LAHORE, June 16: Punjab’s coalition government announced on Monday its first revenue budget of Rs389.896 billion for 2008-09 and set aside Rs17 billion for pro-poor subsidies.
The budget carries a revenue surplus of Rs 133 billion and the expenditure is estimated at Rs257 billion.
“The subsidy package — meant for cash handouts for the marginalised, and food price, healthcare, public transport and other subsidies -- is part of the expenditure estimates,” finance minister Tanvir Kaira said in his maiden budget speech in the Punjab Assembly.
He also tabled a finance bill proposing to tax all forms of transfer of immovable property, whether through sale, exchange, gift or mortgage, and transfer of right or interest relating to an immovable property by a development authority, housing authority, statutory body, cooperative housing society, company or a developer/builder.
The bill also proposed imposition of a one-time levy on imported luxury cars with engine capacity of 2000cc and above to boost revenues.
The PML-Q boycotted the budget speech in protest against the delay in issuance of an order by the speaker notifying its leader, Chaudhry Zaheeruddin Khan, as leader of the opposition in the assembly.
The subsidy package included Rs13 billion for cash handouts, and food price and healthcare subsidy to the poor. The finance minister, however, did not spell out the size of cash handouts to be disbursed among the poor.
The rest of the funds have been set aside for subsidising public transport and agricultural tube wells and writing off housing and agricultural loans of poor widows.
The minister announced introduction of a free, air-conditioned bus service in seven major cities of the province for facilitating needy students. An amount of Rs1 billion will be provided to public transport in six cities with the help of the private sector.
He said Rs540 million had been set aside for setting up dialysis centres in the province.
In order to overcome the energy shortage, the Punjab government will set up projects to generate 350MW of electricity.
Mr Kaira said that price control boards would be constituted to protect the poor from rising prices of foodstuffs and other commodities and curb black-marketing and profiteering.
The government will launch a low-cost housing scheme for the poor with a sum of Rs1 billion and allow a subsidy of Rs100,000 per unit for the purchase of tractors to farmers with less than 12.5 acres of land under the Green Tractor Scheme, to be re-launched with a sum of Rs1 billion.
Landless, educated farmers will be given 60,000 acres of state land on lease for increasing production of vegetables and bringing down their prices.
The finance minister announced an Annual Development Programme of Rs160 billion, which is 6.6 per cent higher than the budgetary estimates of Rs150 billion for the outgoing year.
The share of district and TMA in the ADP, however, remained unchanged at Rs12 billion, although they, according to the revised estimates, had received Rs14 billion this year.
The development programme, Mr Kaira added, would be financed from the revenue surplus of close to Rs133 billion, capital account surplus of Rs13.593 billion, net public account surplus of Rs1.22 billion and foreign assistance (loans) of Rs12.237 billion.
SELF-RELIANCE: He said the government had been trying to reduce its dependence on foreign loans for financing development plans. “We are relying more on our own resources for funding development projects and have successfully managed to reduce the size of foreign assistance by Rs23 billion for the next year.”
The budget outlay for the next financial year is almost nine per cent higher than the outgoing year’s original estimates of Rs356 billion and 19 per cent higher than the revised estimates of Rs315.602 billion.
Punjab is projected to receive Rs285 billion in federal transfers, which is around 25 per cent more than budgetary estimates and almost 30 per cent higher than the revised estimates for the outgoing year. The hike in federal transfers to the provinces is projected on the basis of an increase in the tax revenue target of the federal government as well as in the provincial share in the divisible pool under the National Finance Commission (NFC) award.
The provincial own tax revenue income has been estimated at Rs40.362 billion, up by eight per cent from budgetary estimates of Rs37.315 billion and 31 per cent from the revised estimates of Rs30.627 billion. The provincial own non-tax revenue is estimated at Rs64.528 billion, down by about 30 per cent from the budgetary estimates and above one per cent from the revised estimates for the current year.
The expenditure for the next fiscal is five per cent higher than the original estimates of Rs243.487 billion and about 10 per cent higher than revised estimates of Rs232.187 billion for the ongoing year. “If the allocation for subsidies is put aside, the size of the revenue expenditure shrinks by Rs4 billion as compared to the original estimates for this year. We are providing money for pro-poor subsidies by reducing our current expenditure,” Mr Kaira added.
He said the Punjab government had decided to enforce fiscal discipline and improve governance by plugging leakages in the system. “The government will cut expenditures on official functions and has banned purchase of new vehicles, furniture, air-conditioners and other luxury items for government departments. A re-organisation committee has been set up to recommend steps for cutting unnecessary government expenditure.”
The minister’s speech was full of rhetoric and loaded with promises to establish social and economic justice in the province. “We have inherited several crises -- food crisis, judicial crisis, water and power crunch, etc, that have mostly affected the poor. But we are trying to handle them,” he said.
Mr Kaira said that in line with the chief minister’s policy statement, the Punjab government had decided to give the subordinate judiciary an allowance three times their basic pay scales. “We hope that it will improve their working and also expect the high court to purge the subordinate judiciary of all corrupt elements. Also, we expect that in future judges will be recruited in a clean and transparent way through the provincial Public Service Commission.”
He accused former LHC chief justice Iftikhar Hussain Chaudhry of making recruitments in violation of rules and merit. Mr Kaira promised to provide quality and inexpensive education and healthcare to the poor people and support the agriculture sector to boost output and said the government had enhanced allocations for social, industrial and agricultural sectors.
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