Sindh unveils Rs 577.983b tax-free deficit budget for FY2013

Sindh government Monday unveiled its Rs 577.98 billion tax-free budget in the Sindh Assembly for the financial year 2012-13, indicating a deficit of Rs 7.166 billion.
The budget deficit was attributed to a “massive jump” in development portfolio.
“I present this budget free of any new tax,” Finance Minister Murad Ali Shah told the desk-thumping provincial legislature called to order by Deputy Speaker Shehla Raza. Taking pride in making history by presenting the fifth consecutive fiscal budget by any democratically-elected government, the deputy speaker and the finance minister thanked the PPP’s coalition partners whose support had made it possible. One may see a political touch in the new budget by noticing certain figures, like a comparison of the development funds earmarked by the politically-embattled PPP-led coalition government during its five-year tenure, including Rs 231.174 billion of FY13, more than allocated by all previous governments from 1947 to 2007. “During five years in power, the PPP-led government allocated unprecedented Rs 644 billion for development… compared to this, the cumulative development spending from 1947 to 2007 was Rs 310 billion,” the finance minister said. The government’s ability to utilize the allocated funds, however, could be questioned, given the fact that the new budget document carries a huge revised “carryover cash balance” of Rs 32.606 billion against Rs 4 billion estimated in Budget FY1112.
This year, too, the cash-strapped Sindh government estimated to see its “carryover cash balance” accumulating to Rs 5 billion. According to Shah, the outlay of the new fiscal plan showed an increase of 26 percent or Rs 120.44 billion over the Rs 457.54 billion revised estimate of the fiscal year FY12. The current revenue expenditure is projected at Rs 315.301 billion, up by Rs 5.85 billion compared to Rs 309.458 billion of revised estimates for the current fiscal. The estimated current capital expenditure amounts to Rs 31.508 billion against the revised Rs 28.834 billion.
In the proposed budget, total revenue receipts have been estimated at Rs 570.81 billion, 24 percent higher than the current year’s revised estimate of Rs 458.42 billion. This 24 percent growth, however, decreases to 15 percent or Rs 75.389 billion when the total receipts are compared with FY12’s revised estimate of Rs 495.428 billion. Of the total receipts, the current revenue receipts amount to Rs 478.544 billion against. Of the current receipts, the federal transfers and provincial receipts, respectively, are expected to total Rs 381.910 billion against FY12’s Rs 323.183 billion and Rs 96.633 billion. The federal transfers include Rs 314.366 billion revenue assignment, Rs 59.252 billion straight transfers and Rs 8.29 billion grants to offset losses of abolition of 0.66 percent of Sindh’s share in the Octroi Zilla Tax (OZT). A collection target of Rs 32 billion has been set on account of GST on services, registering a growth of Rs 7 billion against Rs 25 billion of outgoing FY12.
The estimated increase of Rs 7 billion equates to the budget deficit for FY13, meaning the gap would be bridged through collecting more sales tax on services. Also, the calamities-hit Sindh government expects to receive Rs 41.189 billion on account of various levies, excluding GST on services, while Rs 23.44 billion would be raised as non-tax revenue. The budgeted Rs 28.199 billion current capital receipts include Rs 6.933 billion in local repayments/loans, Rs 9.081 billion receipts as DPC/SWAP and World Bank, Rs 1.01 billion as European Commission grant and Rs 11.170 billion as Asian Development Bank funding. Other receipts envisaged are Rs 18.470 billion as foreign project assistance, Rs 17.187 billion as Flood Emergency Reconstruction Project and Rs 14.516 billion as other federal grants.
The receipts and disbursements under the provincial public accounts have been projected at Rs 700.44 billion and Rs 691.54 billion, respectively. Proposing creating 20,000 new jobs in FY13, the provincial government proposed to spend Rs 111.96 billion and Rs 49.52 billion on education and health, respectively. A proposed sum of Rs 39.30 billion would be spent on the Sindh Police to maintain the prevalent poor law and order across the province. Concluding his budget speech, the finance minister said: “I hope the coming year brings prosperity for Sindh and may we continue to channel our resources in the most effective manner for the development of our province.”