Punjab holds spending, Sindh hikes by 12pc
LAHORE/KARACHI: Punjab on Friday unveiled a Rs2.30 trillion budget, raising its current expenditure by a modest three per cent to Rs1.3tn for the next financial year, while Sindh presented a deficit-free budget of Rs1.217tr with a 15pc increase in salaries and pension of government employees. The Punjab government increased development spending by 47pc to Rs350 billion, and pledged to run a cash surplus of Rs232.9bn to meet a federal requirement to keep national fiscal deficit down at 7.2pc and make substantial changes in agriculture income tax and property tax regimes to mobilise additional revenues.
Presenting the budget in the Punjab Assembly, Finance Minister Makhdum Hashim Jawan Bakht claimed that the proposed budget was aimed at executing institutional reforms to change the administrative structure for laying the foundation for sustainable and fast economic growth to create jobs, remove regional development disparities and improve the quality of life of people.
He announced 5-10pc raise in salaries of government employees and increased the minimum wage to Rs17,500.
The low allocation of Rs350bn for development, which also includes foreign project assistance of Rs18.2bn, in spite of availability of financial resources and its pledge to produce a huge cash surplus instead indicate that the government of Chief Minister Usman Buzdar has chosen to follow the federal economic stabilisation policy aimed at contracting the economy instead of pursuing rapid growth as envisaged in its Punjab Growth Strategy 2023.
Both provinces hike minimum wage, govt salaries; acknowledge austerity as need of the hour; growth to be sacrificed
The budget also plans to attract private investment of Rs42bn under the public-private partnership mode for building infrastructure in the province, which is 12pc of its budgeted development expenditure.
The provincial government expects its share from federal tax divisible pool to grow by a quarter to Rs1.6tr while projecting a modest increase of 7pc in its tax revenue to Rs294.9bn from a year ago. A major chunk of tax income will come from provincial sales tax on services and urban immovable property tax. The province has estimated its non-tax income to be around Rs93.4bn, which includes payment of net hydel profits of Rs32bn by Islamabad.
The minister announced that the provincial cabinet members had agreed to voluntarily cut of 10pc in their salaries in line with the austerity measures implemented by the federal government and the armed forces. The major provincial current spending comprises pay and pension expenditure of Rs582bn, debt (principle) repayment of Rs49bn and an expense of Rs279.2bn on service delivery. The local governments will receive Rs437bn for meeting their own expenditure.
The government has allocated Rs9.8bn for its social protection programme — Punjab Ehsaas Programme — to provide cash support to the elderly, disabled persons, orphans, widows, transgender people and government employees who lose life in terror attacks.
The minister also announced steps being executed for industrialisation in the province, to improve health and education facilities and develop agriculture and irrigation sectors for speeding up economic growth over the next few years. He announced several projects relating to healthcare, education, infrastructure, water and others for the backward districts of south Punjab.