Sindh budget

Published June 16, 2024

SINDH’S Rs3.06tr budget for the upcoming financial year is a combination of populist interventions, attempts to broaden its provincial tax base and efforts to help the millions affected by the floods in 2022 through a big development programme aided by foreign lenders and donors. Flush in cash like Punjab thanks to surging transfers from the federal divisible tax pool under the existing NFC, the new budget launched the Mazdoor and Haari cards; it plans to distribute free solar home systems to 2.6m off-grid households, and a big Ramazan subsidy package for the working classes. Overall, the subsidy costs will go up to Rs116bn next year. In addition, the Murad Ali Shah government has raised pensions by 15pc and salaries by up to 30pc, beating the federal government.

On taxation, Sindh seems to be doing better than the other provinces. It is broadening its own tax net to rake in additional revenues of Rs76.8bn as it targets provincial tax receipts of Rs661.9bn against Punjab’s Rs471.9bn in the next fiscal year. The budget also ‘rationalises’ the prevailing tax regime by reducing the burden on various sectors. The situation, according to the chief minister, who also holds the finance portfolio in the province, “calls for levying new taxes, rationalising the prevailing regime, assuring relief to poor segments, and capturing the potential revenue from the affluent sections”. Sadly, the provincial government stopped short of restructuring the agricultural tax — the ruling PPP, after all, is overwhelmingly dominated by landed aristocracy. Over the years, the PPP has consistently increased its development spending. However, this does not seem to have improved urban infrastructure, uplifted public service delivery or addressed rural poverty. Law and order is also unsatisfactory as is evident from Karachi’s rising crime graph. What qualitative changes next year’s ‘record’ development allocations of Rs959bn, including foreign project assistance of Rs334bn, will bring to the lives of Sindh’s citizens is anybody’s guess.

Published in Dawn, June 16th, 2024

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