TC May-Jun 2022 Issue

TRADE CHRONICLE
Sindh Chief Minister Murad presents
a deficit budget with a Rs 1.71tr outlay
Sindh Chief Minister Syed Murad
Ali Shah — also the provincial
finance minister presented a
provincial budget for the next fiscal
year with a total outlay of Rs1.714
trillion. Experts called it a “pro-poor”
and “tax-free” deficit budget.
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, 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
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
Balochistan presents a deficit budget
with an outlay of Rs 613bn budget
The Balochistan Finance Minister
Sardar Abdul Rehman Khetran
presented a deficit budget
for the next fiscal year with a total
outlay of Rs612.79 billion. With the
provincial income estimated at
Rs540bn, the deficit would stand at
Rs72.8bn or around 12 per cent of the
outlay. The budget sets aside 5.7pc
and 3.7pc higher allocations for nondevelopment
and development heads,
respectively, compared to the original
estimates for the outgoing fiscal year.
In the budget for the outgoing year,
the provincial government indicated
a deficit of Rs84.7bn in its estimated
resources and expenditure, which
projects to curtail the originally
allocated provincial contribution to
the development plan from Rs172.5bn
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 for 2016, 2017, 2018,
2019 and 2021 at the rates admissible to
employees of the federal government
were being merged.
He also announced an ad hoc relief
allowance of 15pc of basic pay scales
to government servants from July 1,
and an increase of 5pc of net pension
would be paid to Sindh pensioners
from July 1, he said.
RELIEF IN SALES TAX: 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.
EDUCATION: The chief minister
said the Sindh government kept the
education sector at its top priority by
allocating Rs326.8 billion to the sector,
forming around 19pc of the budget
to Rs91.8bn by the close of
the year on June 30.
Thus, it is safe to assume
that the failure to take in enough
resources to fill the projected
deficit, the province is likely to cut
its development stimulus by a huge
margin next year as well.
In his budget speech, Finance Minister
Khetran said the government had
released Rs92bn for development
projects to complete ongoing and new
schemes during the current fiscal year.
The new budget sets aside Rs26.62bn
non-development funds for the health
sector, while Rs12bn would be spent
on development. Besides, Rs1.5bn has
been allocated for the pension and
support fund, Rs6.6bn has been issued
for providing medicines in all hospitals
of the province, and 524 new posts
May - Jun - 2022
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.
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.
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.
would be created in the health sector.
He announced that the government
had decided to increase the salaries of
the government employees by 15pc on
their basic wages as of 2017, besides
increasing pension by 15pc.
As for education, 103 new primary
schools would be established while
60 high and middle schools would be
upgraded to higher secondary schools,
and 831 recent posts of teachers would
be created.
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