Sindh presents Rs1.714 trillion tax-free budget

KARACHI: Sindh Chief Minister Murad Ali Shah has presented a tax-free budget of Rs1.714 trillion outlay for financial year 2022-23 as against the budget estimate of Rs1.478 trillion for last fiscal, showing an overall increase of 15.9 percent. It is a tax-free budget for the second consecutive year while the CM presented the provincial budget for the 10th consecutive year in a row and the fourth budget of the present government.

The budget included a 15 percent ad-hoc pay increase for government employees and a five percent increase in pensions. If other provinces increase salariesand pensions higher than Sindh, the province wouldmeet their level, the CM said.

At the start of his speech in the Sindh Assembly, Shah thanked Prime Minister Shehbaz Sharif but was not happy with the previous government. “We were not only subjected to an unfair treatment when it came to privileges but also received financial reprimand whenever it came to benefits to people of Sindh,” he said.

At this point, opposition members, mostly PTI legislators, started raising slogans against the PPP government and the coalition government at the Centre. They continued slogans and uproar till the end of the speech, which lasted around one hour. They also surrounded the seat of the CM, who was protected by the PPP legislators. Shah, annoyed with the slogans, slammed slogan mongering members.

The total receipts of the province for Financial Year 2022-23 are estimated at Rs1.680 trillion as against the budgeted estimate of Rs1.452 trillion for CFY, showing an overall increase of 15.7 percent. Receipts from the federal government on account of revenue assignment, straight transfers and grants are estimated at Rs1.055 trillion for the next financial year, which constitutes 62.8 percent of the total receipts of the province. It is an increase of 21.4 percent over the budget estimates of Rs869.680 billion last year. The receipts of Federal PSDP are estimated at Rs6.025 billion for next year. Receipts on account of Foreign Project Assistance (FPA), budgetary support loans and grants are estimated at Rs144.543 billion. Receipts from province’s own sources on account of tax and non-tax receipts are estimated at Rs374.5 billion. Shah said that the Government of Sindh has kept the education sector at its top priority by allocating Rs326.80 billion, which forms more than 25 percent of the total budget outlay of the Government of Sindh and is higher by 127 percent than last year. The health budget is allocated at Rs230.30 billion, more than 19 percent of the total budget outlay and higher by 96 percent than last year.

He said the provincial government had successfully combated Covid-19. “For the next financial year, we are targeting specific sectors including but not limited to health, law & order, infrastructure development, and revamping/rehabilitation of irrigation and drainage systems of Sindh with an objective to cope with the fast-changing climatic conditions in the agriculture sector,” he said.

Narrating relief measures, he said, “For the second consecutive year, we are not proposing any new tax. However, some taxes have been abolished by using the executive powers.” An exemption was proposed on the levy of Sindh Infrastructure Development Cess for export-oriented units in order to minimise the cost of doing business in the province. A pro-poor relief package of Rs26.850 billion is being launched in this budget. The government of Sindh earmarked Rs23.324 billion for wheat subsidy in next FY2022-23. In order to provide relief to the farmers, Sindh is offering the highest support price in comparison to the rest of the provinces, which is Rs2,200/40 kg of wheat. Highlighting major achievements of the Sindh government, the chief minister said that for the first time in the history of the country, appointment orders have been issued to 47,000 teachers in a single-phase, who passed through a merit-based recruitment process. In Karachi, the Green Line BRT–17.80-kms (funded by the federal government) has been operationalized with effect from December 25, 2021. Besides, the construction work on Orange Line BRT-4.77-km-long (funded under ADP Scheme) is near completion in the current financial year.

The government of Sindh has recently launched the Peoples’ Bus Service. Some 250 buses will operate on seven different routes in Karachi. For the procurement of 250 buses, GoS has spent Rs6.4 billion in 2021-22 and has allocated Rs4.0 billion in the next year’s budget.

Despite financial constraints, the GoS has assigned high priority to the urban development, especially in Karachi City, he said. Development projects in six major sectors which include Water Supply, Sewerage Treatment, Storm Water Drains, Solid Waste Management, Internal Roads and Mass Transit are underway in Karachi.

Out of the total 31 foreign-funded projects in ADP 2021-2022, seven projects costing Rs189.620 billion are specifically for Karachi. A total allocation of foreign-funded projects during CFY2021-22 was Rs71.164 billion out of which Rs35.290 billion were earmarked for Karachi projects only. Total allocation for Karachi-based schemes for the next financial year is Rs118 billion, which includes Rs72 billion under the provincial ADP, 05 billion under district ADP and Rs41 billion have been allocated under foreign-funded projects.

Murad Ali Shah thanked the federal government for enhancing this year’s allocation for Sindh in the federal PSDP up to Rs6.025 billion in comparison to last year’s allocation of Rs5.369 billion. “Though it still is a fraction of the total federal PSDP, at least it has improved in comparison to the last three years. During the last two financial years, 2020-21 and 2021-22, not even a single scheme of Sindh was included in the 66 schemes of the roads sector having an estimated cost of Rs903.320 billion,” he said.

Likewise, in the water sector, during the last three financial years, out of 59 schemes costing Rs158.520 billion, Sindh only got three schemes costing Rs1.2 billion. That is only a 0.79 percent share of the total cost of the projects. “Sindh has not been getting its due share in federally-funded projects for a long time,” he said.

For the last four years, allocations of Sindh have been recorded low, from Rs27.33 billion in 2017-18, it came down to Rs5.369 billion in 2021-22. The Government of Sindh had proposed 19 projects in agriculture, livestock & fisheries, health, education and transport under various Joint Working Groups of CPEC for inclusion but so far none of the projects has been put on the agenda of any working group.

The share of Sindh has been fixed at 6.483 MAF during early Kharif season, against water accord allocations of 8.292 MAF. The untimely supply of water is another major issue. Cotton sowing season in Sindh starts in April and in Punjab it commences in May, yet it faced 8 percent more shortages in comparison to Punjab during the month of April when our demand was higher at that time. “As of May, Sindh faced over 55 percent water shortage which has adversely affected our agriculture sector,” he mentioned.

Presenting revised estimates for the current financial year, he said that against an estimated budget amount of Rs1,335.168 billion, the revised receipts of the province for the Current Financial Year 2021-22 stand at Rs1,273.257 billion. “We have received Rs781.449 billion against budgeted receipts of Rs869.680 billion in the 11 months of the current financial year.”

For the next financial year, the size of the development budget will be Rs459.658 billion as compared to Rs329.033 billion in the year 2021-22, which will include Rs332.165 billion for provincial ADP and Rs30.00 billion for districts ADP. Shah announced that for the next financial year, the provincial government has created around 3,653 posts. The major chunk of jobs has been created in education and health departments.

Describing the law and order situation, he narrated that recently there have been a few very unfortunate terrorist incidents across Karachi. There were three blasts in Karachi Saddar area and one suicide blast on the premises of the University of Karachi, killing four people, including three Chinese nationals. These incidents have been extremely concerning for the Government of Sindh. “Consequently, we have made significant improvements in intelligence analysis by actively engaging all law enforcement agencies,” he said in the budget speech.

For the next financial year 2022-23, the total allocation for Home Department, including Sindh Police and Jails, has been enhanced to Rs124.873 billion from Rs119.98 billion during the current financial year. A 0.5 percent employment quota has been reserved for transgenders in police. Women police stations have been established in all districts of Sindh, 10 Special Investigation Complexes have been established, seven One Stop Women & Child Protection Centers have been established and a proposal for 24 new ones are with the Home Department for final approval.

The Sindh PPP (public-private-partnership) Project Portfolio is growing progressively with multiple projects in infrastructure, health, water, information technology, Special Economic Zones, education & urban development sectors and has developed a robust PPP Project pipeline in which key projects under the financial year 2022-23, besides others, include Malir Expressway Project, which is the biggest infrastructure project for Karachi 38.75-kms, six-lane, controlled access, now under construction and is expected to be completed in three years’ time. This will reduce the travel time from over an hour to 25 minutes.

Under social welfare schemes, the establishment of rehabilitation centres, for senior citizens across 30 districts of the province, is proposed along with the establishment of 28 orphanage centres and a purpose-built transgender centre in Hyderabad.