LAHORE - The Punjab government is presenting its first budget for 2013-14 with total outlay of around Rs 868 billion in the provincial assembly on Monday (today).

Finance Minister Mujtaba Shujaur Rehman will present the budget for the next fiscal year at the Punjab Assembly session to be chaired by Speaker Rana Muhammad Iqbal.

According to sources, more funds are likely to be allocated for development programme, education and health as compared to the previous year with direct focus on power generation through alternative energy sources in the province.

The amount earmarked for development will be around Rs 260 billion. About 10 percent increase in the salaries of public servants in line with the federal budget has also been proposed. The amount fixed for social development is more than Rs 100 billion. The education and health will get about Rs 48 and Rs 23 billion, respectively.

Official sources said that with the rising spending and provincial taxes not moving fast, Punjab had to slash its development spending for the current fiscal year.

Official sources said that initiatives set in the concluding year’s budget would also be continued for the next fiscal year, including cardiology hospitals, rapid bus service, laptop schemes, Danish schools and Ashiana Housing projects.

Like in Lahore, Ashiana housing schemes will be initiated also in several other cities. In addition, rapid bus service will be launched in all major cities, including Faisalabad and Multan.

The provision of clean drinking water through installation of new water filtration plants in rural as well as urban areas throughout the province would also be a budget priority.

Sources said that like in the past, this year too, some proposals would be presented to devise a system for agricultural tax, though no agricultural levy was being imposed this year too.

According to the provincial finance department sources, the upcoming budget will be presented with focus on poverty alleviation, end to power crisis and creation of promoting agro-economy.

The Punjab government has also decided to reduce non-development spending by at least 25 to 30 per cent, besides adopting strict austerity measures, including cut in pays of the provincial ministers, a complete freeze on purchase of new vehicles and furniture for all offices of the provincial departments, it was learnt.

The sources from the provincial finance department, sharing the provincial budget priorities for 2013-14 set by the financial team of CM Shahbaz Sharif, disclosed that the upcoming budget, in line with the federal government budget, would focus on power production through all cheaper means, including sugarcane bagasse, coal and hydal power. A strategy would be adopted to generate local resources and reduce non-developmental spending by 25-30 per cent and removal of non-feasible projects from the ADP.

Education and health will also remain a major priority for the provincial government. The government not only evolve annual budget for 2013-14 but also prepare a five-year budget plan and around Rs 650 billion will be pledged for education sector for five years to raise standard of government schools, besides continuing Danish school projects all over the province.

As a short-term solution of energy problem, fast-track development of bagasse-based power generation projects will be implemented and, initially, 800-1000mw electricity would be generated from sugarcane bagasse.

Installation of small hydal power plants on canals and conversion of thermal power plants in the industry to coal-powered generation will be implemented as a long-term plan, they added.

It is to be noted that despite tall claims, the Punjab government had failed to spend even a single penny out of Rs10 billion allocated for power generation in the current budget of 2012-13 as most of the funds were re-allocated to other schemes.

In the upcoming provincial budget, special incentives would be given to the private sector to invest for maximum utilisation of water and mineral resources in the province to speed up economic growth.

The Punjab budget is interesting because this is the first time since the fiscal year 2008 budget that Lahore and Islamabad are being governed by the same political party. For the past five years, PML-N has been complaining that the problems in his province have been caused by an uncooperative federal government. Now that excuse no longer exists and PML-N will be free to pursue its desired policies in Punjab, knowing that they have the full backing of Islamabad.

The budget for year 2013-14 would be approved by the provincial cabinet before being presented in the house.