Rs 236.222 billion tax-free, deficit Sindh budget presented

Sindh Senior Minister Syed Sardar Ahmed presented a Rs 236.222 billion tax-free budget for financial year 2007-08 in the Sindh Assembly on Friday, with an estimated deficit of Rs 12.341 billion. The budget is around Rs 32.457 billion higher than the current year''''s revised estimates of Rs 203.795 billion.
The Minister in his budget speech said total revenue receipts were estimated at Rs 223.881 billion, reflecting Rs 20 billion increase against the overall revised revenue estimates of Rs 203.878 billion of current fiscal year but Rs 12.341 less than next fiscal year year''''s expenditures.
The Public Sector Development Programme (PSDP) has been allocated highest so far amount of Rs 61 billion, excluding Rs 10 billion of local governments. A sum of Rs 40 billion is meant for the provincial Annual development programme (ADP), Rs 10 billion for the district ADP (already transferred through single-line transfer), Rs 510 million for drought emergency relief assistance (DERA), Rs 1.078 billion for Sindh development social services programme (SDSSP), Rs 5.660 billion for foreign projects assistance and Rs 14.381 billion other federal grants.
The current revenue receipts of Rs 223.881 billion include Rs 81.717 billion from divisible pool tax transfers, Rs 7.144 billion federal special grant-in-aid, Rs 25.30 billion provisional receipts, Rs 20.381 billion districts grant including other grants and Rs 42.054 billion straight transfer.
In addition, Rs 2.2 billion receipts are estimated from local payments, Rs 6 billion from World Bank, and Rs 770 million grants from European Commission. The current revenue and capital expenditures have been estimated at Rs 174.593 billion in the budget for 2007-08 against the revenue and capital receipts of Rs 185.569 billion, depicting a surplus of Rs 10.976 billion in the next fiscal year.
Current revenue expenditures have been increased by Rs 22.416 billion to Rs 166.651 for the next fiscal year, while provisional expenditure shows a rise of Rs 6.14 billion to Rs 93.904 billion for 2007-08 as compared to Rs 84.756 billion revised budget of current fiscal year and local governments expenditures have been estimated at Rs 72.74 billion for the next fiscal year from Rs 59.478 billion, showing a rise of Rs 13.26 billion.
Capital expenditures are estimated at Rs 7.941 billion against Rs 12.363 billion of revised budget of current fiscal year. For 2007-08, public sector development programme (PSDP) receipts are estimated Rs 49.288 billion against total expenditures of Rs 61.629 billion (excluding local government). PSDP receipts comprise Rs 12.500 billion carryover balance, Rs 16.237 billion provincial contribution, Rs 510 million DERA, Rs 5.66 billion foreign project assistance and Rs 14.381 billion foreign grants.
On the state trading side, it is estimated that province''''s receipts would be Rs 11.536 billion against the expenditures of Rs 8.767 billion. Sardar said that there were still big infrastructure gaps that needed to be filled, especially in the secondary cities of Sindh, while another very conspicuous challenge confronted by Sindh was the state of property in rural Sindh as well as in its urban centres where social development has lagged behind.
He said that development allocation and spending in Sindh had increased phenomenally during last five years, beginning from 2002-03 when the total ADP was just Rs 7 billion. It has been taken to Rs 32 billion in the 2006-07 and now it has touched Rs 50 billion mark and, "if we count federal grants and foreign projects assistance, the total development outlay for the next fiscal year is around Rs 70 billion".
He said that Rs 26.442 billion has been allocated for general administration, Rs 19.145 billion for law and order, Rs 3.198 billion for community services, Rs 23.05 billion for social services, Rs 10.499 billion for economic services, Rs 1.725 billion as subsidies, Rs 9.176 billion for debt servicing, Rs 549 million other grants , Rs 120 million for other expenditures and Rs 72.474 billion for local governments--Provincial Finance Commission (PFC).
The Minister said that during next year the government would set aside over Rs 25 billion from provincial exchequer and invest appropriately on account of public liability and social sector responsibility, while the deposits in Sindh Pension Fund and Sindh Social Relief Fund would cross Rs 23 billion.
He said that Sindh government has adopt a very liberal policy of industrialisation in the provinces in which permission for setting up an industrial unit is granted expecting a few security and public safety related categories, he said.
He said that some 334 schemes worth around Rs 942 million, mostly relating to water supply, roads and livestock for drought affected areas would be completed next fiscal year, while another project namely increasing communication access to coastal belt of Sindh worth Rs 100 million would be started soon. He said that a Sindh coastal community decampment project with Asian Development Bank assistance of Rs 2.4 billion was being initiated, which would be completed within the next six years.
He said that under the special packages, Rs 5.6 billion has been allocated for Karachi, Hyderabad and rural development, out of which federal government would contribute Rs 3.3 billion. In addition, Rs 5.14 billion has been earmarked in the next ADP for both cities.
Regarding finance bill, he said that some changes had been made in the motor vehicle tax. Last year three categories of trucks/trailers up to 29,999 kg were unified to the levy of Rs 8,000 as motor vehicle tax, while now two categories are being made whereby vehicles up to 16,000 kg will have to pay Rs 6,000 and the heavier than it will pay Rs 8,000.
He announced to raise tax on the hotel industry and said that in view of the booming hotel industry the levies for hotel tax have been increased by 10 percent to 80 percent against previously 60-70 percent.
The licence fee for fishermen and boat owners is being reduced from varying rates and categories ranging from Rs 950 to Rs 2,000 to a flat rate of Rs 500 each. Likewise, Rs 100 has been fixed as licence fee for helper by abolishing the previous rates, which ranged between Rs 250 and Rs 625, he said.
In order to facilitate the commuters, the toll tax on Badin-Sujawal and Dadu-Moro Roads and Thatta-Sujawal bridges has been abolished, Sardar said.
He said that following Federal government announcement, salaries of all government employees have been raised by 15 percent, while Sindh government also has decided to the clerical employees of BS-5, BS-7 and BS-11 to promote them to BS-7, BS-9 and BS-14, respectively, following the federal government announcement.
In addition, the pension of government pensioners has been increased by two categories, as the old pensioners would get raise of 20 percent and new pensioners by 15 percent. Sindh government has raised the scholarship for postgraduate study by Rs 4,000 to Rs 10,000 from Rs 6,000, while around 15,000 teachers would be trained during next fiscal year, he said, and added that around 1,523 vacant posts of doctors would be filled.