KARACHI: Chief Minister Sindh Murad Ali Shah Tuesday presented a “pro-poor” and “tax-free” provincial budget worth Rs1.71 trillion for fiscal year 2022-23 after his cabinet's approval.
According to the chief minister, the past year saw "extraordinary changes" both nationally and internationally, ultimately impacting the common man.
“Despite that, the Government of Sindh vows to leave no stone unturned to ensure economic and political stability in the province, putting in its share for the common national effort, which is in line with the vision of the PPP,” said CM Shah.
The chief minister prayed that Pakistan and its democracy be protected from the dangers and challenges that it is facing.
“May democratic forces always rise and shine in this country. May Almighty Allah bestow us with courage and ability to serve the people of our motherland.”
Key relief measures
Sharing the details of the budget, the CM said the total receipts of the provincial government for the next financial year would clock in at Rs1.67 trillion against the expenditures of Rs1.71 trillion which shows a deficit of Rs33.84 billion.
He further elaborated that the revenue receipts would include Rs1.055 billion federal transfers, Rs374.5 billion provincial receipts (Rs167.5 billion provincial tax receipts excluding GST on services, Rs180 billion provincial sales tax on services and Rs27 billion provincial non-tax receipts), Rs51.1 billion current capital receipts, Rs105.5 billion other transfers such as foreign project assistance, federal grants and foreign grants and Rs20 billion carry over cash balance and public accounts of the province.
He added that the provincial tax collecting organisations would achieve their collection targets such as Sindh Revenue Board (SRB) Rs180 billion, Excise and Taxation Rs1.20 billion and Board of Revenue Rs30 billion.
Regarding the expenditures, CM Sindh said that the current revenue expenditures for the next financial year would be Rs1.19 trillion, current capital expenditures will be around Rs54.48 billion, development portfolio Rs459.65 billion, including Rs332.165 billion provincial ADP, Rs30 billion district ADP, and RS91.467 billion Foreign Assistance Project (FAP) and Rs6.02 billion other federal grants.
According to the CM the provincial government, during the 11 months (July to May) of the outgoing financial year, has received Rs716 billion against a share of Rs732 billion which shows a shortfall of Rs16 billion.
Shah added that his government during the said period received Rs45 billion in straight transfers and in Octroi and Zilla Tax (OZT) by receiving Rs18.9 billion against a share of Rs19.7 billion.
Amid the ruckus, the CM Sindh continued to share the details of the Annual Development Programme (ADP) 2022-23, mentioning that the district ADP size has been kept at Rs30 billion as was done during the current financial year.
The chief minister disclosed that 4,158 schemes, including 2,506 on-going and 1,652 new schemes have been given an allocation worth Rs332.165 billion. He added that the on-going 2,506 schemes have been given 76% funds or Rs253.146 billion allocation and 1,652 new schemes have been allocated 24% funds or Rs79.019 billion.
The CM announced that 1,510 schemes would be completed in the upcoming fiscal year.
Moreover, Rs26.850 billion have been allocated for the pro-poor, social protection and economic sustainability package.
Moving forward towards the relief measures, the CM Sindh announced that the adhoc relief allowances 2016, 2017, 2018, 2019 and 2021 at the rates admissible to employees of the federal government were being merged and revised basic pay scale 2022 for civil servants of Sindh government was being introduced on the pattern of the federal government.
He also announced adhoc relief allowance at the rate of 15% of basic pay scales to government servants from July 1, 2022.
“Disparity Allowance at the rate of 33% of basic pay will be paid to civil servants in BPS-1 to 16 and at the rate of 30% to civil servants in BPS-17 and above in lieu of the differential rate of ad-hoc relief allowances 2013, 2015, 2016, 2017, 2018, 2019, 2020 and 2021, which are being abolished from July, 2022,” he said.
Shah announced that all the provinces have not presented their budgets.
“If they decide to increase the salaries of their employees more than the employees of the Sindh government, we would take decisions accordingly though the salaries and pensions of our employees are better than the employees of other provinces,” he said.
The CM said that the pensioners in the province were already getting a 22.5% increase in net pension than pensioners of the federal government till February 2022. Therefore, he said an increase at the rate of 5% of net pension would be paid to the pensioners of the provincial government from July 1, 2022.
According to Shah, after the announcement of 10% increase in net pension by the federal government in March 2022 and enhancement of the rate of increase to 15% from July 1, 2022, the pensioners of the Government of Sindh would still be getting 12.5% more of net pension compared to that of the pensioners of the federal government.
The chief minister also announced that the police constables posted on grade BS-5 will be promoted to grade BS-7.
CM Sindh announced to exempt of toll manufacturing services from Sindh services tax, adding that a 5% reduced SST rate for “recruiting agents” would continue for the next two years — meaning up to June 30, 2024. “This relief is proposed for Pakistanis aspiring to work overseas,” he further elaborated.
Shah said that the services provided by cable TV operators were levied at a reduced rate of 10%, and the existing relief was proposed to be extended for a further period of two years ending on June 30, 2024.
The cable TV operators are proposed to be exempted, including the cable TV operators in rural areas under the PEMRA License of the “R” category to be exempt from SST till June 30, 2023.
The rate of SST on commission charges received by food delivery channels from home chefs has been reduced from 13% to 8% for a period of two years ending on June 30, 2024. In all other cases, the services provided or rendered by commission agents shall continue to be liable to SST at 13%.
He further added that the existing exemption on health insurance services will continue further for a period of one year till June 30, 2023. GIZ, a German development agency, facilitating development projects in Sindh, has also been granted conditional exemption on sales tax on services as indirect relief to the public.
The chief minister said that his government has kept the education sector as its top priority by allocating Rs326.8 billion which forms more than 25% of total budget outlay. He added that the health sector has also been given top priority by pitching budgetary allocation at Rs230.30 billion which forms more than 19% of total budget outlay.
In the proposals for the upcoming budget, the Sindh government has adopted a policy to either establish a full-fledged university or a campus of a recognised public university in at least seven districts one each in Korangi, Karachi West, Keamari, Malir, Tando M Khan, Tando Allah Yar, and Sujawal.
Sharing details of these universities, he said that Korangi will have a University of Technology and Skill, Vocational/Industrial Development, while Karachi West and Keamari will have sub-campuses of this university. Malir will have a sub-campus of NED University. Likewise, Tando M Khan and Tando Allah Yar will be given sub-campuses of IBA Karachi or Sukkur IBA and Sujawal will have a sub-campus of Mehran University.
The total outlay of the health budget for the fiscal year 2022-23 is proposed at Rs206.98 billion, covering primary, secondary, and tertiary healthcare services, preventive interventions as well as other communicable and non-communicable diseases.
This year the health sector budget is 14% higher in comparison to Rs181.22 billion during FY22.
For the next financial year, the total allocation for the Home Department, including Sindh Police and jails, has been enhanced to Rs124.873 billion from Rs119.98 billion.
Irrigation and agriculture
The budget for irrigation has been enhanced from Rs21.231 billion to Rs24.091 billion. Allocation for the agriculture and irrigation department in ADP is Rs36.2 billion.
The water and sewerage sector will be allocated Rs224.675 billion in the financial year 2022-23. Two major schemes of the city will be executed during the coming financial year. The schemes include:
Re-settlement of affectees of Gujjar, Mehmoodabad, and Orangi Nallahs for Rs9.423 billion
Greater Karachi Bulk Water Scheme K-IV augmentation works for Rs511.724 billion.
The Sindh government has increased the Sindh Solid Waste Management Board’s budget from Rs8 billion to Rs12 billion for the next financial year 2022-23.
The chief minister said the government intends to further expand operations of Sindh Solid Waste Management Board to other Districts in the next financial year which include Hyderabad, Qasimabad, Kotri, Sukkur City and Rohri.
The budget allocation for the Social Protection Department has been earmarked at Rs15.435 billion. In order to improve the wellbeing and welfare of senior citizens, orphans, and the poor, several social programs are being initiated and financed from the next financial year.
Deputy Speaker of the Provincial Assembly Rehana Leghari expressed anger over the Opposition members for their "irresponsible" behaviour.
During CM Shah's speech, the Opposition leaders surrounded the speaker's dias and created a ruckus in the assembly while the PPP members stood around the chief minister.
Earlier, CM Sindh chaired a special session of the cabinet, also attended by all provincial ministers, advisers, special assistants, chief secretaries, principal secretaries and other officers concerned.
Speaking on the occasion, CM Shah, has held the finance portfolio with himself, termed the proposed finance bill as a “budget for the poor”.
“In this budget for the next fiscal year, steps have been taken for social security and economic stability,” he said, adding that this budget has been prepared after consultations with all relevant stakeholders and cabinet holders.
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