Sindh Finance Minister Syed Murad Ali Shah Friday has released the tax-free provincial surplus budget having a ‘record’ outlay of Rs457.546 billion for financial year 2011-12. As required by the resource-constrained federal government the Sindh government came up with a fiscal plan envisaging a surplus of Rs882.1 million. Last year, FY11, the provincial budget had showed what Advisor to Sindh Chief Minister Dr Kaiser Bengali had dubbed it a ‘conservative’ deficit of Rs25.153 billion.
The Budget 2011-2012 shows an increase of Rs35.295 million or 8.3 percent when compared with Rs422.251 billion of FY11 that, the provincial finance minister said, was making the new budget outlay a “record” one.
“This year’s budget has been achieved in the sprit of reconciliation and participatory politics, aimed towards the establishment of a just, equitable, egalitarian society,” Shah said while unveiling his government’s 4th budget before the 362-member provincial legislature amid earsplitting noise of applauses through desk-thumping. The budget session was called to order by Speaker Nisar Ahmed Khuhro at the Assembly Secretariat at 5pm.
The fresh budget is ‘free of any new taxes’, especially that on agriculture income. ‘I am pleased to be presenting this budget free of any new taxes,’ the finance minister told the packed audience. The announcement might have poured cold water on expectations of the cash-strapped federal government which, in Federal Budget FY12, had refrained from taxing the farming incomes and had put the ball in the court of provincial governments perhaps to avoid a possible political backlash.
The development portfolio for FY12 stands at the ‘unprecedented’ Rs 161 billion, up 5.2 percent or Rs8 billion from FY11’s Rs153.085 billion that had included Rs135.085 billion as provincial PSDP, foreign project assistance and other grants and Rs18 billion of the district governments’ ADP.
“The overall development portfolio is an unprecedented Rs161 billion,” Shah said. The finance minister said the devastating floods last year had forced his government to curtail its non-development expenditure by a ‘sizeable’ amount and to revise the ADP to Rs77 billion from the original allocation of Rs115 billion. A breakup of development spending for FY12 reveals that Rs141.090 billion would be spent under Public Sector Development Program (PSDP), foreign project assistance and other grants while Rs20 billion would go to the ADP to be undertaken by the district governments.
In the proposed budget, total revenue receipts have been estimated at Rs458.4288 billion, registering a growth of 15 percent or Rs61.331 billion when compared with Rs397.097 billion of the outgoing FY11. The current revenue receipts include Rs251.861 billion under revenue assignment, Rs54.906 billion under provincial receipts, Rs25 billion under provincial sales tax on services, Rs53.445 billion under straight transfers, Rs6.771 billion under grants to offset losses of abolition of OZT and zero production bonus (special grant). On the current revenue expenditure front, Rs146.276 billion have been allocated for the provincial government, Rs135.171 billion for the local governments and Rs1.7 billion for the Tied Grant to DSGs for Schools Specific (non-salary).
The government envisages its current capital receipts and expenditures to aggregate respectively at Rs27.003 billion and Rs33.309 billion. Sindh government expects to receive Rs6.881 billion, Rs8.6 billion and Rs943.9 million and Rs10.578 billion on account of local repayments/loans, DPC/SWAP, World Bank, European Commission Grant and Asian Development Bank. Under the provincial public accounts a surplus of Rs5.5 billion has been eyed in view of Rs254.328 billion receipts and Rs248.828 billion in expenses.
The new budget also provided welcome news for provincial government employees and pensioners as the finance minister announced that the budget would follow the precedent set by the center in terms of raising pay scales, allowances and pensioners of the former.
The federal government, in Budget FY12, announced a 15 percent increment to the government employees and pensioners.
“Keeping in mind, the decision of federal government, it is proposed that government of Sindh may adopt the same for increase in pay, allowances and pension of its employees,” Shah said. In his budget speech, the finance minister slammed the ‘sham democracies’ of the past for their ‘mismanagement’ of economic affairs that, he said, had rendered Sindh as ‘disadvantaged’ and ‘deprived’ despite contributing 46 percent income and 53 percent sales tax to the national kitty.
Shah also pointed out Sindh’s status of being the country’s ‘most urbanised’ province, which had come at a rapid pace, putting considerable strain on the existing urban infrastructure of the province. “Sindh has the highest concentration of urban population at 49 percent as compared to an overall country average of 32.5 percent,” he stated. The finance minister also dwelt on the country’s macroeconomic situation that, remained ‘precarious’. “Double digit (currently 15 percent) inflation and rising fiscal deficit (over four percent targeted for FY12) have been the key problems,” the minister stated. Minutes before the speaker called it a day the finance minister moved a motion to introduce the Sindh Finance Bill 2011-12 before the house to be taken up for consideration in the post-budget sittings.
