Rs1.47tr tax-free Sindh budget: Salaries, min wage raised more than Federal Govt

Rs1.47tr tax-free Sindh budget
Rs1.47tr tax-free Sindh budget: Salaries, min wage raised more than Federal Govt


NUT Desk – KARACHI: The Sindh chief minister on Tuesday complained over hold up of funding by the federal government that has created a financial crunch in the province while presenting a Rs1.47 trillion provincial budget for the fiscal year 2021-22 with an estimated 19 percent growth in revenue collection.

“We are facing a shortfall on account of federal transfers. During 11 months of this financial year against budgeted receipts of Rs696.9 billion, we have only received Rs623.6 billion,” Sindh Chief Minister Murad Ali Shah said. “Based on these figures, we will be facing a shortfall of Rs83.8 billion.”

He said: “Receipts of federal public sector development program (PSDP) are revised at Rs8.3 billion whereas revised foreign project assistance stands at Rs38.2 billion.” For FY2022, total budget outlay is estimated at Rs1.47 trillion, up 19.1 percent growth over an estimated Rs1.24 trillion in the current fiscal year. Receipts of the province are estimated at Rs1.45 trillion, up 18.8 percent year-over-year. The budget deficit was estimated at Rs25.7 billion.

Shah presented the budget with the opposition members protesting inside and outside the provincial assembly with placards and whistles reminiscent of ruckus at the time of federal budget announcement.

The government proposed 20 percent increase in basic salary of all its employees and 10 percent increase in pensions, besides setting the minimum wage at Rs25,000 in the province, against Rs 20,000 of the federal government. A personal allowance was also proposed for employees of up to BPS-05 grade. The percentage increase in salaries of provincial employees is double to that proposed by the federal government, which has suggested a hike of 10 percent. The total receipts of the province for 2021/22 are estimated at Rs1.4 trillion as against the budget estimate of Rs1.2 trillion for the current fiscal year, showing an overall increase of 19 percent. Receipts from the federal government on account of revenue assignment, straight transfers and grants are estimated at Rs869.6 billion. It is an increase of 12.6 percent over estimates of Rs760.3 billion last year.

However, the budget estimates of straight transfers for next fiscal year have decreased substantially by approximately 20.6 percent to Rs49.5 billion from the budget estimates of Rs62.3 billion of the current fiscal year.

The federal government is the major contributor to Sindh’s finances comprising 72.5 percent in its entirety. Receipts of federal public sector development program are estimated at Rs5.3 billion. Receipts on account of foreign project assistance, budgetary support loans and grants are estimated at Rs71 billion. Receipts from provincial own sources on account of tax and non-tax receipts are estimated at Rs329 billion, which constitute 27.5 percent of total receipts. This is an increase of 4.8 percent over estimates of Rs313.4 billion in the current fiscal year.