KARACHI: Sindh Chief Minister Syed Qaim Ali Shah on Monday presented the provincial budget for the 2013-14 financial year with an outlay of Rs 617 billion.

The budget session was being presided over by Speaker Agha Siraj Durrani.

The chief minister said Sindh would be receiving Rs 332 billion from the federal government.

He said that the focus of this budget was the optimal utilisation of the resources to achieve the objectives of socio-economic development. “To continue our march to progress, we have made a historically high allocation of Rs 185 billion for our Annual Development Programme (ADP). This reflects our resolve to bring significant improvement in the life of the common man by investing in health, education, infrastructure and human resource development.”

In his budget speech the CM said that the sales tax is insufficient and limited to a few service items and at the existing tax base it is not possible to achieve the desirable tax to GDP ratio in this sector. With a view to supplement the national efforts for achieving the NFC-desired tax to GDP ratio of 15 per cent by terminal year 2014-15 and also for equitably taxing the service sectors in Sindh economy, the provincial tax administrations need to be reformed and the tax base needs to be appropriately expanded, he said.

“With great pleasure I announce that Sindh will not increase the existing standard rate of 16 per cent.” He said that it will not only contain inflation but shall also not burden the consumers with extra tax or increase prices. “Although, our net receipts will decrease because of the inputs taxed by federation at 17 per cent, this loss of revenue shall be sustained in order to provide relief to the ordinary consumers of Sindh sales taxable services,” said the CM.

Qaim Ali Shah said that services of advertising agents, security agencies, commodity brokers, marriage halls and lawns, event management and public bonded warehouses are proposed to be levied. The services of security agencies would be taxed at 10 per cent instead of the standard rate of 16 per cent. Small marriage halls and lawns located on plots of 800 sq. yards or less would remain exempted. He said that some of the services provided under contracts or agreements are proposed to be specified as being liable to sales tax with a view to removing doubts, disputes and confusion about their tax status in view of the fact that tax is already levied on the services of contractual execution of work. He said that these services were specified in the amending provisions of the Bill in relation to the Second Schedule to the Sindh Sales Tax on Services Act 2011.

The budget allocates Rs 48.63 billion to law and order and also proposes the creation of 150,000 new jobs in the next five years.

Moreover, the budgetary allocations for energy and health are over Rs 21 billion and Rs 17 billion respectively.

Addressing the assembly, Shah said government employees falling within the Grade 1 to Grade 16 bracket are to get a 15 per cent increment on their existing salaries in the proposed budget. Moreover, the budget proposes the minimum pension to be Rs 5,000.

Shah said the government of Sindh was committed to improve the financial conditions of the province's poorest of the poor.