In the aftermath of the 2010 floods that devastated the province and gutted its development budget, the Sindh government announced a Rs457.5 billion budget that focused on developing the infrastructure of the province, taking care of the flood victims as well as improving the ability of the provincial government to deliver services.
Sindh’s Annual Development Program (ADP) has been set at Rs161 billion – compared to the current fiscal’s Rs115 billion (which was later revised down to Rs77 billion on account of the losses caused by last year’s devastating floods).
Presenting the budget before the Sindh Assembly, Finance Minister Murad Ali Shah said the government would focus on eight sectors, which had been given priority in its plans for the forthcoming year. Aside from the usual suspects including agriculture and livestock, water and drainage (irrigation), transport and communication, industries, education as well as health, the focus sectors this year will also include Thar Coal Housing and village and town rehabilitation.
In the ADP, Rs111 billion has been allocated by provincial government, while Rs20 billion would be provided through foreign project assistance, Rs9.7 billion would be given by federal government for federally-assisted projects and Rs20 billion has been allocated for development schemes to be executed by district governments.
NFC and the 18th Amendment
Shah further said that, after the promulgation of the 18th Amendment, estimated revenue receipts from the federal divisible pool for FY2011-12 stand at Rs251 billion, which is a 21% increase over the outgoing fiscal year.
He also highlighted the benefits incurred by Sindh after the 7th National Finance Commission (NFC) Award. He said that in the outgoing fiscal, which saw the first budget following the NFC Award, total federal receipts were estimated at Rs266.03 billion, compared to total federal receipts the year before (2009-10) which stood at Rs199 billion.
“Sindh has received around 34% more after the new NFC award,” he said.
He said that Sindh had achieved another milestone by legislating on General Sales Tax (GST) on services, following which the provincial government could collect the tax from July. He said that due to differences with the federal government on the matter, the collection of sales tax on services could not begin earlier.
He said that, for now, Sindh had allowed the Centre to collect the tax. He added that the province would get around Rs19.5 billion under this head from the federal government, compared to the Rs8.1 billion the provincial government received in 2009-10. “The NFC award has increased our collection of sales tax on service by 140%,” he said.
He further said that the share of local government has increased from Rs120.8 to Rs135 billion.
Devolution
The finance minister said that, after devolution, around 18 departments were being handed down to the provincial government. “We discussed this at the Council of Common Interests (CCI) meeting held recently in Islamabad. It has been decided that current expenditure of devolved institutions would be borne by the provincial government before 30 June,” he said.
The provincial government has allocated Rs1 billion to meet the current expenditure of the devolved departments. Further funding will be subject to approval from ECNEC.
Urban development
Regarding the uplift of cities, he said that the North Sindh Urban Services Corporation had been established under which water, sewerage and solid waste management services are being improved in 20 ‘secondary’ cities of the province. In addition, he said, the government would continue special packages for major cities including Karachi, Hyderabad, Larkana and Benazirabad.
Agriculture income tax
Shah told the Sindh Assembly that the collection target of Rs300 million was set to be achieved this year and next year’s target was to increase collection to Rs500 million.
Rationalising the ADP
The finance minister also announced a ‘rationalisation process’ in the ADP for 2011-12, according to which there would be a shift in focus from ‘development by schemes’ to ‘development by programmes’ in order to ensure efficient use of resources.
According to this plan, 710 schemes will not be included in ADP 2011-12, while another 250 schemes are expected to be completed.
During his budget speech, Murad Ali Shah also directed legislators’ attention towards what he called a major initiative in the shape of Sindh Land Development and Management Company. The initiative is aimed at the marginalised section of society under which housing schemes would be started. “A piece of land measuring 450 acres in the Hawkes Bay area (of Karachi) has been allocated and around 10,000 plots would be distributed among the poor,” he said, adding that Rs2 billion has been allocated for this purpose.
Shah further said that a ‘model zone’ worth Rs1 billion would also be set up for the production of dairy goods and Halal meat.
And finally, the floods
Finance minister Murad Ali Shah said that the government’s main focus would be the rehabilitation of flood-affected villages.
He said that Sindh was deficient relative to Punjab and Khyber-Pakhtunkhawa in terms of infrastructure– and, therefore, special emphasis was being given to physical development. “This is indicated by the fact that, overall, 60% of the ADP is devoted to economic and social infrastructure projects.
A major scheme for rehabilitation for 200 flood-affected villages consisting of 40,000 houses has been included in the ADP and an allocation of Rs2 billion has been earmarked for this.
He said that 11 billion rupees had been allocated for road sectors. On education, he said, “Rs7.733 billion, which is 5.1% of the overall ADP, has been allocated,” he said.
The health sector will receive Rs6.930 billion, and the energy sector Rs3.71 billion.
Regarding the MPA priority program, he said that Rs4.060 billion was allocated during the outgoing year out of which 3.239 billion was released. “For the coming year, the allocation for the MPA priority program has been increased substantially to Rs7.720 billion.
Published in The Express Tribune, June 11th, 2011.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ