Tax-free surplus budget for Punjab 15 pc increase in salaries, pensions...

Tax-free surplus budget for Punjab 15 pc increase in salaries, pensions...

LAHORE: Punjab Finance Minister Tanvir Ashraf Kaira presented a Rs 489.8 billion provincial budget for the fiscal year 2009-10, carrying a revenue surplus of Rs 108.638 billion but resource shortfall of Rs 26.25 billion to finance an ambitious Rs 175 billion annual development programme.

Though the budget imposed no new taxes, it is deceptive as no explanation has been provided by the minister on the funding he intends to raise for the shortfall of resources for the development budget.

According to the budget estimates, the general revenue receipts of the Punjab government in 2009-10 are estimated at Rs 423.511 billion while the revenue expenditure, including pro-poor subsidies, is expected to be Rs 314.874 billion. With a net revenue surplus of Rs 108.638 billion, the Punjab government expects to generate Rs 25.976 billion from the current capital budget and Rs 1,106 billion from Public Account to increase the total surplus available with the Punjab governmentto Rs 135.721 billion.

The budget document states that some of the shortfall for the ADP would be covered by Rs 2.558 billion federal grant and Rs 10.471 billion from foreign project assistance that would increase the resources to Rs 175 billion ADP. There is no explanation about arrangement of the shortfall of Rs 26.250 billion.

Experts point out that the resource gap is so large that it could not be bridged from the savings on current expenditures. The State Bank is unlikely to provide overdraft to the Punjab government for this purpose and credit from commercial banks would pose problems for the provincial government that is already carrying a huge commercial debt on account of wheat purchases.

The Punjab’s share in the Federal Divisible Pool is expected to be Rs 321.022 billion against Rs 268.585 billion received this fiscal. According to original estimates, the Punjab was to get Rs 284.638 billion as federal transfers in 2007-08. Any shortfall in targeted federal tax revenues would adversely impact the Punjab’s share in 2009-10 as happened this fiscal. The straight transfers from the federal government would be Rs 4.625 billion while the federal grants are expected to be Rs 11.122 billion (hopefully in addition to Rs 2.558 billion grant already mentioned). The provincial tax revenue is targeted to be Rs 49.647 billion while the non-tax revenue is estimated at Rs 37.093 billion.

The provincial finance minister announced the establishment of the Punjab Board of Revenue on the pattern of the Federal Board of Revenue to streamline the tax collection system. The Punjab government has earmarked Rs 30 billion subsidy on Sasti Roti Scheme, provision of edibles, relief to the poor, health facilities to the masses and provision of stipend to intelligent but poor students.

The funding for food support scheme has been increased by Rs 3.2 billion to Rs 16.2 billion that includes Rs 2 billion to provide training and working capital to the unemployed youth. The Punjab government expects to generate Rs 13 billion through the sale of the government property in the next fiscal though it failed to generate any amount from land sales in the current fiscal against a target of over Rs 15 billion.

Kaira announced various measures for the uplift of agriculture, health and educational facilities for the poor, including the allocation of Rs 2.3 billion for Tevta, for imparting skill training to boys and girls. He also exempted the stamp duty on transfer of cooperative and housing society’s property to legal heirs. He also announced 15 per cent increase in the salaries of the provincial employees and equivalent raise for pensioners.