KARACHI: Sindh unveiled a “pro-poor” and “tax-free” deficit budget for the next fiscal year on Tuesday with a total outlay of Rs1.714 trillion.

In his budget speech, Sindh Chief Minister Syed Murad Ali Shah — who is also the provincial finance minister — said the past year witnessed “extraordinary changes” at both national and international levels, which directly affected the common man.

“Despite that, the government of Sindh vows to leave no stone unturned to ensure economic and political stability in the province, contributing its shares to the common national effort, which is in line with the vision of the leadership of the Pakistan Peoples Party,” he said.

Compared to the Rs1.714tr expense, the next year’s budget estimates total revenues of Rs1.68tr, meaning a deficit of around Rs34 billion.

As for revenues, the province will get Rs1.055tr in federal transfers, whereas Rs347.5bn is estimated to come from tax, including Rs180bn provincial sales tax on services. Other revenue resources include non-tax receipts (Rs27bn), current capital receipts (Rs51.1bn), other transfers such as foreign project assistance, and federal and foreign grants (Rs105.6bn), carryover cash balance (Rs73bn) and net public accounts of the province (Rs20bn).

In contrast, a large chunk of expenses, around Rs1.2tr, will go towards current revenue expenditure, which refers to short-term costs used immediately or typically within a year. Other heads are current capital expenditure (Rs54.5bn) and development (Rs459.7bn), which includes Rs332.2bn provincial annual development programme (ADP), Rs91.5bn foreign project assistance (FPA), Rs6bn other federal grants, and Rs30bn district ADP.

SOCIAL PROTECTION: In his budget speech, the chief minister announced Rs26.85bn for the social protection and economic sustainability package.

PAY AND PENSION: He said the ad hoc relief allowances 2016, 2017, 2018, 2019 and 2021 at the rates admissible to employees of the federal government were being merged and a revised basic pay scale for civil servants of the provincial government was being introduced on the pattern of the federal government.

He also announced an ad hoc relief allowance at the rate of 15pc of basic pay scales to government servants from July 1.

“Disparity allowance at the rate of 33pc of basic pay will be paid to civil servants in BPS-1 to 16 and at the rate of 30pc to civil servants in BPS-17 and above in lieu of the differential rate of ad hoc relief allowances 2013, 2015, 2016, 2017, 2018, 2019, 2020 and 2021, which are being abolished from July,” Mr Shah said.

Noting that all provinces had yet to present their budgets, he said: “If they decide to increase the salaries of their employees more than the employees of the Sindh government, we will take decisions accordingly though the salaries and pensions of our employees are better than the employees of other provinces.”

He said Sindh government pensioners were already getting a 22.5pc increase in net pension than those of the federal government until February. Therefore, an increase at the rate of 5pc of net pension would be paid to Sindh pensioners from July 1, he said.

RELIEF IN SALES TAX: The chief minister said toll manufacturing services would be exempted from provincial sales tax. However, 5pc reduced tax rate for recruiting agents would continue for the next two years.

The tax rate on commission charges received by food delivery channels (such as Foodpanda and Cheetay) from home chefs has been reduced from 13pc to 8pc for two years, i.e. until June 30, 2024.

In all other cases, services provided or rendered by commission agents will continue to be taxed at 13pc.

EDUCATION: The chief minister said the Sindh government kept the education sector at its top priority by allocating Rs326.8 billion to the sector, which forms around 19pc of the budget outlay. Of this, the non-development budget has been raised to Rs292.6bn for the next fiscal year from Rs268.4bn during the ongoing year, whereas Rs34.2bn has been earmarked as the development budget for the school education department.

HEALTH: The total outlay of the health budget for the next fiscal year is estimated at nearly Rs207bn, covering primary, secondary and tertiary healthcare level services, preventive interventions as well as other communicable and non-communicable diseases. This budget is 14pc higher than Rs181.2bn allocated for the ongoing fiscal year.

LAW AND ORDER: The total allocation for the home department, including Sindh police and jails, has been increased to Rs124.9bn from Rs120bn this year.

IRRIGATION AND AGRICULTURE: The budget for irrigation has been increased from Rs21.23bn to Rs24.09bn. Allocation for the agriculture and irrigation department in ADP is Rs36.2bn.

WATER AND SEWERAGE: The water and sewerage sector has been allocated Rs224.7bn. The two major schemes of the city will be executed during the coming financial year, including the resettlement of the affectees of Gujjar, Mehmoodabad and Orangi nullahs at the cost of Rs9.4bn and Greater Karachi Bulk Water Scheme K-IV Augmentation Works for Rs511.7bn.

SOLID WASTE MANAGEMENT: Under this head, the provincial government has increased its budget from Rs8bn to Rs12bn for the next financial year and intends to expand the operations of the Sindh Solid Waste Management Board to other districts, including Hyderabad, Qasimabad, Kotri, Sukkur City and Rohri.

Ruckus in assembly

The budget session in the provincial assembly witnessed a ruckus as the lawmakers belonging to Pakistan Tehreek-i-Insaf (PTI) and Pakistan Peoples Party (PPP) involved in a scuffle, with one female member from both sides of the aisle accusing each other of stealing mobile phones.

The PTI members lodged a protest and gathered in front of the speaker’s rostrum, chanting slogans against what they called an imported budget.

The house echoed with slogans “imported hukumat namanzoor” (imported government not acceptable) and “imported budget namanzoor” by PTI members, who, like the previous year, did their best to interrupt the chief minister during the budget speech.

In a bid to move the PTI members away from the seat of the leader of the house, PPP MPA Mumtaz Jakhrani tore up the placards of the PTI and threw them at the opposition members. Mr Jakhrani and PTI’s Shahnawaz Jadoon also threw budget books and bags at each other.

Published in Dawn, June 15th, 2022