The Pakistan Muslim League-Nawaz-led coalition government in Balochistan will increase the size of its total budget — including state trading in commodities and annual development programme — by 11pc from the original estimates of Rs289 billion to Rs321bn for the outgoing fiscal year; carrying a deficit of Rs41bn or about 13pc of the outlay.
The deficit for the current year was estimated to be around Rs37bn, about the same size as the per cent of the total budget outlay proposed for the next fiscal.
The budget is expected to be announced on June 9.
The size of the Annual Development Programme (ADP) is pitched at Rs76bn, almost 17pc greater than the original estimates of Rs65bn for the ongoing year.
The increase in provincial revenue has since helped the province significantly spike its development investment from its own resources, but it has not done much to escalate economic growth
The province expects to receive foreign project loans of Rs2.63bn for development. The bulk of the project assistance, Rs2.1bn, will come from the International Development Association (IDA) for water and nutrition schemes in the province. The rest of Rs533 million will be lent by the International Fund for Agriculture Development (IFAD).
Although the coalition government had targeted Rs5.3bn in foreign project loans for development for the outgoing year, they could raise only Rs1.2bn.
Additionally, the provincial government is also expecting foreign development grants of Rs3.38bn from the Multiple Donors Trust Fund (MDTF) for education, the immunisation programme, and governance and policy reforms in the province.
The province was able to receive foreign grants of Rs3.37bn this year against the original estimate of Rs876m.
Foreign project loans and grants will raise the total estimated development spend size in the province for the next financial year to Rs82bn, or 15pc higher than the original estimates of Rs71bn for the present year.
Apart from the estimated foreign project loans and grants (of Rs6bn), the Nawab Sanaullah Zehri government expects to receive federal transfers of Rs229bn under the National Finance Commission (NFC) award, according to its finance secretary Akber Khan Durrani.
The projected amount is 10pc greater than the revised estimates of Rs206bn and 14.5pc higher than the original estimates of Rs196bn for the present year. Besides, the secretary told Dawn from Quetta over telephone, the government plans to raise its own provincial receipts to above Rs12bn from Rs9bn for the present year.
A large chunk of the increase from federal transfers — Rs13bn — will however be used to make up for the 10pc raise announced by the federal government in the pay and pensions of government employees, Durrani said.
“Our salary and pension bill will rise to Rs124bn next year from Rs111bn this year, offsetting much of the impact of the increase in our share from the federal tax money,” he said.
The secretary said the Balochistan government will have sufficient (identifiable) resources to meet its current expenditure, which have risen to Rs244bn, and partially finance (Rs35bn) its development spending.
“The development deficit next year will be funded through savings in the current expenditure and other means,” he said without elaborating on the ‘other means’.
The province had produced a budget surplus of Rs34.5bn for the first three quarters of the ongoing fiscal year to March as its total development and non-development expenditure stood slightly less than Rs130bn against revenue receipts of Rs164.26bn for the period — as it saved on its current expenditure.
The current expenditure during the first nine months of the year stood at Rs112.08bn against budget projections of Rs185bn for the entire year while only a sum of Rs17.68bn was spent on development in the current year.
Balochistan’s share in the country’s tax income has spiked by almost eight times from Rs29bn in 2009/2010 to Rs220bn in the estimated provincial revenue receipts for the next fiscal year following the implementation of the 7th National Finance award in 2010-2011.
Additionally, the province is also being reimbursed gas development surcharge arrears of Rs120bn, outstanding since 1954, in equal annual instalments of Rs12bn after the retrospective increase in gas and wellhead prices.
The increase in provincial revenue has since helped it significantly spike its development investment from its own resources, but the hefty revenue surge has not done much to escalate economic growth, bridge social and economic infrastructure gaps, or improve the quality of governance.
Public service delivery remains poor and coverage patchy in a province wracked by years of low-intensity Baloch insurgency and growing religious militancy that make execution of development projects a daunting task for the weak political coalition.
Published in Dawn, The Business and Finance Weekly, June 5th, 2017