QUETTA, June 20: That the government of Balochistan is facing a severe financial crisis was evident from Finance Minister Syed Ehsan Shah’s budget speech in the provincial assembly on Tuesday.

Groaning under a heavy burden of Rs17 billion State Bank of Pakistan’s debt, the government presented its budget for 2006-07 with an overall deficit of Rs10.96 billion. This deficit, the minister said, “will be met from austerity measures, local resource generation and federal grants”.

The Balochistan government already carries a deficit of Rs8.47 billion from the 2005-06 budget and an unimplemented development budget of Rs9 billion. The indicated Rs10.82 billion development outlay for 2006-07 comprises the ongoing and unimplemented schemes of the outgoing fiscal year.

This, according to financial analysts, means there is no development investment in a province where population growth rate is 2.8 per cent, higher than the national average of 2.1 per cent.

The size of the budget is Rs59.69 billion but, as some of the analysts said, the figures in official documents did not match the outlay. The total expenditure is projected at Rs48.27 billion — Rs37.45 billion revenue expenditure and Rs10.82 billion development outlay. The provincial share in the development outlay is Rs7.05 billion, which is entirely unfunded.

Total receipts are Rs48.6 billion of which Rs36.29 billion are from the divisible pool, direct transfers of Balochistan’s share in oil and gas revenue and subvention and the provincial share. The government expects a flow of Rs12 billion from different sources.

The minister delivered his budget speech amid an uproar marked by shouts and desk-thumping by opposition members who protested against what they called an unjust NFC award and denial of Balochistan’s legitimate share in oil and gas revenue and raised slogans on political issues. “The big challenge for the government is to mobilise additional resources for a meaningful economic relief for the people,” Syed Ehsan Shah said.

In his review of 2005-06, he said receipts had increased from initial estimates of Rs29.17 billion to Rs32.20 billion owing to improvement in the federal government’s tax collection and also because of recovery of provincial revenue. The provincial expenditure during 2005-06 decreased to Rs30.3 billion from Rs34.6 billion.

The minister did not elaborate on Rs9 billion allocated for development in 2005-06 which remained unchanged.

He said the government was considering withdrawing exemption to self-occupied house on 5,000 square yards from the property tax.

The minister said that Rs477.45 million had been allocated for strengthening local governments against performance grants.

He said an amount of Rs600 million had been earmarked as performance grant to be given in sectors of water, education and health.