LAHORE, June 6: The Punjab government plans to “rationalise” its annual development plan (ADP) for the next fiscal year by cutting it down to around Rs130 billion from the original estimate of Rs150 billion for the outgoing year, provincial finance minister Tanvir Ashraf Kaira told Dawn.

“I won’t say that we are decreasing the size of the provincial ADP for the next year from Rs150 billion. I say we are increasing it from what – almost Rs122 billion – the province spent this year on development,” he said, adding the original estimate of the provincial development plan for the outgoing year was ‘unrealistic’.

“The previous government inflated the revenue estimates as well as development spending for the outgoing year for gaining political mileage,” he said. “We shall be more realistic while making allocations and spend every rupee we budget for development in the province. We will avoid revision of the size of the development programme because it affects the process of development.”

Mr Kaira said the provincial government would finance its development programme by cutting non-development spending and improving its own tax revenue.

The minister said the coalition government of the Pakistan Muslim League-Nawaz and Pakistan People’s Party had also decided to review the two mega projects – the Lahore Mass Transit System and the Lahore-Sialkot Motorway – initiated by the previous provincial government.

“We don’t want money-making projects. If these projects are in the larger interest of the people and found helpful in overcoming traffic problems, we shall continue with them,” he argued.

He said the provincial government was not facing any problem in preparing its budget for the next fiscal year in spite of lower federal transfers on account of shortfall in tax revenue collection by the Federal Board of Revenue due to political turmoil and slowing economy during the current financial year.

Punjab has received seven to Rs8 billion fewer than Rs226 billion it had estimated to get from the federal government. “We will adjust our expenditure according to the drop in the federal transfers,” he said.

However, Mr Kaira said, the provincial government was considering a number of proposals to increase provincial own tax revenue through expanding the scope of sales tax on services, rationalising the existing provincial taxes and plugging leakages. The provincial government has already facing a 30 per cent shortfall in its targeted tax revenue collection for the present fiscal year.

The minister said the province would have to look toward multilateral donors for budgetary support if it had improved its tax resource. Also it could provide better services to the citizens. He said the tax revenue target for the next year would also be kept realistic and achievable. But he refused to say if it would be greater or lesser than the original tax revenue target for the outgoing year. “It would be realistic and definitely higher than what we have achieved this year.” He said the province needed to develop tax culture so that people did not avoid paying taxes. To a question regarding agriculture income tax, he said it could easily be doubled from its current level of Rs800 million just by facilitating the taxpayers.

Mr Kaira said the provincial government would enhance funding for the core social sector – education, health, water supply, etc – and try to involve public in the management of the programmes and spending on them. He said the new government was determined to providing better facilities to the people and preventing leakage of funds.