PROVINCES AIM AT POVERTY ALLEVIATION
Strict monitoring a must to achieve the desired results
By SHABBIR H. KAZMI
July 01 - 07, 2002
In line with the federal budget for the new financial year, all the four provinces aim at boosting development expenditure for achieving higher rate of economic growth and poverty alleviation. Another positive point was that some of the provinces were able to announce surplus budget. However, it was also noted that despite claims of surplus hardly any relief was given to people.
Punjab's budget for year 2002-2003 projects a record outlay of Rs 130 billion, aims at strengthening business confidence and promoting development and economic growth. Although it shows a surplus of over Rs 13 billion no relief has been provided to people. While no tax has been imposed, the rates of some of levies have been revised upwards and scope of professional tax has been widened. From the divisible the province would get Rs 85.2 billion. Other federal transfers are estimated at Rs 5.552 billion and provincial collection estimated at Rs 12 billion. However, the benefit would be eroded due to increase in non-development expenditures estimated at Rs 117 billion. The debt servicing at Rs 25 billion would take away the largest chunk. A record Rs 12 billion to be spent on law and order aims at boosting confidence of investors. The government intend to create upto 16,000 new job opportunities.
Sindh's Finance Minister presented the first ever revenue surplus budget for year 2002-2003. While revenue income was estimated around Rs 84.901 billion, expenditures were budgeted at Rs 84.807 billion. The development outlay includes a Rs 7 billion annual development programme, entirely financed by the province except a Japanese grant of Rs 22 million. The various outlays include, foreign-aided projects worth Rs 2.88 billion, a Rs 2.8 billion Kushal Pakistan programme and Rs 1.80 billion under drought Emergency Relief Assistance. The receipts comprise of Rs 37.06 billion from the divisible pool, Rs 18.85 billion on account of oil and gas surcharge and excise, Rs 10 billion federal grant (25% share in the GST) Rs 6 billion IDA credit and Rs 13 billion revenue to be mobilized by the province. The provincial government has, in principle, decided to abolish motor vehicle tax. Various allocations have been made for human resource development.
NWFP's Finance Minister presented a Rs 46.8 billion revenue receipt budget for year 2002-2003, indicating a deficit of Rs 3 billion. Total expenditures have been estimated at over Rs 48.56 billion and revenues at Rs 46.767 billion. However, some analysts estimate budget deficit well above Rs 12.9 billion. This in-built deficit would accrue as the government has projected net hydel profit share of the province on the higher side. According to the 1990 A. G. N. Kazi formula the likely shortfall would be Rs 9.9 billion under the hydel profit share. The Rs 13.67 billion Annual Development Plan indicates a resource gap of Rs 7.9 billion which the government plans to meet through Rs 5.4 billion IDA credit and remaining Rs 1.89 billion through resource mobilization. The receipts include Rs 22.13 billion from federal divisible pool, Rs 15.904 billion from hydel profit. The province would also get Rs 3.989 billion subvention from federal government and another Rs 1.01 billion from GST share. Out of total expenditure of Rs 48.56 billion, a sum of Rs 13.88 billion would be spent on social services, Rs 3.62 billion for economic services, Rs 3.18 billion on law and order, Rs 3.6 billion on pension bill, over one billion rupee for general administration and Rs 1.5 billion for community services. A sum of Rs 8.679 billion has been projected for debt service.
Balochistan's Finance Minister unveiled a budget of Rs 29.79 billion for the financial year 2002-2003. This include current revenue expenditure of Rs 19.75 billion and development expenditure of Rs 10.03 billion. Total resources were estimated at Rs 26.43 billion comprising of provincial revenue of Rs 1.53 billion and federal transfers totalling Rs 24.89 billion. This comprise of Rs 8.43 billion as provincial share in the federal divisible pool of taxes, Rs 5.23 billion as constitutional subvention, Rs 6.73 billion as surcharge on oil, Rs 3.30 billion as excise duty and royalty on oil and gas, Rs 161 million as provincial GST and over one billion rupee as federal grants. Out of total expenditure of Rs 19.75 billion, 22 districts governments will get Rs 7.79 billion. From the total development outlay of Rs 10.03 billion, the district government will get Rs 1.52 billion and provincial administration will utilize Rs 8.51 billion.
While it may be encouraging that provinces intend to spend more on development, it is also necessary to reiterate that efforts should also be made to avoid wastage and to strictly monitor each rupee spent. A point of concern is also that with the establishment of District Governments, the wastage and inefficiency may increase. The aim should be to make the best use of each rupee spent.