Karachi - Sindh government, on Wednesday, unveiled a Rs 1.24 trillion tax-free budget with a deficit of Rs18.38 billion for the fiscal year 2020-21, only 1.9 percent increase from the last year budget estimates of Rs.1.21 trillion.

Chief Minister Sindh Syed Murad Ali Shah, who also holds the portfolio of provincial finance minister, presented the budget before the provincial assembly amid protest from opposition parties. In his budget speech, CM Shah announced that the salaries of Grade 1-16 government employees would be increased by 10 percent, while those of Grade 17-21 would receive a 5 percent raise. The upward revision, however, would not be applicable to provincial ministers and Sindh cabinet, he added.

Murad Ali Shah told the House that that no new tax had been introduced in budget 2020-21 and the increase in non-development expenditure was restricted to only seven percent.

He said that the increase in non-development expenditure was mainly due to provision of `COVID-related pro-poor “Social Protection & Economic Sustainability” package of Rs34.2 billion and rise of Rs19 billion in health sector and Rs22.9 billion in education sector from current year's budget allocations. The CM said that the agriculture department budget was increased by 40 percent to Rs.14.84 billion mainly due to subsidy package for small farmers and locust control. “The Sindh government has allocated Rs.440 million for locust control,” he said.

The chief minister said that the health department budget was raised by 16.1 per cent to Rs.139.18 billion to counter COVID-19 Pandemic and Infectious Diseases. “Health Risk Allowance at the rate of one basic pay will be provided to all Health personnel including postgraduate and house job officers engaged in dealing with COVID-19 cases with effect from March, 2020,” he announced.The chief minister said that the education department budget was augmented by 10.2 per cent to Rs.243.14 billion for quality education and to cope up the post pandemic academic challengesHe said that the grants to local councils was increased by five per cent to Rs.78 billion in the next budget.

Revised estimates

for 2019-20

The chief minister said that under share distribution formula, Sindh government was to receive a total of Rs.835.3 billion.  However, he said that these estimates were revised, witnessing a 27 percent shortfall, during the year and stood at the total amount to be received at Rs.606.7 billion. He, however said that even in the 12 month, they were yet to receive the promised money as they only received a total of Rs.525.1 billion, showing a 31 percent shortfall.

Estimates for 2020-21

The total receivables from the federal government for the financial year 2019-20 stand at Rs.760.3 billion, wherein Rs.679.7 billion is share from divisible pool, Rs.62.3 billion as straight transfers and Rs.18.3 billion in respect of grants to offset losses on abolition of OZT.

It is estimated that total provincial receipts for the Financial Year 2020-21 will be Rs.313.3 billion, approximately 9 percent higher than the Budget Estimates for the financial year 2019-20.

Development budget

The chief minister said that the government allocated Rs.284 billion as total development outlay in financial year 2019-20, wherein Rs.208.0 billion were earmarked for provincial ADP, Rs.20 billion for District ADP, Rs.51 billion in foreign projects assistance, and Rs.4.9 billion from Federal PSDP grant. He said that although they planned to allocate same money for the provincial ADP in 2020-21, with 85 percent funds allocated for ongoing schemes and 15 percent for new schemes.  Shah further explained that the increase in non-development expenditure was mainly due to provision of ‘COVID-related pro-poor’ Social Protection and Economic Sustainability package of Rs34.2 billion and a rise of Rs19 billion in the health sector and Rs22.9 billion in the education sector.