Rs71.61bn surplus budget for Balochistan -Pakistan Press Foundation (PPF)

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Rs71.61bn surplus budget for Balochistan

By Nasir Jamal

QUETTA: The Balochistan government presented on Saturday a tax-free revenue surplus budget of Rs71.617 billion for the fiscal year 2009-10, which includes a record development programme of Rs18.536 billion.

Major initiatives proposed in the budget include an increase in food subsidy (on wheat) to Rs1 billion BALOCHISTAN Finance Minister Mir Asim Kurd Gailu

from Rs600 million and continuation of Rs2 billion annual subsidy on agriculture tube-wells for another year.

In order to provide relief to pensioners, the government raised minimum pension to Rs1,000 from Rs150 and to Rs2,000 from Rs300. It will cost the provincial kitty an additional Rs400 million a year.

In addition to this, government employees and pensioners will receive a 15 per cent ad hoc increase in their salary and pension in line with a decision by the federal government.

The provincial government announced separating the Levies force from police in phases, saying the matter of increase in salary of police had been taken up with the centre.

The provincial government has transferred an amount of Rs22 billion, including 2.5 per cent GST, to local governments under the Provincial Finance Commission award.

The budget proposals project total revenue receipts for the next fiscal year at around Rs59.054 billion and expenditures at Rs53.081 billion, showing a surplus of Rs5.972 billion.

The provincial government expects to receive Rs55.408 billion from the federal government. The province expects to raise Rs1.133 billion from its tax receipts and Rs2.513 billion from non-tax receipts.

Federal transfers to Balochistan next year will include Rs29.205 billion as its share in the divisible tax pool, Rs13.975 billion as subvention, Rs5.633 billion as surcharge on gas, Rs1.371 billion as excise duty on gas, Rs4.443 billion as gas royalty and Rs780 million as its share from 2.5 per cent GST.

The revenue income estimates do not include the special grant of Rs3 billion announced by the prime minister for Balochistan.

Officials say the money will be shown as part of the provincial income in the supplementary budget for the next year on receipt of the committed amount.

Major revenue expenditures include Rs5.558 billion for law and order and police, Rs5.174 billion for social services, Rs5.683 billion for economic services, Rs1.742 billion for debt servicing, Rs10.132 billion for general administration and Rs1.791 billion for community services.

Separately, the provincial capital account is projected to incur a deficit of Rs943 million as capital expenditure (repayment of central loans and loans and advances for the province’s employees and institutions) is estimated to be around Rs2.629 billion against an income (fresh debt and recoveries of loans) of Rs1.685 billion. The capital account deficit will be financed from revenue surplus, slashing the net budgetary surplus for the next year to Rs5.029 billion.

The province will finance its development budget, which is 58 per cent higher than outgoing year’s Rs11.757 billion, from net budgetary surplus, foreign project assistance loan of Rs5.163 billion and Japanese grant of Rs11.5 million. Additional funds to bridge the resource gap for development will be made available on receipt of the prime minister’s special grant.

The gap will be filled also after the release of Rs3 billion by the federal government for the Public Representative Programme (PRP) in the province. The remaining deficit of Rs2.332 billion will be covered through savings in the current expenditure.

In his budget speech in the provincial assembly, Balochistan Finance Minister Mir Asim Kurd Gailu appreciated the federal government for picking up the province’s overdraft of Rs17.5 billion with the State Bank of Pakistan.

“This single step has freed resources of Rs4.2 billion a year for the welfare of the people of Balochistan,” he said.

He also praised the federal government for allocating a record amount of Rs50 billion for the province from its Public Sector Development Programme for the next fiscal year. Additionally, the unspent PSDP allocation of Rs21 billion for the outgoing year will also be carried forward into the next year. This will raise the total federal development spending in the province under the PSDP to Rs71 billion.

Mir Gailu noted that provincial government’s efforts to ensure financial discipline had resulted in current revenue savings of Rs1.413 billion during the outgoing year, despite creation of two new departments and restoration of divisional commissioners.

He said the province had recovered its share of Rs170 million from the National Accountability Bureau and “dug out an amount of Rs3 billion lying in dormant private bank accounts” of various departments. The retrieval of this money was under way, he added.

He said the provincial government had already approached the centre for restoration of executive magistracy and removal of flaws in the Police Order 2002. Balochistan, he said, would strive for a change in the formula for the horizontal distribution of funds between the provinces from the federal divisible tax pool under the NFC award for equitable sharing of resources whenever the new commission met.

He said the provincial government had created over 4,200 new jobs in the public sector during the current year.

Major initiatives in the social sector include provision of missing facilities and equipment and institution of scholarships for students. Major initiatives in the health sector include construction of new hospitals and provision of medicines and equipment.

Mir Gailu said the provincial government was focussing on development of agriculture, irrigation, roads, mineral and livestock and would introduce incentives for wheat growers.

Source: Dawn

Date:6/21/2009