Opposition terms budget unconstitutional without NFC award


June 20 - 26, 2005




Sindh's Senior Minister for Finance and Cooperation Syed Sardar Ahmed on June 10 presented a Rs. 143 billion provincial budget amid thumping desks and the opposition's strong protest who regarded it unconstitutional in the absence of National Finance Commission (NFC) award.

Ahmed, giving broader break of the budget, proposed revenue expenditure of Rs.118.93 billion, which would be a 12.5 percent increase over current year. These expenditures are against receipts of Rs.112.95 billion that also include Rs.52 billion federal transfers from divisible pool. The budget entailed an 8.99 billion deficit but the development expenditures which are conventionally called Annual Development Plan (ADP) stood at Rs.28.75 billion and thus implied record deficit as funding of ADP has not been clearly defined in the budget statistics.

This deficit distressed more to the inhabitants of the province as the Punjab province had presented a surplus budget of Rs.224 billion showing an increase of over 24 percent compared to outgoing fiscal and offered an over Rs.43 billion surplus.

Salient features suggest that the share of district governments is estimated at Rs.37.16 billion in the year 2005-06 in accordance with their share in net provincial divisible pool as determined by provincial finance commission. In addition, an amount of Rs. 11 billion will be provided to local governments in lieu of octroi Zila tax grants. The overall transfers to local government will be Rs. 50 billion against revised estimates of 46.86 billion, depicting an increase of 3.85 billion.

While typically allocating money for conventional heads of road sector, special projects, irrigation and power, education, mines and mineral, health, and special development sectors, no effective strategy was announced to generate employment for the provincial youth.

The highest priority is assigned to road sector with an allocation of Rs.3.5 billion, which is 20.35 percent of the total allocation. With these funds Works and Services Department would construct 155 kilometers of new road while 175 kilometers of existing road will be revamped.

For special projects, an amount of Rs.1.43 billion has been allocated. Under this, schemes included are: drinking water supply scheme in Thar, being executed by Army, Gorakh Hill Station development project and improvement of Dhamal Court at the Shrine of Hazrat Lal Shahbaz Qalandar.

For irrigation and power sector, Rs.1.1 billion have been earmarked. Out of this Rs.0.57 billion have been proposed for ongoing schemes, including an allocation of Rs.100 million for assuring water supply to Karachi. Besides, Rs.198.93 million have been proposed for new schemes of water sector and village electrification programme.

For Education sector, an amount of Rs.1 billion has been allocated i.e. 51.5 percent more than current year's allocation of Rs.0.66 billion. An amount of Rs.0.60 billion will also be available as foreign project assistance. District governments will also allocate amount through their share of development allocation. This sector will also receive funds on the recommendations of provincial parliamentarians.



After the discovery of coal in Thar, mines and mineral sector has received budget priority so that the valuable coal reserves could be utilized for power generation. In the next financial year, an amount of Rs.0.99 billion, which is 55.6 percent higher than the current year, has been allocated to this sector. The major schemes include road from Islamkot to Nagar Parkar, from Badin to Mithi and airport road.

Health sector has been provided an amount of Rs.79 billion in the next year's development programme. That is 32.5 percent higher over the outgoing year. The Sindh government has also proposed to provide medical care to its employees through health insurance.

Under special development package, the provincial government has kept an amount of Rs.4 billion. Rs.2 billion would go to Karachi, whereas Hyderabad and Rural packages would get Rs.1 billion each.

The provincial government has also followed the federal budget in accordance with the recommendations of Pay and Pension Committee and has proposed to provide relief in pay and pension to the provincial government employees. Provincial and district governments will spend Rs.12 billion on increase on this account.

The province enjoys no arrangement for the general public against major hazards like ill health, disability, old age, involuntary unemployment and sudden death. Besides Zakat and Baitul Mal, the exiting social security system is restricted to groups like government servant, armed forces and industrial labour only.

Nevertheless, the provincial finance minister made an announcement of Rs.3 billion for the next fiscal year to create a fund for the most vulnerable and disadvantaged segment of society. A board comprising members from public and private sector will manage the fund and the target group would be distressed persons including senior citizens, abandoned families and indigents.


However, the resources allocated for the purpose are scanty. State Bank of Pakistan, in its one of the recent reports, had warned of the increasing unemployment and poverty in the province.

The province-wise data shows that improvement, if it has really come, in the employment rate was not across the board. Unemployment rates increased in Sindh and Balochistan and it rose in Sindh because of higher growth of labour force.