The Sindh Finance Minister, Syed Murad Ali Shah on Friday unveiled a Rs 458.428 billion budget for the fiscal year 2011-12 before the Sindh Assembly with a surplus amount of Rs 882 million and Rs 457.546 billion expenditure. The provincial government adds no new taxes in the budget and spreads its development portfolio to Rs 161 billion.
All coalition partners except for the ANP and members from opposition side were present during the budget presentation. The ANP had already announced to continue the boycott of the Sindh Assembly until the government addressed its concerns.
For the new fiscal year, the Sindh's expenditure is higher by Rs 90.269 billion if compared with the revised estimates of Rs 367.277 billion of the current fiscal year. The budget expenditure for the next fiscal year is also higher by Rs 35.296 billion as against the actual budget estimates of Rs 422.251 billion of the current fiscal year. The Sindh province had revised its budget for the current fiscal year with Rs 13.8 billion deficit.
Total receipts are estimated at Rs 458.428 billion for the next fiscal year, which is Rs 105 billion higher than the revised estimates of Rs 353.472 billion of the current fiscal year. The province's total receipts for the next fiscal year include Rs 391.98 billion of current revenue receipts, Rs 27 billion of current capital receipts, as against Rs 283.14 billion of current revenue expenditure and Rs 33.3 billion of current capital expenditure.
The current revenue receipts include Rs 251.8 billion of federal tax assignment, Rs 54.9 billion of provincial receipts, Rs 25 billion sales tax on services, Rs 53.4 billion of straight transfer and Rs 6.7 billion of grants. The current revenue expenditure includes, Rs 146.27 billion of provincial government's expenditure, Rs 135 billion of local government expenditure and Rs 1.7 billion of school grants.
The current capital receipts are estimated at Rs 6.8 billion of local loans, Rs 8.6 billion of World Bank loan, Rs 944 million of EU commission grant and Rs 10.57 billion of ADP funding. Public accounts of the province estimated a surplus of Rs 5.5 billion with Rs 254.328 billion receipts and Rs 248.82 billion of disbursement. Public sector development programme (PSDP) receipts are estimated at Rs 142 billion for the next fiscal year as against the revised estimates of Rs 51.745 billion of the current fiscal year, showing an increase of Rs 90.26 billion.
Expenditure of PSDP includes Rs 131 billion of provincial annual development programme (ADP) and Rs 172 million of draught emergency relief assistance. For the next fiscal year, Rs 20 billion has been estimated for ADP of district governments, this amount has not been included in the fiscal budget estimates, as it will be financed through single land transfer from the federal government. During current fiscal year, Rs 18 billion were allocated for the district government ADPs.
Murad Ali Shah said the provincial government had added no new taxes in the next fiscal budget 2011-12 of total Rs 457.5 billion with estimated Rs 882 million of surplus amount. He said the government had widened its overall development portfolio to an "unprecedented" Rs 161 billion.
He said the Sindh government's development budget 2011-2012 with a total outlay was Rs 161 billion, as Rs 111 billion would be provided through provincial government's resources while Rs 20 billion would be provided through foreign project assistance including Rs 10.7 billion for ADB assisted flood emergency and reconstruction programme (FERP). He said Rs 9.7 billion would be provided by the Federal Government for federally assisted projects and Rs 20 billion would be the size of the development schemes proposed to be executed by district governments.
He said the country's macroeconomic situation had been "precarious" in the recent times, as inflation had touched double digits with surge in the fiscal deficit had cumulatively been the "key" problem for the government. "In order to arrest runaway inflation, State Bank of Pakistan has been pursuing a contractionary monetary policy. This measure coupled with the increased borrowings of government to meet out its deficit budget has led to crowding out of the private sector. The private sector investments as a proportion of economy are probably at their lowest compared to anytime during last 40 years," he informed the house.
He said the government cut its ADP to Rs 77 billion from the original Rs 115 billion to divert the funds needed for the rehabilitation of the catastrophic floods that had badly hit the province during the current fiscal year.
He said the floods affected around 7.5 million people and ravaged the crop area of about 2.5 million acres. "The economic losses have been estimated at Rs 454 billion; agriculture and housing sector being major affectees with losses of Rs 136 billion and Rs 134 billion respectively," the finance minister said.
He said the major flood related expenditure included Rs 4130 million for immediate rescue and relief, cash transfers of Rs 5870 million through Watan Cards, Rs 6500 million for rehabilitation of irrigation infrastructure (including Rs 2500 million from the federal government), Rs 554 million for repair of roads and Rs 2861 million for providing seeds and fertiliser to growers in flood affected areas (including Rs 1680 million from the federal government).
He maintained that a total of Rs 20 billion had been spent on flood related projects, which the government had not budgeted. He said despite the huge pressure on the Sindh's fiscal resources, the government is expected to limit its actual current revenue expenditure at Rs 250 billion against the budget estimates of Rs 268 billion.
Murad Ali Shah said the government was aware of the significance of the education sector to develop it for the better future of the nation. He said the government was supporting the initiative of districts with a grant of Rs 1.79 billion. "With the introduction of MFSS, non-salary budget of schools in Sindh would rise from current year's Rs 830 million to Rs 3, 670 million during next fiscal year; signifying a growth of 342 percent," he hoped.
He enumerated the government's "major achievements" during outgoing financial year: Rehabilitation of 1024 schools through an expenditure of Rs 2. 408 billion. Merit and need-based recruitment of 8000 teachers, distribution of free text books amongst four million students, establishment of 300 schools in previously un-served areas through private entrepreneurship. Another 700 schools would be opened under this initiative during the next academic year.
Besides, the government has released Rs 1, 078. 188 million to 40, 249 School Management Committees to promote grass root engagement in promotion of education. Provision of Rs 1071. 57 million to 380, 000 female students at Rs 2400-3600 per annum from class 6th to 10th to improve female retention in schools.
"The priority being given to education sector can be gauged from the fact that total recurrent budget for education including technical education has increased from Rs 22.8 billion during outgoing year to Rs 26.2 billion for fiscal year 2011-12; an increase of 15 percent. We believe that education is the key to changing the mindset that have hindered our development," the finance minister said.
The government has succeeded in establishing new universities in Lyari and Benazirabad. The classes at both the universities are expected to commence from September this year, he said.
The government has also achieved another goal to set up two engineering universities; one in Larkana and the other in Khairpur, he said adding, "four community colleges in collaboration with IBA Sukkur are being set up in Dadu, Naushero Feroze, Jacobabad and Khairpur. Two cadet colleges for girls are being established in Garhi Khuda Bux and Shaheed Benazirabad on the directives of honourable President besides two more cadet colleges for boys in Mithi and Kakar".
He said the government had increased allocation for the healthcare sector of the province "substantially". He said for the current year Rs 6.3 billion had been earmarked in ADP for the health sector, but floods made the government to revise the allocation to Rs 4.095 billion. "For the next year Rs 6.9 billion have been allocated for schemes of health sector", he said.
He said the government had initiated in the province a Hepatitis Prevention and Control Programme, in 2008 with allocated amount of Rs 2.704 billion. "Rs 850 million were released for this programme during the outgoing year through which 4000 patients of Hepatitis B, 40,000 patients of Hepatitis C, 300 patients of Hepatitis D and 1415 prisoners were treated," he added.
The minister said that to fulfil the energy demand the government had "major" focus on this sector, as development plan of Thar coal would ensure the "energy security" for the country. He said Thar coal reserves of 175 billion tons were ample for provision of cost-effective energy for centuries, besides producing petro-chemical products.
"The bankable feasibility study for JV project of Government of Sindh and Engro Group being executed through SPV of Sindh Engro Coal Mining Company was created to boost the potential in a record period of eight months. The GOS/GOP has included this project in the list of projects to be taken up with the Pak-China Joint Energy Working Group (JEWG), which was formed during the last visit of Prime Minster of Peoples Republic of China to Pakistan. Leading Chinese companies have shown interest in executing this project. As soon as the financing is arranged under the JEWG, the project would go into execution. The mining and power generation from this project is expected in 2015-16 depending upon the financing arrangements for the project," he pointed out.
According to rough calculations, he said, an amount of $1.20 billion was needed for the next five years to develop the required infrastructure for Thar. He said with the passage of 18th Constitutional Amendment, "mineral oil and natural gas within the province or the territorial waters adjacent thereto shall vest jointly and equally in that province and the federal government." He said the Sindh government had actively undertaken the process of creating its structure for oil and gas.
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