The Sindh government Friday unveiled its fiscal plan for FY15 during which the Pakistan People’s Party-led coalition government tends to spend over Rs 686.17 billion.
The provincial government has readied a three-year “reforms plan” for resource mobilization. Under the plan, a tax reform unit would be set up in the finance department to be tasked to maintain linkages with all tax collecting agencies, legislatures, academia and other major stakeholders.
To relieve taxpayers, the provincial government tends to cut down by one percent the general sales tax (GST) on services to 15 percent from July 1. In FY15 the government expects to collect Rs 48 billion as sales tax on services.
The new finance bill also proposes a “reduced concessionary” levy of 5 percent on expansive and costly services provided by educational institutions, doctors and laboratories charging exorbitant charges. The inter-city transportation of goods in and from Sindh is also suggested to be made liable to pay 5 percent tax.
Through such measures the government expects its tax receipts swell to Rs 200 billion from current Rs 91.3 billion during next three years.
To improve law and order, the terrorism-hit province increased annual budget for the law enforcers by 20 percent to Rs 54 billion from FY13’s Rs 45 billion.
“This budget envisages further refinement in our policies and priorities,” Chief Minister Syed Qaim Ali Shah, who also holds the portfolio of finance minister, told the lawmakers while presenting the new financial plan to the desk-thumping Sindh Assembly.
The PPP-dominated provincial legislature reassembled here with a 45-minute delay against the scheduled time of 5pm under the chairmanship of Speaker Agha Siraj Durrani.
Compared to Rs 617.21 billion budget estimates of the outgoing FY13, the current proposed budget marks an increase of 10 percent or Rs 69 billion in monetary terms. The budget, Shah said, would lead the province towards a “vibrant economy” with equitable distribution of resources.
The budget envisages Rs 14.06 billion deficit. The revised deficit for FY13 stood at Rs 16.438 billion against Rs 21.637 billion of FY13 during which the government claimed to have completed 605 schemes, a “record” number.
The provincial government estimated its annual revenues and expenditures at Rs 672.118 billion and Rs 686.179 billion, respectively. Besides introducing the Sindh Finance Bill 2014, the leader of the house also laid the supplementary budget for FY2013-14.
The government has allocated Rs 168 billion under the head of Annual Development Program (ADP) which in FY13 was earmarked at Rs 185 billion. But of the budgeted amount the government could use Rs 115 billion only.
The total provincial development expenditure has been revised downward at Rs 215.358 billion from the outgoing year’s Rs 229.937 billion. Of this Rs 168 billion would be spent as ADP, Rs 24.884 billion as Foreign Project Assistance (FPA) and Flood Emergency Reconstruction Project, Rs 14.474 billion on account of other federal grants while Rs 8 billion have been earmarked for projects in Sindh to be funded by the federal grant.
The current revenue and current capital expenditures have been projected, respectively, at Rs 436 billion and Rs 34.729 billion.
On receipts front, the government expects to receive Rs 599.321 billion against FY13’s Rs 529.195 billion as current revenue receipts consisted masterly of federal transfers. The revenue assignment, straight transfers and grants to offset losses of abolition of Octroi Zilla Tax (OZT) have been budgeted at Rs 381.383 billion, Rs 82.62 billion and Rs 10.253 billion.
The provincial government has projected its tax-related receipts at Rs 125 billion, of which Rs 58 billion would be collected as tax receipts, Rs 48 billion as sales tax on services and Rs 18 billion as non-tax receipts.
Under the current receipts, including local repayments and loans, DPC/SWAP, World Bank, European Commission Grant and ADB funding, the government expects to receive over Rs 18.438 billion as against Rs 18.442 billion of FY13. Also, the government budgeted to receive Rs 47.358 billion compare last year’s estimates of Rs 44.937 billion on account of FPA, FERP and other federal grants.
The receipts side also shows a carryover cash balance of Rs 5 billion. The receipts and disbursements under the head of provincial public accounts have been targeted at Rs 2 billion, Rs 6 billion down from last year’s Rs 8 billion.
To make the budget popular, at least among government employees, Shah announced for government servants a salary raise of 10 percent, 10 percent ad-hoc relief, Rs 1000 fixed medical allowance for Grade 1-15 employees besides raising by 5 percent their conveyance allowance. The minimum wages have been increased to Rs 11000 “for welfare of labour class”.
Also, the minimum amount of monthly pension for the retired government servants has been set at Rs 6000. “We have been able to put together a budget that will lead us on the path of towards better infrastructure, investment conducive atmosphere, enhanced employment opportunities and balanced rural and urban development,” the chief minister told the house.
