Subsidies to be hallmark

LAHORE: Subsidies rather than development projects are likely to be the key thrust of the Punjab budget for the fiscal year 2010-11. The overall outlay would be close to Rs560 billion with a Rs180 billion development plan.

Punjab Finance Minister Tanveer Ashraf Kaira will deliver the budget speech in the Punjab Assembly session due to start at 3 pm on Monday (today).

The hallmark of the budget would be continuity of Sasti Roti scheme, 50 per cent increase in salaries of government officials, Rs2,000 minimum threshold for pensioners, free dialysis, completion of ongoing development projects, Daanish School Systems and Punjab Endowment Fund.

Officials of the Punjab government said the provincial finance minister has not been consulted on budget-making exercise and everything was done at the Raiwind palace with ‘special assistance’ of former federal finance minister Ishaq Dar.

The finance department of the province remained a shuttlecock between the Punjab Civil Secretariat and the Raiwind palace of the Sharifs.

A senior bureaucrat said the Punjab government was in a fix after increase of salaries of federal government employees. “Long sessions were held in Raiwind to discuss just how to tackle the salary issue,” said a senior officer of finance department, adding that if there is a salary increase then the government has two options: either to slash development schemes or end subsidies. In his view, a cut in development schemes was more likely while subsidies such as Sasti Roti would continue.

Punjab Chief Minister Shahbaz Sharif wants to continue the Sasti Roti scheme at every cost while Daanish School System and Endowment Fund would be given special attention. However, the government would have to be careful in initiating new development schemes, as it could not pay full amount to its contractors the previous year.

“The province is already in deficit of Rs60 billion therefore starting new development schemes could halt other programmes,” said an official who played an active role in making the new budget.

In the outgoing financial year, the education and health got Rs30 billion and Rs22 billion, respectively, while in the current year the two sectors will get around Rs 36 billion and Rs 25 billion, respectively.

The minimum threshold for pension would be increased from Rs300 to Rs2,000 for individuals and Rs1,000 for families. The pensions would also be increased by 15 per cent for government officials who retired before the year 2000 and 20 per cent for those who retired after.

Published in the Express Tribune, June 14^th, 2010.