KARACHI: The Sindh government unveiled on Monday its budget for the next financial year with a total outlay of Rs577.98 billion against estimated receipts of Rs570.82 billion, showing a deficit of Rs7.16 billion.

Presenting the budget in the provincial assembly, Finance Minister Syed Murad Ali Shah announced a development portfolio of Rs231 billion against last year’s Rs164 billion.

The budget documents indicate that priority will be given to education, health, clean water supply and development of alternative energy sources, particularly Thar coal power project.

Allocation for education has been increased by 50 per cent to Rs12.39 billion.

The health sector will get Rs49.52 billion and agriculture Rs13.69 billion, including ADP of Rs10.9 billion. Allocation for the water and drainage sector has almost been doubled to Rs7.5 billion.

To overcome electricity shortfall, an amount of Rs13.58 billion has been allocated for infrastructure development to expedite execution of Thar coal project, in addition to Rs654 million for the proposed Islamkot airstrip and water carrier from Nabisar to Thar coalfield with a capital outlay of Rs5 billion; Rs1 billion has been set aside for joint ventures for generation of power through alternative sources.

Rs11.58 billion has been allocated for supply of clean drinking water.

The minister said: “Despite a healthy 18 per cent estimated increase in revenues, the deficit is solely due to the massive jump in development portfolio which has been proposed at a historic Rs231 billion, up from Rs164 billion in 2011-12 indicating PPP-led government’s resolve to focus on poverty alleviation and result-oriented development.”

The overall development outlay includes ADP of Rs181 billion and Rs14.5 billion for federal projects.

Receipts from the federal divisible pool have been estimated at Rs314.36 billion, 24.8 per cent more than last year.

The receipts under straight transfers have been estimated at Rs59.25 billion against last year’s Rs53.4 billion and province’s own receipts, including sales tax on services, are estimated at Rs96.63 billion, 21 per cent more than last year.

The current revenue expenditure has been estimated at Rs315.3 billion, which is slightly higher than the revised estimates of Rs309.45 billon of 2011-12. This reflects the government’s resolve to curtail expenses through fiscal discipline.

The budget has proposed a 20 per cent increase in basic salary of government employees and pensioners as an ad hoc relief.

Mr Shah said the revised receipt from the federal government for 2011-12 is estimated at Rs323.17 billion as against budget estimates of Rs312.1 billion. Revised estimates from the divisible pool are Rs256.47 billion against budget estimates of Rs251.9 billion, whereas straight transfers are Rs57 billion as compared to budget estimates of Rs53.4 billion.

He said the provincial tax and non-tax receipts have been raised to Rs82.5 billion as against the budget estimates of Rs79.9 billion. This indicates successful implementation of government’s focused approach to increase province’s own resources through reforms in tax administration.

The government has decided against taxing the agricultural income.

The minister said the current expenditure for 2011-12 has been revised to Rs309.45 billion from Rs283.15 billion. The upward revision in the current revenue expenditure is due to the outside budget expenditure on emergency needs such as flood-related expenditures, including the issuance of Pakistan Cards to rain victims, purchase of physical assets for Sindh Police to improve the law and order situation, especially in Karachi, increase in salaries of employees and revision of pay package of police, nurses and the judiciary and increase in employees’ retirement benefits. The revised current capital expenditure is Rs28.83 billion against the budget estimate of Rs33.309 billion.

The total released amount for development activity stand at Rs122 billion. This includes Rs92 billion for ADP schemes, Rs21 billion for district portfolio and Rs9 billion outside budget development expenditure. Rs11 billion was released in federal grants and foreign project assistance stood at Rs22.84 billion. In addition, the amount spent on development activity but booked as non-development expenditure was Rs7.3 billion. Adding up the above, the release/expenditure on development activity during the current financial year is expected to be a record Rs163 billion.

The finance minister pointed out that during five years of the PPP-led government, Rs644 billion has been allocated for development, which includes Rs231 billion proposed for the next financial year while the cumulative development spending from 1947 to 2007 was only Rs310 billion.