KARACHI, June 15: Senior Minister of Sindh for Health and Coordination Syed Sardar Ahmad presented in the provincial assembly on Friday Rs236 billion budget for 2007-08, including a development outlay of Rs50 billion. The budget shows a deficit of Rs12.34 billion, with no hint about how the shortfall would be met.

The minister said that a record development programme of over Rs71 billion would be taken up in 2007-08. Of this Rs50 billion is part of the Sindh budget, including Rs40 billion to be provided by the provincial government and Rs10 billion by district governments. The remaining development programme components are foreign assistance projects worth Rs5.66 billion, Sindh Devolved Social Services Programme costing Rs1.07 billion and Drought Emergency Relief Assistance of Rs510 million. There are other programmes with more than Rs14 billion in federal grants.

While no new tax has been imposed in the budget, the senior minister announced a few adjustments and what he called rationalisations of a few provincial levies.

Instead of three categories of heavy trucks for payment of motor vehicle tax, the Sindh government has proposed two categories. Vehicles weighing 16,000kg would have to pay Rs6,000 while heavier vehicles would pay Rs8,000.

Hotel tax at the rate of 7.5 per cent of room rent per lodging unit per day will be levied at a flat rate of 80 per cent of the total lodging units, instead of 70 per cent.

A flat rate of Rs500 is being fixed for fishing licence and boat owners instead of varying rates that ranged between Rs950 and Rs2,000. Similarly, Rs100 is being fixed for ‘helper’ by abolishing the previous rates that ranged between Rs250 and Rs625.

The toll tax on Badin-Sujawal and Dadu-Moro roads and Thatta-Sujawal bridge is being abolished.

Syed Sardar Ahmad announced 15 per cent increase in salary of all provincial government employees. He also announced 20 per cent increase for old pensioners and 15 per cent for newly retired employees. The impact of the increase on the budget has not been mentioned.

Contrary to general expectations, the minister did not announce any fresh recruitment programme.

The budget proposes a current revenue expenditure of Rs166.65 billion against total current revenue resources of Rs176.59 billion. The revenue resources include Rs151.29 billion from Islamabad as Sindh’s share in federal taxes and on account of straight transfers. The provincial government expects to generate Rs25.30 billion, or about 15 per cent of current revenue on its own.

On the current capital side, receipts are pitched at Rs8.97 billion and the current capital expenditure is estimated to be Rs7.94 billion.

The budget shows a net surplus of Rs10.97 billion in current revenue and capital budget. A deficit of Rs12.34 billion is calculated after taking into account the full financing of Rs71 billion development programme for which Rs12.5 billion is expected to come from carryover cash balance and a provincial contribution of Rs16.23 billion.

The budget document shows a net surplus of Rs82.97 million in the overall current revenue and development budget during the current fiscal year against which the next year’s budget shows a deficit of Rs12.34 billion.

While claiming that the government had in the past five years made record development fund investment, the minister conceded that the state of poverty in rural Sindh and falling social indicators in urban areas were major challenges that remained to be tackled.

According to budget announcement, the general administration claims the highest share of Rs26.44 billion, followed by social services, Rs23.05 billion, law and order, Rs19 billion, debt servicing, Rs9.17 billion, and community services, Rs3.19 billion.

Referring to the development programme for 2007-08, Syed Sardar Ahmad said communications sector was assigned the highest priority with an allocation of Rs7.66 billion. One of the major projects is the 90-kilometre Sindh Coastal Highway.