to Rs4.5bn.

Balochistan largely depends on federal transfers for financial resources because of an underdeveloped economy and inelastic and narrow tax base.

The focus of investment spending of almost Rs44bn, up by 22pc from Rs36bn this year, will be on improving social service delivery and creating infrastructure to boost industry, fisheries, mineral development, agriculture and trade. The projects in education (23pc), health and public health engineering (14pc), water supply (6pc), roads (18.6pc), power (6pc) and agriculture (5.2pc) have been allocated a chunk of the development spending.

The money for investment has been raised from revenue surplus and foreign project assistance of Rs4bn, and is slightly larger than development funds spent on Metro Bus project and a few other smaller schemes in Lahore.

Other major initiatives include establishment of common border markets with Iran and Afghanistan, creation of special economic zones in Quetta and Lasbela and industrial estates in Hub, Quetta and Dera Murad Jamali, installation of water filter plants in various areas of the province, including Gwadar, cancellation of leases in the mineral sector and production of solar power for 300 villages.

“The budget – which carries a deficit of around Rs8bn with resources estimated at Rs190bn against expenditure of Rs198bn – will invest mainly in infrastructure, create jobs, promote inclusive growth and improve social service delivery,” the document says.

In his budget speech, the chief minister regretted that the pace of development was extremely slow in the province rich with natural resources. He said the budget would not solve all problems, but would definitely be a step in that direction.

In addition to boosting investment spending, the Balochistan government will initiate wide-ranging education reforms, including changes in curriculum to cut out hate material from textbooks and improvement in infrastructure for primary to university to professional education.

It also plans to revamp the healthcare sector to provide better quality services to people at government health facilities, expunge laws discriminating against women, give preference to the locals on official jobs and protect non-Muslims living in the province.