KARACHI, Jun 15 (APP): Sindh Chief Minister Syed Murad Ali Shah on Tuesday presented Rs 1.477 trillion tax-free budget for the next financial year 2021-22 amid protest by the opposition on the floor of the provincial assembly of Sindh.
The chief minister, who also holds the portfolio of Sindh Finance Minister in his budget speech said that the development expenditure of the province was estimated at Rs 329.032 billion, which include Rs 222.5 billion for Provincial ADP and Rs 30.0 billion for Districts ADP. Foreign project assistance of Rs 71.16 billion and Rs 5.4 billion from Federal PSDP Grant for schemes being executed by the government.
He said, ‘I am pleased to announce that for next financial year we are not proposing any new tax.’
He said that the total budget outlay for Financial Year 2021-22 is estimated at Rs 1.477 trillion, as against budget estimate of Rs 1.241 trillion for the FY, showing overall increase of 19%. The current expenditure of the province is projected at Rs 1.14 trillion, which includes current revenue expenditure of Rs 1.089 trillion and current capital expenditure of Rs 59.49 billion. This is 78% of total expenditure of the province and shows an increase of 14% over estimates of Rs 1 trillion for last year.
It is important to highlight here that for the next financial year; we have tried to align our Development as well as non-development expenditure priorities in line with the post COVID- 19 situation.
The total receipts of province for Financial Year 2021-22 are estimated at Rs 1.452 trillion as against budget estimate of Rs 1.22 trillion for the FY, showing overall increase of 19%. Receipts from Federal government on account of revenue assignment, straight transfers and grants are estimated at Rs 869.68 billion, which constitute 72.5% of total receipts of the province. It is an increase of 12.6%, over estimates of Rs.760.3 billion last year.
However, the budget estimates of straight transfers for next FY have decreased substantially by approximately 20.6% to Rs 49.5 billion from the budget estimates of Rs 62.34 billion of the fiscal year. Receipts of Federal PSDP are estimated at Rs 5.37 billion.
Receipts on account of Foreign Project Assistance (FPA), budgetary support loans and grants are estimated at Rs 71 billion. Receipts from provincial own sources on account of tax and non-tax receipts are estimated at Rs 329.033 billion, which constitute 27.5% of total receipts. This is an increase of 4.8% over estimates of Rs 313.4 billion of current FY.
Murad said that 1033 schemes had been identified for the next financial year 2021-22 for
completion in first and second quarter and maximum resources will be provided for their timely completion.
On-Going schemes with remaining throw-forward up to Rs 100 million have been fully funded for completion by June, 2022. On-Going Schemes where 70% expenditure is made have been fully funded for completion by June, 2022.
He said that the preparation of this budget was undertaken in circumstances like never before. The economic meltdown due to Covid-19 and inflation has severely affected the lives of ordinary citizens.
He said that, ‘We have introduced Citizens’ Budget to improve citizen’s access to budgetary information with the objective to promote accountability and transparency in public financial management. It presents the provincial budget in a simple and lucid manner, highlighting its salient features and making it easy for the common man to understand.
This will empower citizens to hold their elected representatives and public officials accountable and thus contribute to good governance.’
He said that for the next financial year, we had created around 2600 posts.
The chief minister said that health remains a priority sector. After advent of Covid-19, the
government re-prioritized its allocation and earmarked maximum resources in 2020-21 for prevention, isolation, and treatment for Covid-19; besides, significant resources were also spent containing and mitigating the economic damage due to job loss and business closure.
He said that for the next financial year, an allocation of Rs 172 billion was proposed as against an allocation of Rs132.88 billion in 2020-21. For the new FY, the ADP of health is pitched at Rs 18.5 billion. The next financial year will witness an increase of 30% in total allocation for Health Sector including medical education.
Moreover, Rs 7.6 billion has been allocated in next financial year 2021-22 with an overall increase of 10% for 9 vertical Programs to combat/control Polio, TB, Aids, Lady Health Worker Program, Hepatitis control, and expanded program for Immunization and others.
He said that besides, Health Services, Medical Education were crucial for maintenance and
accreditation of standards in Health Services. Therefore, the Medical Education has received a substantial increase in its budget to produce the better human resource for Health & Medical Services. Following are some key budget benchmarks.
The overall 45% increase of Rs 2.846 billion is proposed in Medical Education by enhancing
its budget from Rs 6.294 billion to Rs 9.141 billion in budget 2021-22. He said that the ADP of Medical Education is pitched at Rs 1.15 billion for 2021 – 22.
Murad said that education was the single most important factor in the development of a nation. Thus the People’s government has allocated the highest percentage of resources towards education in the year 2021-22. It will see an increase of 13.5% over allocation of current financial year.
For the next financial year we proposed to enhance the budget for education to Rs 277.5 billion from Rs 244.5 billion, he added.
In FY 2020-21 the ADP allocation for Educator sector was Rs 21.1 billion. It comprised of school education, college education, universities, empowerment for persons with disabilities, and skill development. In FY 2021-22. the government has earmarked Rs 26 billion for the sector. For the next financial year 2021-22, the budget of School Education & Literacy Department has been increased to Rs 222.102 billion, compared with Rs 197.368 billion for financial year 2020-21.
For the next financial year 2021-22, the budget of College Education has been increased 11.8% to Rs 22.8 billion, compared with Rs 20.446 billion for financial year 2020-21.
For College Education Department, an allocation of Rs 4 billion has been proposed in
ADP 2021-22 for 43 on-going and 64 new schemes.
For next year we intend to provide Sindh Education Foundation Rs 10.75 billion, an increase of 13% over allocation of current financial year. In the Current Financial Year, the grant for public sector Universities was Rs 11.07 billion. For the next financial year, the volume of grant has been increased by 20% to Rs 13.314 billion.
He said that a strategy to encourage community driven economic activities, focusing on supporting home-based businesses, small and medium enterprises, a social protection and economic sustainability package of Rs 30.9 billion is proposed for the next financial year 2021-22.
The chief minister said that for the next financial year, an allocation for Women Development Department had been increased from Rs 348.581 million to Rs 571.975 million an increase of 64% whereas, Rs 320 million had been earmarked under Provincial ADP 2021-22, out of which Rs. 296 million were for ongoing and Rs.24 million were for new schemes. Some of the important schemes are Establishment of Women Development Complex, Sales & Display Centres Working Women Hostel Karachi and Women Complaint Cells across Sindh.
He further said that the Sindh government was fully committed to safeguard the rights of minorities as enshrined in the constitution of the Islamic Republic of Pakistan, under Article 25. The Department intends to complete 05 individual ADP schemes and expand welfare funds to 30,000 beneficiaries of minority communities during next FY 2021-22. Moreover, the department intends to start about 97 ADPs scheme worth Rs 1154 million in the financial year 2021-22.
Welfare of the marginalized sections of the society, being the top government priority, reflects in the budget of the Current Revenue Expenditure in which Social Welfare Department allocation has been allocated Rs.18.57 billion in the next financial year as compared to Rs.1.8 billion in 2019-20. The ADP for the next financial year is projected at Rs. 290 million (increase of 45% over ADP of Rs. 200 million of CFY).
He said that the provincial government believed that the provision of clean potable water to the residents of Karachi was its utmost responsibility. The provincial government, through KWSB, aims to competitively procure a private party to design, build, finance, operate and maintain the Karachi Hub Water Canal Project.
The chief minister in his speech on marble city project said that the project was under feasibility stage whereby GoS was working on development of marble city on 300 acres of land near Northern Bypass which was industry-specific SEZ. The project is expected to flourish industry of stone, granite and marble in Sindh. The project cost is estimated at Rs 6 billion.
Murad said that the Sindh government aimed to develop a Technology Park at NED University of Karachi to promote technical education, research and development.
We have all witnessed that during this pandemic, information technology had a crucial role in maintaining a sense of normality. Considering the significance, the feasibility study of the project was expedited and completed during 2020-21. The project cost is estimated at Rs 8 billion. The project is expected to be tendered in 3 months’ time.
While speaking on Tharparker tourism project, he said that the district Tharparker was one of Pakistan’s most beautiful natural environments had a tremendous potential as a magnet for tourism activities and revenue.
The tourism spots at Thar such as Nagarparker (Karoonjhar Mountains), Mithi, and Naukot Fort offer great potential to develop tourism activities. The project aims to establish world class tourism spots and activities to attract further greater number of tourists round the year.
He said that the province of Sindh led the entire country in Public Private Partnership and our project portfolio had grown up to Rs 400 billion.
The Sindh government initiated a mega skill development program namely Benazir Bhutto Shaheed Youth Development Program in 2008-09. In its thirteen years of existence, the Board has trained approximately 434,260 Youth which includes 246,426 males and 187,834 females in various employable trades through public and private sectors.
Sindh Technical Education and Vocational Training Authority (STEVTA) has enrolled 50,773 trainees and trained 20,457 across Sindh in the current financial year 2020-21.
Murad said that government of Sindh was determined to improve the conditions in Agriculture Sector. It contributes 15 to 17 % of wheat, 33 to 45 % of rice and 25 % of sugarcane of national production.
For the next financial year we propose to increase allocation for agricultural sector from Rs.14.8 billion to Rs.15.26 billion. In ADP, Rs.2.28 billion was allocated in CFY, whereas, in FY 2021-22, an amount of Rs.5 billion is kept.
‘Being a predominantly agricultural country, water is the lifeline of our country, and the Sindh government is mindful of this reality. Efforts were therefore underway to improve irrigation supplies and harness / conserve maximum quantity of water, he said adding that Irrigation Department had envisaged short term & long term development plans, which include Rehabilitation of Barrages; Rehabilitation, Protection & Capacity Enhancement of Irrigation and Drainage Networks and Conservation of Water through Lining of Channels & building Small Dams. Moreover, Rs 17 billion has been earmarked for 2021-22 in irrigation sector.
He said that our commitment to establish and maintain law and order was also evident from the fact that Home Department including police, jails, rangers. and other security agencies was the third largest department in terms of resource allocation with a share of 13% in total current revenue expenditure in FY 2020-21. Home Department has been allocated Rs 119.97 billion in next FY 2021-22 as against CFY budget estimates of Rs.113.87 billion; which is an increase of 5.4%.
He said that for industrial and economic development, it is imperative that the country is able to meet its energy demands. The absence of efficient Energy supply will have disastrous consequences for any economy, agrarian, trade and technological alike. Therefore, energy remains on top of development agenda for the dynamic leadership of Pakistan Peoples Party.
Budget Estimates for Current Revenue Expenditure of Energy Department are estimated at
Rs 23.26 billion, which includes Rs 21 billion for clearance of outstanding liabilities of electricity dues of various government departments pertaining to DISCOs such as KE, HESCO and SEPCO. The ADP for energy department is pitched at Rs 2.5 billion for FY 2021-22.
In order to tap the real potential of the Thar Coal, the development of the Coal Field was the top priority of the government. Many initiatives were taken some are achieved and others are in progress.
He said that Road Master Plan was being prepared for the next 20 years for the road network of the province this also includes survey of exiting 53000 Km road network. GPS coordinates of all roads will be included in the road database. On the basis of these features, Master Planning will be carried out for the next 20 years
The future programs also include construction of Hyderabad Southern Bypass, having cost of about US$ 1.0 (M). This project is also being initiated with the assistance of Asian Development Bank and most feasible alignment of 54 kms has been finalized.
He said that a modern city required a modern transportation system. Unfortunately, Karachi has still to call home a planned mass-transport system. For next year, we have allocated Rs.6.5 billion for procurement of Electric Buses. Also, Rs.304 million has been provided as 1st tranche for completing common corridor (BRT Green Line & BRT Red Line) in CFY. In CFY ADP, an allocation in the sector was Rs 6.5 billion, whereas, in year 2021-22 the allocation has been increased to Rs 8.2 billion.
He said that unfortunately, Karachi Metropolitan Corporation and District Municipal Corporations of Karachi have long been plagued with maladministration and poor resource generation. ‘We are striving for introducing a system with adequate checks and balances that ensures public service delivery.’
In view of immense significance of Karachi as a financial / economic hub of the country, the highest chunk of the foreign loan/PPP mode projects has been reserved for Karachi. Currently there are 1072 projects in ADP (Annual Development Program), Foreign Project Assistance and PPP (Public private partnership) mode in Karachi district for the total cost of Rs. 991.7 billion and an allocation for the next FY 2021-22 is Rs. 109.36 billion
Government of Sindh in collaboration with World Bank has initiated Karachi Competitive and Livable City of Karachi(CLICK) Project.
CLICK Project also aims to improve revenues of Local Councils of Karachi. With improved revenue generation, Local Councils would have more to invest on improvement of the city. Our generation on account of Property Tax does not commensurate with the potential of Karachi City. At present, we only collect around 2 billion from Karachi. Much smaller cities in our neighboring countries generate a much higher amount. Under the CLICK Project we have planned to undertake the property tax survey of Karachi City. It is expected that property tax potential of Karachi City is around 20 billion.
To improve urban spaces the project of Karachi Neighborhood Improvement Project (KNIP) has been underway at cost of Rs.10.26 billion. Under this project several sub-projects have been completed in parking, connectivity, improved infrastructure in targeted neighborhoods.
Murad said that to improve the quality of natural water bodies and elimination of sewerage being disposed- off in the fresh water bodies, the government has initiated the on-going scheme namely “Elimination of Sewerage Discharging in Irrigation Canals and lakes in Sindh Phase-I” costing Rs 3.764 billion was initiated in 2018 and its Phase-II, “Elimination of Sewerage Discharging in Irrigation Canals and Lakes in Sindh” costing Rs 3.573 billion has been taken up in the current financial year 2020-21. In current financial year about 12% of development budget was spent on water supply and sanitation schemes. For next financial year an ADP allocation for PHE department has been increased from Rs 11.36 billion to Rs 15.5 billion.
He said that for environment, forests and wildlife In current financial year, Rs 0.84 billion were kept for the sector, whereas, in next financial year 2021-22 an amount of allocation is more than three times than that of last year, it is Rs.2.7 billion.
The government has provided Rs.4.02 billion as relief grant and for distribution of compensation to the affectees of Monsoon during CFY. For 2021-22, an allocation of Rs.500 million has been kept for various relief measures. Government of Sindh has released Rs.1.19 billion for relief operation and procurement of relief items during the heavy rain of Monsoon to PDMA Sindh during CFY 2020-21. For NFY, Rs.1 billion has been kept for Relief activities.
Sindh government has released additional funds amounting to Rs.489.281 million to Rehabilitation Department for operation and maintenance of Mobile Diagnostic and Emergency Health Care Services in CFY. For 2021-22, funds amounting to Rs.556.863 million have been kept for that purpose.
He said that the output of Government is directly related to the performance of every individual employee. All the employees of government of Sindh have my gratitude. For next financial year we are proposing an increase on 20% in the basic salary of all employees.
For the welfare of the labor class and in line with increase in pay of government employees, the minimum wage rate is also being increased from Rs.17,500 to Rs.25,000 per month
In order to remove discrepancy and bridge the gap between gross salary and minimum wages i.e Rs.25, 000, a Personal Allowance is proposed for employees of Government of Sindh in BPS-01 to BPS-05. The fixed rate of Personal Allowance will be as under: BPS-01 Rs.1900/- per month, BPS-02 Rs.1500/- per month, BPS-03 Rs.900/- per month, BPS-04 Rs.250/- per month and BPS-05 Rs.250/- per month.
Moreover, 10% increase in pension is also proposed for next financial year 2021-22 for employees of Government of Sindh.
Speaking on the revised estimates for the 2021-2, he said that against an estimated budgetary amount of Rs.1,073.7 billion the revised receipts of the Province for Current Financial Year 2020-21 stand at Rs.960.4 billion. As mentioned earlier we are facing a shortfall on account of Federal Transfers. During eleven months of this financial year against budgeted receipts of Rs.696.944 billion we have only received Rs.623.619 billion.
Based on these figures we will be facing a shortfall of Rs.83.8 billion. Receipts of Federal PSDP are revised at Rs.8.302 billion; whereas revised Foreign Project Assistance stands at Rs.38.29 billion. The provincial tax and non-tax receipt is revised to Rs.242.9 billion against an estimated target of Rs.313.4 billion.
On the expenditure side the budget has been revised from Rs. 968.99 billion to Rs.954.4
billion.
The development expenditure is revised at Rs 160.3 billion against an estimated allocation
of Rs 232.94 billion. There has been a severe financial crunch due to reduced resources from federal government and low collection from provincial resources due to Covid. Provincial ADP which was Rs 228.0 billion in Year 2019-20 was reduced to Rs 170.0 billion in 2020-21. The revised estimates of current year’s ADP will be about Rs.113.0 billion.
Despite various constraints, stakeholder departments are likely to complete 460 schemes during 2020-21.By the end of CFY we will be able to spend 85% of the development budget that is 15% higher than last FY. It reflects on our growing capacity and our rational financial management.
Speaking on the fiscal measures, he said that the government of Sindh has taken a great step towards automation of tax collection systems. It has worked out a plan with State Bank of Pakistan under which tax collection will see increased automation as tax payers will be able to pay their taxes online through alternative delivery channel, a system under SBP, connecting with payers through a third party service provider for State Bank of Pakistan. Through this system we plan to integrate our revenue agencies directly with State Bank of Pakistan.
We plan to automate stamp duty collections, a major component of our tax collection stream in the next financial year. The planned automated system will be deployed using ADC under State Bank of Pakistan and is expected to increase our stamp duty revenues by about 100%. Board of Revenue is diligently working towards its implementation.
While concluding the budget speech, he said, ‘I would also like to thank the people of Sindh who have provided us with the opportunity to serve them. This budget is a reflection of their aspirations and a commitment on our part that we will make every effort to uphold the trust that people of Sindh have reposed in us.’