Sindh presents Rs1.2tr budget amid opposition’s protest

–Opposition members chant slogans against Zardari, rising corruption rate

–Education, health, law and order given top priority in budget

KARACHI: Sindh Chief Minister Syed Murad Ali Shah, who also holds the portfolio of finance minister, on Friday presented an Rs1,217 billion budget with zero deficit for the next financial year 2019-20 amid strong protest by the opposition members.

Moreover, the Annual Development Programme (ADP) for the next financial year is Rs283.5 billion which includes Rs.228 billion on account of provincial and district ADP.

Soon after the chief minister started presenting the budget figures before the House, the opposition members from Pakistan Tehreek-e-Insaf (PTI), Grand Democratic Alliance (GDA) and Muttahida Qaumi Movement-Pakistan (MQM-P) got up from their seats and started chanting slogans against Pakistan People’s Party (PPP) Co-chairman Asif Zardari and the rate of corruption in the province.

The opposition members were carrying banners and placards inscribed with various slogans against the provincial government.

The chief minister said that People’s Promise Programme, a programme for poverty reduction as pledged by PPP Chairman Bilawal Bhutto-Zardari in his election campaign, has also been unveiled in the budget. In the budget, the first priority in terms of budgetary allocations has been given to education, followed by health and law and order, he added.

REVISED ESTIMATES:

The chief minister said that the federal government has revised federal transfers from budgetary estimates of Rs665.085 billion to Rs631.543 billion, but such claims were misleading. He added that the federal government failed to assess its own fiscal position and erroneously communicated two different figures of revised federal transfers within a matter of days. “In the last 11 months, Sindh has received only Rs492.135 billion on account of federal transfers and it is anticipated that by the end of the financial year the shortfall would be Rs117.527 billion,” he said.

The chief minister said that the federal government blamed the Federal Board of Revenue (FBR) for poor revenue generation, therefore, he asked the federal government to authorise the provincial government to collect sales tax on goods on its behalf. “We believe that once devolved, the returns from sales tax on goods can be maximised as it has been done in case of sales tax on services,” he said, adding that the federal government has shown no real intent to develop consensus on 9th National Finance Commission (NFC) Award and the delay in the announcement of the award is at the expense of rights of provinces.

REVISED REVENUE TARGETS:

The revenue targets of the province have been revised from Rs243.082 billion to Rs240.746 billion. As a result, against an estimated budgetary amount of Rs1.123 trillion, the revised receipts for the current financial year stood at Rs963.699 billion.

The provincial government, as stated by the chief minister, had to cut down its development expenditure which now stands at Rs172.941 billion for the current financial year. This has affected the development endeavours of the provincial government. Many development schemes that could have been completed have been delayed due to non-availability of funds. Similarly, on the current revenue side estimates have been revised from Rs773.237 billion to Rs751.751 billion. The reduction in the current revenue side is primarily because of the severe austerity measures and strict financial discipline.

He said that during the financial year 2018-19, he had to cut on the operating expenses. The repair & maintenance budget of the departments have been substantially reduced from Rs27 billion to Rs11 billion. Also, the fourth quarter of the budget under operating expenses has been partially released.

The chief minister said that despite all the financial hardships, he tried to ensure that all health and educational facilities receive substantial budgetary allocations. “We have nurtured initiatives like SIUT, Indus Hospital, HANDS, Aman Foundation, Sindh Education Foundation, etc. so that service delivery is not compromised,” the chief minister added.

He said that due to austerity drive the government was able to revise its expenditure estimates from Rs1.144 trillion to Rs956.779 billion. As a result, the budget deficit for the current financial year came to be Rs16 billion against an expected Rs20.457 billion. “I must reiterate that we are able to control deficit only because of budgetary cuts as we timely adopted austerity measures,” he added.

BUDGET ESTIMATES 2019-20:

The total receipts of the province for the financial year 2019-20 are estimated at Rs1.217 trillion against estimated expenditures of Rs1.217 trillion. As federal transfers, the province is expected to receive Rs835.375 billion. Receipts from the federal government will account for 74.3 per cent of the total receipts. He said that the federal government has failed to achieve its target last year. “We have adopted the figures communicated to us by the federal government. We strongly apprehend that the federal government will not be able to achieve its target unless drastic structural changes are introduced. Failure to achieve its targets will create financial problems for the provincial government during the next financial year 2019-20. Our own provincial receipts are growing steadily and provincial revenue targets are increased from Rs243.082 billion in 2018-19 billion to Rs355.4 billion for the financial year 2019-20,” he added.

On the current revenue side, the expenditure is estimated at Rs870.217 billion which shows an increase of 12.5 per cent over the current year allocation of Rs773.237 billion. This increase in expenditure is primarily in the employee related expenses which could not have been avoided. Similarly, the impact of increasing utilities has been absorbed. “Our austerity policy shall continue during the next financial year. We have introduced major cuts in operating expenses. However, it would not be done at the cost of social sectors,” he added.

The chief minister also talked about the injustice meted out to Sindh in the federal PSDP. He said that the overall size of the federal PSDP was Rs951.0 billion with Rs127.0 billion of Foreign Project Assistance (FPA). “Out of the above portfolio, Sindh specific schemes are 50 both ongoing and new with an allocation of Rs33.7 billion,” he said, adding that the 12 schemes included in the federal PSDP 2019-20, which are by the Sindh government, have an allocation of Rs4.89 billion as compared to Rs15.0 billion in 2018-19 and Rs27.3 billion in 2017-18.

KARACHI PORTFOLIO:

The prime minister had announced a package of Rs162 billion for Karachi on March 30. There are only 19 Karachi based schemes with a total allocation of Rs12.1 billion. The new schemes for Karachi are only six with an allocation of Rs3.9 billion.

REVISION IN ADP 2018-19:

The Sindh government has made adjustments in the budget by reducing the size of the provincial ADP from Rs252 billion to Rs223 billion in the background of fiscal tightening and low transfers in the first quarter of the year. The finance department was able to release only Rs137.29 billion (till June 3) against provincial & district ADP. The release against the provincial ADP was Rs125.18 billion by this time. As against this total release, the total expenditure expected till the end of June 2019 is approximately Rs110 billion. “We acknowledge that the spending is even lower than releases and this is on account of delay and uncertainty which remained throughout the year, despite this situation, the provincial departments are expected to complete 453 schemes by June 2019,” he said.