Punjab unveils Rs583.6b budget

LAHORE: It’s a budget designed to arouse the envy of the less developed provinces. For the fiscal year 2010-2011, the Punjab government has presented a Rs583.6 billion budget with a whopping Rs193.5 billion allocated for development.

On the revenue side, the PML-N government’s finance wizards have been equally optimistic. The province hopes to net a total of Rs558.38 billion, of which Rs435.5 billion is expected to flow in from the federal divisible pool under the 7th National Finance Commission award. As for the rest, announced provincial finance minister Tanveer Ashraf Kaira on the floor of the Punjab Assembly, the government will collect Rs91.57 billion through taxes and make another Rs24.63 billion through non-tax revenues.

The minister said the government has estimated expenditures worth Rs386.78 billion and, excluding the Rs3 billion net public account deficit, the government will have Rs168 billion as surplus. “In addition, the government will get Rs12 billion through privatisation receipts, Rs2.6 billion from foreign project assistance and Rs680 million through federal grants,” said Kaira. These receipts and the surplus, explained the minister, will be funnelled into the Anual Development Plan.

Significantly, the minister did not touch the hot potatoes of Value Added Tax or agriculture tax. The PML-N has, on several occasions, voiced opposition to both, particularly VAT. However, the federal government insists VAT is here to stay.

Another interesting twist in the taxation tale is regarding the Capital Value Tax. In the federal budget, the centre imposed tax on property transfer in rural areas. The Punjab government, however, has seen fit to decrease CVT on immovable property from four percent to two percent.

Presenting the balanced budget, Kaira described it as people-friendly and tax-free.

Much of the emphasis lay on the subsidies, which have gone up by a record 40 per cent. The government has allocated Rs21 billion for subsidies, up by six billion from last year. And this money, said the minister, will be used for the sasti roti scheme, wheat subsidies, the Ramzan package and public transport.

Law and order have also received a generous allocation, given the harrowing effects of militancy the province has seen for the most of last year. Kaira said the government has allocated Rs49.2 billion to improve the law and order situation and increased the budget for the police department by 13 per cent.

But the jewel in the crown was the ambitious Annual Development Plan. While education got a meagre Rs23 billion – less than four per cent of the total outlay – and only Rs21 billion have been allocated for healthcare, the plan is sweeping in terms of both range and scale. The government will allocate Rs68.25 billion for the ‘social sector’, which is to include education, health, sanitation and social welfare. Kaira said the government will increase seats in engineering universities from 300 to 1,200 while medical colleges will provide an extra 1,000 places for aspiring doctors. Meanwhile, DG Khan, Sahiwal, Gujranwala and Sialkot are set to get a medical college each.

Additionally, some 800 primary schools are to be upgraded to middle-level and 200 middle-level schools will be converted to high schools. Kaira said the government has allocated Rs1.96 billion for IT centres in the province and also plans to upgrade school labs.  There’s also a seemingly innovative scheme to give 25 acres of forestry land to those who have studied agriculture.

Kaira also announced his government’s commitment to providing free medicine in large government hospitals and said Rs6 billion had been set aside for this. There are also plans to set up liver transplant centres in Lahore, Rawalpindi and Multan. The finance minister also promised Rs2 billion for emergency service 1122.

Another Rs9.5 billion is to be spent on the provision of clean water and sanitation. And the government is looking to spend some Rs2.2 billion on infrastructure development in Faisalabad, Rawalpindi, Sargodha and Gujranwala.

Significantly, there’s also focus on southern Punjab, a belt the PML-N has never looked at with much interest before. According to Kaira, the government will spend a staggering Rs52 billion on the development of southern Punjab only.

Meanwhile, in line with the austerity trend everyone seems to be espousing, Kaira said Punjab Chief Minister Shahbaz Sharif has decided not to use the 25 per cent of the budget allocated for the CM’s secretariat.

Published in the Express Tribune, June 15^th, 2010.