No new tax has been imposed, nor have the rates of the existing taxes been revised.
The government announced an increase in the salaries and pensions of its employees on an ad hoc basis, in line with the federal government’s decision.
Local governments will get Rs119.42 billion, compared to this year’s Rs106.482 billion.
The government hopes to save Rs108.638 billion from its revenue, Rs25.976 billion from capital account and Rs1.106 billion from public account, to partly finance the annual development programme.
Finance Minister Tanvir Ashraf Kaira presented the budget in the provincial assembly amid shouting and heckling by opposition members.
Tight security arrangements had been made around the provincial assembly for the session.
The estimated income of Rs423.511 billion is 8.6 per cent more than the current year’s estimates of Rs389.896 billion. The province hopes to receive Rs321billion as its share from the federal divisible pool, Rs4.625 billion in direct transfers and Rs11.122 billion in federal grants.
The remaining Rs86.74 billion will be raised from provincial resources — tax revenue of Rs49.647 billion and non-tax revenue of Rs37.093 billion.
The tax collection target appears ambitious in view of a collection of only Rs28.141 billion against a target of Rs40.362 billion in current year.
Analysts say that a sluggish economy could hamper efforts to increase tax revenue like I the current year in the absence of any new tax and revision of rates.
The non-development expenditure estimates, which include pro-poor subsidies of Rs26.7 billion, are up 22 per cent from the current year’s estimated expenditure of Rs256.948 billion.
Although the government has plans to cut non-development spending by Rs5 billion, it appears unlikely as the expenditure rose to Rs282.281 billion in the revised estimates for the current year.
Major non-development expenditures include Rs43.6 billion for law and order, including police; Rs11 billion for courts, prisons, fire protection, etc; Rs51.909 billion for economic affairs; Rs43.12 billion for agriculture, irrigation, forestry and fishing; Rs2.271 billion for housing and community development; Rs21.771 billon for health; Rs22.384 billion for education and services; and Rs46 million for environment protection.
The government will finance the province’s development expenditure which includes a Rs172 billion Annual Development Programme (ADP) and Rs3 billion Daanish School project from its savings of Rs135.7 billion, federal grants of Rs2.558 billion and foreign assistance of Rs10.471 billion.
The development budget indicates a wide resource gap in the form of an operational shortfall of Rs26.25 billion between financing and spending targets.
Analysts say the development programme appears unrealistic in view of the resource deficit. The situation may exacerbate if the province fails to achieve its tax collection target or if its share from the federal divisible tax pool is cut at the end of the year because of lower than projected collection by the Federal Bureau of Revenue (FBR).
‘The operational shortfall reflects unavailability of funds for the budgeted schemes at the time of presentation of the budget. This gap is filled by borrowing from banks or multilateral and bilateral lenders (through federal government) or imposition of new taxes,’ an official told Dawn. If it fails to arrange additional financing, the government will have to cut the expenditure on development.
The provincial planning and development department expects to spend less than 80 per cent of the revised development programme of Rs155 billion for the current year. According to Mr Kaira, the utilisation of the development budget could be around 60 per cent at the end of the year.
The minister mentioned several events and factors that had hampered economic growth and reduced revenue collection, including a deteriorating security environment, domestic and global economic slowdown and imposition of governor’s rule.
He presented a list of the Punjab government’s achievements: procurement of 5.8 million tons of wheat, financial assistance of Rs10 million and extension of medical services to displaced people in the NWFP, efforts for providing speedy and cheap justice to people, implementation of a Rs13 billion food subsidy programme for 1.3 million poor families, providing ‘sasti roti’ and improvement in health facilities.
He said the province would provide pro-poor subsidies to the tune of Rs30 billion, including an enhanced funding of Rs16.2 billion for the food support programme. He said the government intended to amend the law to ensure utilisation of surplus assets and funds under the control of the Punjab Cooperative Board for Liquidation for social sector development. ‘We will also constitute an authority for the utilisation of a subsidy of Rs7.5 billion for providing sasti roti to the poor and Rs2 billion to small farmers for buying tractors.’
The minister said the government would launch tax administration reforms and form an autonomous provincial board of revenue to improve tax collection and eliminate corruption.
‘We also plan to construct 200 small dams and begin work on the construction of the Khanki barrage,’ he said.
Major initiatives for the year include restructuring of public transport system and addition of subsidised CNG buses to the fleet; construction of apartments in each divisional headquarters at a cost of Rs2 billion for people of slum areas; provision of free medical treatment and medicines to the poor at the district and tehsil hospitals; provision of free land to homeless families for building houses; establishment of a knowledge park and city on 800 acres near Lahore; establishment of the Daanish School System and a centres of excellence authority for providing quality education to poor children; computerisation of laboratories in 4,286 high schools; initiation of prison reforms; provision of missing facilities at schools and colleges and renovation of old and construction of new college buildings; establishment of four new medical colleges and construction of emergency wards in 10 district headquarters hospitals with the facilities of CT scan and MRI; improvement in water supply and sewerage; and provision of wireless internet facility in public parks and libraries.
Mr Kaira said the government was giving attention to improvement of agriculture, livestock, forestry, wildlife and fish farming.
He said huge resources had been allocated for the development of the under-developed southern region of the province. He said the government would launch a three-year project for spurring economic growth in the region with the help of the United Kingdom. He said measures were being taken for improving medical facilities in Multan, Rahimyar Khan and Bahawalpur.
He said social and economic infrastructure development had been given priority in the development budget.
Source: http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/pakistan/provinces/13+ambitious+rs489bn+budget+for+punjab-za-08
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