LAHORE - The Punjab government, with Shahbaz Sharif’s seventh term as a chief minister, is going to present over Rs1 trillion budget for fiscal year 2014-15 on Friday (today), introducing another tax on luxurious vehicles though Sharif’s provincial government has so far been unsuccessful to implement one-time luxury tax introduced in the concluding fiscal year budget of 2013-14.

One-time luxury tax was proposed by the Punjab government in 2013-14 budget on houses measuring two kanals and more. The tax liability was to increase with increase in the size with a maximum of Rs1.5 million.

The same government had also proposed the tax on sprawling farmhouses and private swimming pools in budget 2011-12 and again in 2012-13, but could not be implemented in its full spirit due to a legal issue that was exploited by some owners of the farmhouses and swimming pools, who challenged it in a court of law and got a stay order against the levy, a senior officials of the finance department said.

They said now the complications have been removed in the new budget, which paved the way for the imposition of the new luxury tax. They said the government had planned to expand the provincial tax base to increase development sector spending and for this purpose different committees were constituted to expand the provincial tax base. These committees discussed in details several proposals of imposition of new taxes or enhancing the rates on existing taxes.

The new budget will allocate about Rs330 billion for annual development plan, with about Rs15 billion for buildings and infrastructure development, Rs7 billion for police department development, (Rs82 billion for overall police), Rs4 billion for health insurance scheme, Rs30 billion for education, Rs32 billion for energy sector, Rs4.5 billion for livestock, Rs7 billion for agriculture, Rs19 billion for special initiatives, Rs7 billion for skill development, Rs12 billion for Rawalpindi Metro Bus Project.

According to sources, no allocation has been made in the upcoming budget for the Lahore Ring Road project, Multan Metro Bus project or Faisalabad Metro Bus project. In the same way no green tractor or yellow cab scheme is being extended this year budget. However, they said government would focus on Ashiyana schemes in those areas which were considered the PTI strongholds to woo the voters.

The ADP funds would be earmarked as a block allocation, subject to the consent of the chief minister. A huge amount of Rs20 billion would be allocated for this purpose. The public sector employees could get only 10 percent raise in their salaries as the federal government did in the budget. There is a demand of the employees that the pay scales be revised this year but government has no plan do the same in the budget for the next financial year.

As per sources, the government has decided to launch health insurance scheme with the allocated amount of Rs4 billion under the pro-poor initiatives while in the proposed ADP the government has focused on education, irrigation and skill development energy.

With a view to bridge the growing gap of skilled workforce shortage due to the proposed garment cities to enhance textile export following GSP Plus status to Pakistan by the EU countries, the government has allocated around Rs19 billion for the special initiatives and Rs7 billion for skill development. The sources said that skill development is another important focused area of the forthcoming provincial budget. The government has planned to produce 2 million skilled graduates during the next five years. Thus 400,000 skills graduates would be passed out annually. The skills development will be completed to provide finance to TEVTA, PVTC and PSDF.

In education sector the proposed allocation is around Rs30 billion and almost Rs 15 billion for infrastructure development under governance programme has been allocated. Under these programmes around Rs 7 billion would be spent on police department development programmes.

The government has also planned to complete Rawalpindi Metro Bus Project in the coming fiscal year by allocating Rs12 billion for it. However, so far no allocation has been made for the Lahore Ring Road project. Sources said that the government is mulling to complete remaining part of the Lahore Ring Road through Public Private financing.

They said that some initial amount would be provided for Multan Metro Bus project in the forthcoming budget under Chief Minister Special Initiative head while government will prioritize starting Faisalabad Metro Bus project after completion of Rawalpindi Metro Bus project.

As per sources, Rs 400 million allocations have been made to provide interchange on motorway for Faisalabad under highways projects. This project will be initiated in this forthcoming budget and further allocations will be made in the next budgets.

The biggest ever project in the budget with foreign funding will be Mass Transit Train to the tune of $ 1.6 billion executed with the cooperation of neighboring country China.

Last year, Punjab budget volume was Rs 897 billion with Rs 290 billion as the ADP. The total estimates of running expenditures for the financial year 2013-14 were about Rs 607 billion.