Representational image. PHOTO: REUTERS
With the announcement of the budget for the upcoming financial year, Punjab could be facing significant financial strain due to a lack of resources. In order to cope with the situation ahead of time, the provincial government has formulated a new strategy and has clarified its priorities in relation to the allocation of funds in different sectors.
The provincial government has also extended its conciliatory process to the public in the budget allocation plan, allowing people for the first time to suggest which areas should receive more funds.
Speaking on the matter, Punjab Finance Secretary Abdullah Sumbal appreciated the stance of the government for taking people’s recommendations on board regarding the prioritisation of sectors.
“For the first time, thousands of people belonging to different schools of thought came forward and suggested which sectors should be given a priority,” he said. “According to the suggestions, people want the health sector to receive maximum funds, followed by the education department, the police department, and the industrial and agricultural sectors.”
He said that the recommendations have been included in the budget by the government and the allocation of 55 per cent of the budget has been decided. Meanwhile, the government is gradually determining the allocation of funds for other departments.
“Unlike the past when funds were allocated to different sectors without prioritisation, the Punjab government has now come up with a sound strategy and is funding the departments in a very good manner,” he said.
As Punjab and other provinces have received fewer resources from the collected revenue, the government has estimated that under the National Finance Commission (NFC) award, Punjab would receive Rs1.43 trillion.
Per sources, the maximum budget will be allocated to different sectors for the whole quarter so that work in required areas can continue without any hindrance. Once the budget has been allocated to the priority sectors, the remaining departments will be underfunded in the first quarter. Therefore, funds will be released to them on a monthly basis so that they could utilise them carefully.
The Punjab government is taking precautionary measures in case the coronavirus spreads in the province again or if there are floods or a dengue outbreak. In that case, the province needs to have enough financial resources in reserve to cover its expenses. Sources added that for the past three months, Punjab had been undergoing financial crisis because funds could not be obtained from the Centre, therefore, there are no funds in the reserve.
Apart from prioritising sectors and taking austerity measures, the government is also trying to reduce unemployment. For the purpose, funds will be provided to the industrial, agricultural and livestock sector. In addition, to reduce the impact of coronavirus pandemic and give a boost to the provincial economy, the government has also decided to reduce provincial sales tax (PST) on services besides giving exemption on various services.
What’s more, the stamp duty in the construction industry has also been reduced and unlike the Centre, the provincial government is not allowing any increase in salaries of government employees and pensioners due to lack of resources.
Published in The Express Tribune, June 16th, 2020.
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