Proposes 22pc to 30pc increase in salaries of govt employees .

KARACHI   -   Sindh budget for next fiscal year with total outlay of three thousand and fifty six billion rupees was presented in provincial assembly in Karachi on Friday.

Sindh Chief Minister Syed Murad Ali Shah who also holds the portfolio of finance minister while presenting budgetary proposals in the house said Annual Development Programme will be of 959 billion rupees while 22 to 30 percent increase has been made in the salaries of government employees and 15 percent increase in the pension.

Syed Murad Ali Shah said 519 billion rupees have been allocated for Education, 334 billion rupees for Health while 329 billion rupees have been earmarked for local governments.

Similarly, 58 billion rupees have been allocated for the agriculture sector, 77 billion rupees for the energy sector, 94 billion rupees for the irrigation sector and 86 billion rupees for Works and Services departments.

Sindh Chief Minister said fifty six billion rupees have been allocated for Transport, 153 billion rupees for Services General Administration and 194 billion rupees for Home Department.

He said minimum wages has been increased from thirty-two to thirty-seven thousand rupees.

He said special initiative has also been taken for the employees of scale 1 to 6 under which a personal pay would be introduced to bridge the difference. Syed Murad Ali Shah said budget also includes 116 billion rupees allocation for subsidies to ease the financial burden on citizens. He said 25 billion rupees will be provided for housing schemes. Syed Murad Ali Shah said five billion rupees have also been earmarked for a Hub Canal Project that would provide water to Karachi.

Revised estimates for FY2023-24

Revised estimates for provincial expenditure have been proposed at Rs2. 252 trillion for year 2023-24 as against the budget estimates of 2.28 trillion. It includes current revenue, capital and development expenditures.

Current Revenue Expenditure (CRE), Revised Estimates for year 2023-24 has been pitched at Rs 1.584 trillion, representing 25% increase, against current year’s budget estimates of Rs 1.411 trillion. The increase is mainly due to Employee Related expenditure.

For Current Capital Expenditure, Revised Estimates for year 2023-24 has been proposed to be Rs.139 billion, showing an increase over current year’s Budget of Rs136.26 billion. The increase is due to surging rupee dollar parity within the range of Rs275 to Rs307 per USD, raising the expenditure towards repayment of loans. The revised estimates for year 2023-24 for provincial development expenditure stand at Rs. 549.5 billion.

Revised Estimates 2023-24 for federal transfers have been proposed to be Rs.1.395 trillion as compared to Budget Estimates of Rs 1.353 trillion for financial year 2023-24.  Revised Estimates 2023-24 for divisible pool stand at Rs. 1.264 trillion as against the budget estimates of Rs.1.255 trillion, and customs and federal excise duties, Rs. 179.6 billion and Rs. 81.98 billion, respectively.

Revised Estimates for Straight Transfers stand at Rs. 97.44 billion against Budget Estimates of Rs. 64.42 billion for year 2023-24.

Sindh sales tax (SST) on services has been the mainstay of provincial revenues with tentative collection of Rs 235 billion in CFY 2023-24.  Revised Estimates for non-tax revenue have been proposed to be Rs.78 billion.

Estimates for FY2023-24

Budget outlay of provincial expenditure for the year 2024-25 is Rs 3.056 trillion that marks 34% increase over budget estimates of Rs. 2.282 trillion in current year. Budget Estimates 2024-25 for Current Revenue Expenditure (CRE) have been pitched at Rs. 1.912 trillion, being 33.5% higher than Budget Estimates of Rs.1.411 trillion for the year 2023-24. The increase is mainly due to inflationary impact on the operating expenses, enhancement of grants in aid to Non-Financial Institutions including hospitals, public sector universities, local councils, necessary salary raise in shape of relief allowance to the government employees and raise in pension expenditure as well as increase in pension. The budget Estimates of tax revenue were earmarked at Rs. 661.9 billion for FY 2024-25 against Rs 469.9 billion last year. Next year’s collection target for Sindh Sales Tax on Services has been set at Rs. 350 billion against Rs. 235 billion for the year 2023-24. The revenue collection target for levies under Excise & Taxation is Rs. 203.8 billion as compared to last year’s Rs.143.27 billion and target for levies/ taxes under the Board of Revenue has been set at Rs. 60.7 billion against last year’s Rs 55.218 billion. Levy of a few new taxes are also imposed to generate Rs 76.8 billion in FY 2024-25.  Budget Estimates for non-tax revenue has been proposed to be Rs 42.9 billion for next financial year 2024-25.

Other major components of annual receipts are related to Foreign Project Assistance, Federal PSDP and budgetary support allocations. Budget Estimates 2024-25 for FPA component stand at Rs. 334 billion covering 27 foreign assisted projects from ADB, WB, USAID, ISDB, AIIB, Exim bank Korea and the JICA. Federal PSDP has been committed at Rs. 76.9 billion.

Budget Estimates for development expenditure for 2024-25 has been proposed to be Rs. 959.1 billion.  It includes Rs 493 billion for Provincial ADP and Rs. 55 billion for district ADP, Rs. 334 billion for Foreign Project Assistance and Rs 76.9 billion for federal PSDP schemes.  

In ADP 2024-25, there will be No New Schemes and the focus will beoncompleting the ongoing projects

Sector wise allocation

The chief minister said that the the budgetary provision for Education Sector has been proposed at Rs. 454 billion against last year’s budget of Rs. 334 billion. For the improved service delivery in health sector, the budgetary provision has been proposed at Rs. 300 billion against Rs. 227.8 billion last year with an increase of 32 percent.

The budget for Public Safety and Policing has been estimated at Rs. 172 billion against Rs.133 billion last year with an increase of 29%.

The chief minister said that considering the emerging needs of the Local Councils, the government has provided additional funds of Rs. 33.9 billion to increase the grant to Local Councils from Rs. 88 billion to Rs. 121.9 billion in CFY 2023-24.

For the next financial year, a provision of Rs. 160 billion has been kept so that the councils may provide better services.

The grant to Karachi Metropolitan Corporation (KMC) by 50% in OZT and 17.5% in pension share, thus the total enhanced share stands at Rs. 1.612 billion in CFY 2023-24.

The .government has also provided Rs. 555 million to KMC for Nallah cleaning activity in Karachi Division, additionally, funds of Rs. 410 million have been provided for cleaning of all Storm Water Channels/ Drains and Nallahs of Karachi City.

Besides, the grant to the Karachi Development Authority (KDA) and share of Sindh Local Government Board has been increased by Rs. 400 million and Rs. 81.4 million respectively.

Furthermore, the proposed allocation for the Irrigation Sector stands at Rs.35.9 billion, the transport and commutation at Rs. 7.62 billion, social protection initiatives at Rs.12.26 billion.

The increase in social protection budget represents the enhanced allocation of Rs. 10 billion for Sindh People’s Support Program which will provide a systematic financial support system to pregnant and lactating mothers of additional districts.

An allocation of Rs. 25 billion over the next five years for provision of free roof top solar home systems to 2.6 million off grid households. In the first phase in next FY, solar home systems will be provided to 500,000 households. The systems will consist of 100 watt solar panel, 3 LED lights, one fan and six hours battery storage.

For Sindh Safe Cities Authority, Rs 3.5 billion earmarked for procurement of the cameras which will be installed from the beginning of the next financial year. In addition, Rs. 1 billion earmarked for construction of state of the art command and control centre.

Moreover, Rs 10 billion allocated for clean water scheme, Rs. 5 billion for Benazir Mazdoor Card and Rs 8 billion are earmarked for Benazir Haari Card.

Taxation

Presenting a number of taxes for the next fiscal year via finance bill, the chief minister announced to enhance the standard rate of Sindh Sales Tax (SST) from 13 percent to 15 percent with a view to harmonizing the tax rates.

It is proposed to reduce SST rate to 8 percent for the restaurant services involving customers’ payments through digital means like debit/credit card, mobile wallet, QR Scanning, etc.

To promoting the Telecom services which pay high rate of 19.5% SST but utilize input items paying Federal ST of upto 18% (which was previously 17%), it is proposed to allow them the input tax credit of upto 18% instead of 17% as at present.

The chief minister said that the resource mobilization proposals are expected to generate revenue of Rs. 35,900 million annually. The government proposed enhancing the Luxury Tax of different values from Rs.150,000 to Rs. 450,000 on imported cars of different engine capacity ranging from 1500 CC to 3000 CC. the rate of Infrastructure Development Cess has been revised from 1.2 percent to 1.8 percent. The rate of Professional Tax was revised from Rs. 500 to Rs. 2,000.

Professional Tax on all Petrol Pumps and CNG Stations has been proposed to be increased from Rs. 5,000 to Rs. 20,000. Besides, the amounts of Transfer Fee for different vehicles of capacity ranging from 800 CC to 2001 CC. The existing rates are proposed to be increased within the range of Rs. 500 to Rs. 5000.