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Sindh’s Rs1.217 trillion budget presented amid opposition’s protest

Updated June 15, 2019

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Workers unload budget documents outside the Sindh Assembly building on Friday. — PPI
Workers unload budget documents outside the Sindh Assembly building on Friday. — PPI

KARACHI: Amid a noisy protest by the opposition in the Sindh Assembly, Chief Minister Syed Murad Ali Shah on Friday presented the Rs1.217 trillion deficit-free budget of the province for financial year 2019-20.

As CM Shah stood to present the budget, opposition lawmakers belonging to the Pakistan Tehreek-i-Insaf, Muttahida Qaumi Movement-Pakistan and Grand Democratic Alliance gathered in front of the chair. They were holding placards and chanting anti-government slogans.

They almost surrounded the chair of the leader of the house at which many members from the treasury benches came and shielded the CM, who began reading his speech.

Salaries of govt employees have been increased by 15pc

The protest continued till the budget speech lasted. Amid a rumpus, the CM introduced the finance bill, which would be taken up on June 19.

The budget unveiled a Peoples Promise Programme, a plan for poverty reduction as pledged by PPP chairman Bilawal Bhutto-Zardari in his election campaign.

As it was largely featured in the last budget, first priority in terms of budgetary allocations has been given to education followed by health and law and order.

The chief minister said the federal government had revised federal transfers from estimates of Rs665.085bn to Rs631.543bn, but, “such claims were misleading”.

He added the federal government failed to assess its own fiscal position and erroneously communicated two different figures of revised federal transfers within a matter of days.

“In the last 11 months, Sindh has received only Rs492.135bn on account of federal transfers and it is anticipated that by the end of [this] financial year the shortfall would be Rs117.527bn,” he said.

He said the federal government blamed the Federal Board of Revenue for poor revenue collection, therefore, “we offer the federal government to authorise provincial governments to collect sales tax on goods on its behalf”.

“We believe that once devolved, the returns from sales tax on goods can be maximised as it has been done in case of sales tax on services,” he said.

“The federal government has shown no real intent to develop consensus on the 9th NFC [National Finance Commission] Award and the delay in the announcement of the award is at the expense of the rights of provinces.”

Revised revenue targets

The revenue targets of the province have been revised from Rs243.082bn to Rs240.746bn. As a result, against an estimated budgetary amount of Rs1.123 trillion, the revised receipts for current fiscal year stand at Rs963.699bn.

The provincial government, as stated by the chief minister, had to cut down its development expenditure which now stands at Rs172.941bn for current financial year.

“This has affected development endeavours of the provincial government. Many development schemes that could have been completed have been delayed due to non-availability of funds,” he said.

Similarly, on the current revenue side estimates have been revised from Rs773.237bn to Rs751.751bn. The reduction on the current revenue side is primarily because of the “severe austerity measures and strict financial discipline”.

He said during fiscal year 2018-19, he had to cut operating expenses. The repair and maintenance budget of the departments had been substantially reduced from Rs27bn to Rs11bn. Also, the fourth quarter of the budget under operating expenses had been partially released.

Mr Shah said despite all financial hardships, he had tried to ensure that all health and educational facilities received substantial budgetary allocations.

He said due to austerity drive “the budget deficit for the current financial year comes to Rs16bn against an expected Rs20.457bn”.

Budget estimates 2019-20

The total receipts of the province for the financial year 2019-20 are estimated at Rs1.217 trillion against an estimated expenditure of Rs1.217 trillion.

The province is expected to receive Rs835.375bn in the head of federal transfers. The receipts from the federal government will account for 74.3 per cent of the total receipts.

Mr Shah said that the federal government had failed to achieve its target in yesteryears.

On the current revenue side, he added, the expenditure budget was estimated at Rs870.217bn, which showed an increase of 12.5pc over the current year’s allocation of Rs773.237bn.

“This increase in expenditure is primarily in the employee-related expenses, which could not have been avoided. Similarly, the impact of increasing utilities has been absorbed. Our austerity policy shall continue during the next financial year. We have introduced major cuts in operating expenses. However, it would not be done at the cost of social sectors.”

Development portfolio stands at Rs283.5bn

Mr Shah said the development portfolio for next financial year was Rs283.5bn which included Rs228bn on account of provincial and district ADP.

He said the prime minister had announced a package of Rs162bn for Karachi on March 30, 2019. “There are only 19 Karachi-based schemes with a total allocation of Rs12.1bn. The new schemes for Karachi are only six with an allocation of Rs3.9 billion.”

He spoke at length over various sectors and his government’s priorities set for the next fiscal. The chief minister said Sindh faced severe water shortages as almost over 73pc of its land had brackish groundwater. The allocation for irrigation sector has been increased in non-development budget from Rs22.744bn to Rs23.07bn.

He said the Sindh government had intervened to improve the business climate and regulatory atmosphere for ease of doing business.

He said a marble city was planned over 300 acres of land along Northern bypass in Karachi. He spoke about special economic zones and urban development and added that the government had conducted the Karachi Diagnostic Study.

He said the government had signed big investments worth US$1.5 billion (Rs.226bn) over a period of five years with international development partners for high-priority sectors.

He said the agriculture department’s allocation for ADP 2019-20 was pitched at Rs8.4bn, which included Rs4.7bn of foreign assistance.

Increase in govt employees salaries

The chief minister announced an increase of 15pc as ad hoc relief allowance in the salaries of all government employees.

The pensioners will also be entitled to get a 15pc raise in their pensions.

The CM also announced Rs17,000 as the minimum monthly wage in the province.

CM Shah said from now on pensioners in Sindh would receive their monthly pension payments directly in their bank accounts “with honour and dignity”.

Opposition slams budget

Leader of the Opposition in the Sindh Assembly Firdous Shamim Naqvi and MQM-P leader Khwaja Izharul Hasan expressed their concerns over imposition of taxes in the budget, adds Habib Khan Ghori.

Talking to the media outside the assembly, Mr Naqvi said that the budget was not as per the aspiration of the people of Sindh.

He said that the opposition parties would give their detailed reaction on the budget in a press conference on Sunday.

Khwaja Izhar said that the Sindh government had already been generating revenue by taxing 42 sectors and now it had further burdened the people by imposing tax on over 12 sectors, including imposing duty on CNG and petroleum.

He said that while Rs285bn would be generated from property tax, no tax had been imposed on agriculture income.

Published in Dawn, June 15th, 2019