LAHORE - With the traditional thrust on infrastructure development and added focus on agriculture and social sector, the Punjab government of PML-N on Monday presented a balanced budget of Rs1.68 trillion for 2016-17, proposing some new tax measures.

Provincial Finance Minister Dr Ayesha Ghous Pasha presented the fourth budget of the PML-N’s current tenure in Punjab which is around 16 percent higher than that of outgoing year’s Rs1.45 trillion fiscal outlay. It carries Punjab’s biggest-ever annual development programme (ADP) of over Rs550 billion.

Chaired by Speaker Rana Muhammad Iqbal, the 22nd session of Punjab Assembly was marred by ruckus as opposition lawmakers kept chanting anti-government slogans during Ayesha’s speech and some of them even tore apart copies of the budget in protest.

The provincial budget, which reflected many features of the federal budget, proposed 10 percent increment in salaries and pensions of government employees, and Rs1,000 increase in minimum monthly wage of labourers.

Amid opposition protest, the finance minister proposed taxes on 10 items and 10 services. According to the proposal, 16 percent general sales tax (GST) would be extended to such services as cosmetics, beauty salons, consultants, specialists, dental surgeons and hair transplants. Packaging and storage services would also be taxed.

The government has proposed imposing property tax on vacant plots, though it will be one-ninth in value than that of the tax on a constructed building on same-sized plot. The DC stamp duty on ownership transfer of plots in cooperative housing societies has been increased from 2 percent to 3 percent.

As per another proposal, on general power of attorney for property, the CVT would be replaced by a 2 percent tax of the total value of the property.

A new tax would be imposed on imported vehicles. This tax would range from 15,000 to 100,000 on vehicles in the range of 1000-1500cc. The registration fee for 1500-2000cc vehicles has been increased from two to three percent.

Although a handsome amount of Rs168.87 billion has been allocated in the ADP for social sector as a whole, the allocations for education and health – the two biggest and most important components of this sector – are less than that of the outgoing year in terms of total percentage of the budget.

As for the broader contours of the budget, the general revenue receipts have been estimated at Rs1.32 trillion. The province would receive Rs1.04 trillion from federal divisible pool under NFC Award, and raise Rs280 billion from own resources which include Rs184.4 billion tax revenues and Rs95.61 billion non-tax revenues.

The government's total running expenditures (operating expenditure and non-development funds) have been estimated at Rs849.94 billion.

Development projects of over Rs640 billion have been included in the budget, out of which local infrastructure development will get Rs300 billion, social sector development Rs175 billion, Chief Minister Special Initiatives Rs55 billion, services sector development Rs48 billion and transport sector development Rs33 billion.

The Punjab government will get Rs100 billion loan from Chinese Exim Bank for the construction of Orange Line Metro Train project which will be utilised during the next fiscal year.

An amount of Rs4 billion has been allocated to distribute laptops among 0.4 million youths. As many as Rs27 billion will be spent on roads in rural areas. A sum of Rs32.2 billion will be spent on transport sector.

The minister said the new development and uplift programmes would help create more than 500,000 employment opportunities.

She said that out of the Rs550 billion Annual Development Programme (which is 37 percent up from the Rs409 billion ADP of current fiscal year), Rs168.87 billion have been allocated for social sector, encompassing education, health, water supply and sanitation, women development and social security. She pointed out that social sector development budget consisted of 31 percent of the total ADP.

About Rs312 billion (less than 19 percent of the total budget) have been proposed for education sector for both running and development expenditure. Last year’s Rs310 billion allocation for education was almost 23 percent of outgoing year’s total budget.

Out of the Rs312 billion, school education will be given Rs256 billion and higher education would get Rs47 billion. Literacy and non-basic formal education would be given Rs2.16 billion and special education Rs900 million. Rs 3 billion have been put aside for Danish schools and Rs4 billion for endowment fund.

Punjab Educational Foundation will receive Rs12 billion in the next financial year. Dr Pasha said that under PEF, 1.9 million children are enrolled in thousands of private schools.

The total budget for Punjab health has been fixed at Rs71.6 billion. Last year Rs168 billion were earmarked for health sector.

Funds of Rs26.191 billion have been proposed for the Health Department while some additional projects for health sector are also part of the budget. A total of Rs5.20 billion has been allocated for hospitals up-gradation. The minister said that all record of medicine and equipment in hospitals would be computerised besides, computerisation of staff attendance will also be implemented.

As many as Rs30 billion have been allocated for the Chief Minister’s Saaf Paani Scheme.

In the Agriculture sector, Rs50 billion have been allocated for a special Kissan Package, while special loan schemes and subsidised rates for solar-powered tube-wells will also be included in the next financial year. Rs40 billion have been allocated for irrigation.

The allocation for sports is estimated at Rs2.87 billion while Rs3.83 billion is allocated for industries, Rs610 million for social welfare and Rs575 million for women development.

The police department will receive Rs13 billion this financial year. The dolphin force will also be introduced in other major cities including Faisalabad, Sialkot, Gujranwala, Multan, Rawalpindi, Bahawalpur, Sargodha and Jhang.

The local government and community development will get Rs4.439 billion, public buildings Rs10.51 billion, urban development Rs16.86 billion, cooperatives Rs115 million, fisheries Rs690 million, food Rs834 million, mines and minerals Rs518 million, governance and IT Rs9.82 billion, labour and HR development Rs702 million, emergency services Rs2.18 billion, and information and culture Rs414 million.

The government in its new initiative has also proposed to establish minorities development fund worth Rs460 million while Rs575 million have been put aside for human rights.

Rs580 million have been allocated for environment and Rs1 billion for forests, while Rs800 million will be spent on wildlife.

The minister said that the govt, instead of increasing ratio of taxes, has decided to enhance net of property tax to commercial plots with a view to control artificial hike in rates of plots. The government has also added some new services in the tax net, including dental surgeons and beauty saloons, which will be electronically connected with the Punjab revenue authority to ensure tax collection.

Budget at a glance (In Millions)

Classification Budget Revised Budget
estimates estimates estimates
2015-16 2015-16 2016-17

A-CURRENT BUDGET
Gen.Rev.Reciepts 1,144,558.319 1,135,771.201 1,319,966.142
Current Expend. 753, 010.825 746,855.766 849,947.178

A-Net Revenue
Account-Surplus/ 391,547.494 388,915.435 470,018.964
Deficit

B-CURRENT CAPITAL BUDGET
Current
Capital 15,408.911 6,569.119 17,152.391
Reciepts

Current
Capital 41,374.072 45,287.16 52,124.170
Expenditure

B-Net
Capital Account- (25,965.161) (38,718.050) (34,971.779)
Surplus/Deficit

C-Surplus
for Development 365,582.333 350,197.385 435,047.185
(A+B)

D-ADP Financing Items

Foreign Project Assistance 34,417.667 72,716.077 114,952.815

TOTAL RESOURCES 400,000.000 422,913.462 550,000.000
FOR DEVELOPMENT
(C+D)