KARACHI, June 6: The new budget for the fiscal 2002-2003 will be tax-free and welfare-oriented with more emphasis on education, health and better living of the people.

This was disclosed by the Sindh finance minister, Abdul Hafeez Shaikh, while speaking on the new budget strategy at a meet-the- press programme of the Press Club.

Recalling the budget philosophy, Mr Shaikh said that in order to overcome the difficulties inherited from the past, the government had practised financial discipline, debt-receiving strategy, tax reforms and the direction of its priority is to facilitate the people.

In accordance to the strategy, the government, instead of increasing the number of taxes, had reduced them from 23 to 11 through rationalization.

Motor vehicle tax would be replaced by “Road users’ tax” so that all those vehicles registered in other provinces but plying in Sindh could be charged.

Referring to the circumstances inherited by the present government, the minister said that some of the problems were out of control such as reduced water flow in River Indus due to continuous dry spell for two years which had affected agriculture products and growth rate, followed by drought.

This was followed by an unprecedented rise in oil prices throughout the world during the last two years, forcing the government to revise POL prices upwards. He pointed out that the government had to deal with the IMF amidst the reputation of a country which offered only one tranch.

He said that in the past, every government used to reach an accord but after paying one tranch, violated it. But now, Pakistan had paid three tranches in two years, he stated.

Mr Shaikh said that the Sept 11 tragedy had affected the economy badly which reflected on the growth rate and was followed by recession all over the world.

These were unexpected events beyond the control of any government, he said, adding that the last decade for Pakistan was known as one of loss and a decade of disaster for Sindh.

The present government had inherited unpaid bills of Rs25 billion, but due to economic measures taken by the government which included ban on recruitment, foreign travel, medical treatment abroad, limited use of phone, power and petroleum for government officers and curtailing expenditure of furnishing offices with luxury furniture and air-conditioners, during the last two years the government had cleared bills to the tune of Rs20 billion.

Besides, he said, the Sindh government had an overdraft of Rs11 billion of the State Bank on which the government had been paying Rs100 million every month as interest. From June 1, the government had cleared this overdraft, saving Rs100 million from next month which could be utilized for the betterment of the people.

In addition to debt strategy, he said, the government had taken steps to use its resources in a better way. In this connection, he said that Property Tax, which had not been surveyed for the last 32 years, had been surveyed. As a result, 100,000 more units had been brought in the tax net and introduced.

The minister said that besides the 67 kinds of stamps duty in Sindh, 35 had been eliminated.

“Sindh is the first province where education up to secondary level in government schools has been made free and slip system in hospitals eliminated. The budget for free provision of books for primary education had been increased by 600 per cent and health budget had been increased by 20 per cent in the current year, which would further be enhanced in the new fiscal,” he stated.

The finance minister said that due to mismanagement and corruption, the World Bank had no interest in Sindh. However, after convincing them of the commitment to come to their expectations, the World Bank for the first time in the history of Pakistan, had agreed to provide Rs6 billion every year interest- free which will help to make Sindh into a model province on the pattern of Andhra Pradesh in India which had such an arrangement with the WB.

He said that this money would be utilized to clear federal government credit of Rs2 billion on which the province had been paying interest of Rs400 million annually at the rate of 17.5 per cent, which would be saved to spend on the betterment of the people. The remaining Rs4 billion would be provided for pension funds.

Mr Shaikh said that the new budget had been made in the backdrop of the devolution plan and a formula was being evolved by the provincial finance commission in which people from private sector had been inducted to determine the criteria and principles of distribution of funds between districts and the province.

Replying to questions, the finance minister said that the government did not like to overburden agriculturalists by imposing more taxes, but there are a few big landlords who ought to pay taxes like others. He said that at present, the province had been collecting Rs500 million from farm tax due to loopholes in the collection system.

The additional chief secretary (Development), Shahzado Shaikh, who was also present on the occasion, in reply to a question, said that in the past, mass transit scheme could not be taken up as it involved US$ 600 million. But now, the scheme had been split in three phases and consultants had been appointed who had made the presentation for its implementation.

These phases were revival of the Karachi Circular Railway, induction of 500 new buses in the private sector and light rail for which feasibility was being worked out with the help of the WB.

Regarding matters pertaining to the community of journalists, the minister promised to arrange a meeting with the Sindh Governor, Mohammedmian Soomro.

Earlier, President of the Karachi Press Club, Sabihuddin Ghausi, welcomed the guest speaker and highlighted the pressing problems of journalists, as well as the province of Sindh.

The meeting was conducted by the Secretary, KPC, Najeeb Ahmad.