Sindh struggles to increase revenue, relies on grants and loans
PHOTO: FILE
Despite efforts, the Sindh government has been unable to increase its provincial revenue and non-tax income, remaining heavily dependent on grants, foreign assistance, and loans.
In the upcoming financial year 2023-24, only 20.90 per cent of the total provincial expenditure will be covered by provincial revenue and non-tax income, while the remaining 79 per cent will be sourced from grants received from the federation, provincial share in federal taxes, foreign assistance, and loans.
During the outgoing fiscal year 2022-23, Sindh carried the burden of Rs358 billion from its provincial taxes and non-tax income out of the total expenditure of Rs1,765 billion. The rest of the expenses were met through grants from the federal government, provincial shares of federal taxes, foreign assistance, and loans.
As per the budget documents, the estimated expenditure stands at Rs136.256, with an overall income volume of Rs2,209.78 billion. The target for provincial taxes has been set at Rs202.90 billion, while Sindh expects to receive Rs235 billion from provincial sales tax on services. Non-tax income assessment for Sindh is expected to be around Rs32 billion.
Sindh's overall total income from tax and non-tax sources is projected to reach Rs.469.90 billion. To meet its financial requirements, the Sindh government plans to secure a loan of Rs36.13 billion in the next fiscal year.
In the outgoing fiscal year, Sindh had obtained loans amounting to Rs35.58 billion. Additionally, local repayments and loans are estimated to be around Rs6.132 billion, while the government is set to acquire a loan of Rs30 billion from banks.
According to the budget document, the federal government will provide more than Rs1,353 to Sindh, with Rs1,255 billion allocated as revenue assignment.
Published in The Express Tribune, June 12th, 2023.