ADP budget faces cut as Sindh worries about its shrinking share in federal pool

Sindh Chief Minister Syed Murad Ali Shah has said the Federal Board of Revenue (FBR) had earlier set a revenue collection target of Rs5.5 trillion for the current financial year, but now it is expecting to collect Rs3.9 trillion in which the share of the Sindh government has been cut down from Rs835 billion to Rs602 billion, showing a shortfall of Rs233 billion.

“This is a very serious situation in which a new strategy would have to be adopted to make both ends meet in terms of the payment of salaries, the growing health expenditure bill and non-development expenditures,” he said while briefing the provincial cabinet on Monday about the fiscal position of the province.

The cabinet meeting was attended by all ministers, advisers, the chief secretary, the chairman of planning & development, the principal secretary to the CM, and the secretaries of finance, forest, food, agriculture and law departments.

The chief minister, who was assisted by Finance Secretary Hassan Naqvi, said the FBR had at the onset of the financial year, 2019-20, had estimated a collection of Rs5.5 trillion, against which the share of the provincial government (FBR plus straight transfers from the federal government) had come to Rs835 billion.

“The budget was prepared according to the estimated share of the province, but the FBR due to the current scenario is expecting to collect Rs3.9 billion, and now our revised share would be Rs602 billion,” he said and added there would a shortfall of Rs233 billion, which was not a small amount.

Shah said that under the federal transfers (income tax, wealth tax, etc.), based on the FBR collections, the Sindh government was promised Rs716 billion by June 30, 2020, but now the amount to be transferred was expected to be Rs534 billion.

He said that keeping in view the present financial position, he had decided to cut non-development expenditures by Rs170 billion. “Our non-development expenditures are estimated at Rs870 billion from which I have decided to cut Rs170 billon – which means only Rs700 billion would be incurred,” he said.

Talking about the Annual Development Programme, the chief minister said it had also been cut down from Rs228 billion to Rs93 billion this year. Briefing the cabinet about the coronavirus situation, the chief minister said that it was spreading throughout the width and breadth of the province. “Right from Karachi to Kashmore and Karachi to Thar positives cases are emerging, which is not a good sign,” he said.