Sindh budgets for full year, but three-month spending authority

May 11, 2018


SINDH Chief Minister Syed Murad Ali Shah presenting the budget for fiscal year 2018-19 in the Sindh Assembly on Thursday.—APP
SINDH Chief Minister Syed Murad Ali Shah presenting the budget for fiscal year 2018-19 in the Sindh Assembly on Thursday.—APP

KARACHI: Chief Minister Syed Murad Ali Shah on Thursday presented in the Sindh Assembly a Rs1,144.448 billion tax-free budget with Rs343.90bn development outlay for the next financial year.

He requested the house to authorise expenditure for only three months — from July 1 to Sept 30.

“Though constitutionally, we have the mandate to approve budget for the whole financial year, however, to uphold the party principles of fair play we believe that it is the rightful mandate of the incoming government to set budget priorities for themselves,” he said.

Mr Shah said for the second year in a row, “we are not proposing any new taxes in the budget”.

CM Shah says Rs343bn has been proposed for development

“Budget 2018-19 is a tax-free, welfare-oriented and a progressive budget. I will not be introducing a Finance Bill for 2018-19.”

The chief minister said almost 75 per cent of the Sindh government’s revenue receipts were dependent on federal transfers, consisting of shares from the federal divisible pool, straight transfers and grant to offset losses in lieu of abolition of OZT.

“The major chunk comes from divisible pool taxes, which is distributed to the provinces under the NFC formula,” he said.

Mr Shah said during 2017-18, Rs274bn was allocated in the budget estimates for development which was revised to Rs226bn, including Rs28bn for district ADP (Annual Develop­ment Plan) schemes.

Mr Shah said total development budget outlay in 2018-19 would be Rs343.9bn.

He said the provincial development budget included Rs252bn for ADP 2018-19 out of which Rs202bn (80pc) had been allocated for 2,226 ongoing schemes, while new schemes of all departments would be accommodated under the block provision of Rs50bn, being 20pc of the development budget, earmarked separately as ‘Block Allocation’ for new schemes to be decided by the next government for all sectors in ADP. In addition, Rs30bn have been allocated for district ADP.

The revised estimates for total receipts of province for the current financial year are Rs.966.6bn as against budget estimates of Rs1,028.9bn.

The Sindh government, said Mr Shah, was largely dependent on federal transfers which constituted 61pc of its total revenue.

He said with the unpredictability of those fiscal transfers from the federal government to the provincial government, budget preparation became cumbersome as projections of non-development expenditure and development portfolio were largely based on such estimates.

“Resultantly, provincial development expenditure is to be adjusted to offset the effect. There is decrease of Rs28.5bn in federal transfers in revised estimates 2017-18 as communicated by the federal government,” he said.

He said receipts of federal PSDP were slashed to Rs20.4bn from Rs27.3bn; while revised FPA stood at Rs27.7bn as against Rs42.7bn.

He said on the provincial revenue collection side, “we were largely able to achieve our provincial tax receipt targets”.

Mr Shah claimed that the Sindh Revenue Board and Excise, Taxation and Narcotics Control Department were able to achieve their tax targets. The provincial tax and non-tax receipt is revised to Rs197bn against an estimated target of Rs199.6bn.

He informed the house that the budget had been revised from Rs1,043.2bn to Rs987.8bn. The current expenditure had been revised to Rs685.2bn from Rs666.5bn. He added that the increase was primarily because of increase in the pension of retired employees, and grants to various sectors of the economy.

The chief minister said the development expenditure had been revised at Rs282.4bn against an estimated allocation of Rs344bn.

“The current financial year recorded the highest utilisation of development funds, till yesterday, the development expenditure was recorded asRs143.3bn,” he said.


Mr Shah said the total receipts for 2017-18 were estimated at Rs1028.9bn. The estimated expenditure was Rs1043.2bn.

He said for the next financial year budget estimate of receipts was Rs1124bn which was 8.5pc higher than the current fiscal year.

“Receipts from the Centre on account of revenue assignment, straight transfer and grants are estimated at Rs665.1bn. Receipts from Islamabad are 59.2pc of the total receipts of the province. Receipts of the federal PSDP are estimated at Rs15bn. Receipts on account of FPA, budgetary support loans and grants are estimated at Rs46.9bn. Receipts from province’s own sources including tax and non-tax receipts are estimated at Rs243bn,” he said.

The chief minister said the outlay of budget was estimated at Rs1144.2bn as against the budget estimate of Rs1043.2bn of 2017-18, reflecting an increase of 8.8pc.

“The current expenditure, including current revenue expenditure of Rs773.2bn and current capital expenditure of Rs27.1bn, stands at Rs800.3bn,” he said.

He said for the next fiscal year, current expenditure constituted 69.9pc of the total provincial budget. The estimates of development expenditure for fiscal 2018-19 were pitched at Rs344bn.

Published in Dawn, May 11th, 2018