Sindh axes ADP by 24bn due to Shortfall in federal transfers

F.P. Report

KARACHI: Sindh Chief Minister Syed Murad Ali Shah has said that due shortfall in federal transfers the provincial development portfolio faces an allocation cut of Rs. 24 billion reducing the size of Provincial ADP – 2018-19 from Rs282 billion to Rs. 228.00 billion out of which Rs.5 billion would be diverted to district ADP which would be enhanced from Rs.30 billion to Rs.35 billion and Rs. 21billion would be authorized for new ADP schemes.

This he disclosed on Monday while presenting budget for 2018-19 on the floor of the house and sought authorization of the remaining nine months, October 2018 to June 30, 2019.

Presenting budget for the financial years, 2018-19, the chief minister told the hose that during the announcement of the budget 2018-19, the house was requested to authorize expenditure for only three months, 1st July to 30th September 2018.

Murad Ali Shah said that the total budget outlay for current financial year 2018-19 was Rs. 1,144.5 billion. He added that the previous elected provincial government had authorized funds amounting to Rs. 292.613 billion for first quarter of 2018-19. The total current revenue expenditure was Rs773.3 billion out of which Rs. 193.3 billion stood authorized. He said that as against current capital expenditure of Rs. 27.3 billion, Rs. 6.9 billion has already been authorized. For development side, Rs. 63 billion were authorized.

Talking about development budget, Murad Ali Shah said that the total development budget outlay during 2018-19 was Rs.343.911 billion. Out of this Rs.252.00 billion was estimated for Provincial ADP and Rs.30 billion for district ADP schemes, Rs.46.895 billion from Foreign Projects Assistance (FPA and FERP) and Rs.15.017 billion by the federal government through PSDP schemes under execution of Sindh Government. The Provincial ADP 2018-19 includes Rs.202.00 billion for 2226 on-going schemes, and a block allocation of Rs.50 billion was estimated for new schemes.

He said that that provincial development portfolio now faces an allocation cut of Rs. 24 billion. “Now the size of Provincial ADP for 2018-19 is Rs. 228.00 billion out of which Rs. 5 billion will be diverted to district ADP which would be enhanced from Rs.30 billion to Rs.35 billion and Rs. 21.0 billion would be authorized for new ADP schemes.”

Shah said that he has taken this unpleasant decision of reducing ADP allocation because the provincial government was facing financial constraints in view of shortfall in federal transfers. He added that the Provincial Government was largely dependent on the federal government for its revenue receipts including revenue assignments, straight transfers and OZT grant, which constitute about 75 percent of the combined federal receipts and provincial tax and non-tax receipts.

The chief minister said that the actual transfers from Federation to Sindh government always fall short of the estimates provided during a fiscal year. He added that with the unpredictability of these fiscal transfers from the federal to provincial government, budget preparation becomes cumbersome as the projections of non-development expenditure and development portfolio were largely based on these estimates. Shah said, resultantly, provincial development expenditure has to be adjusted to offset the effect. “During the last financial Year 2017-18 the budgeted receipts of federal transfers was Rs. 627.3 billion which was revised to Rs. 598.8 billion whereas actually we received only Rs. 549.9 billion i.e. a shortfall of Rs. 77.4 billion,” he said and added the receipts of federal PSDP were revised to Rs.20.385 billion from Rs.27.326 billion whereas revised Foreign Project Assistance stood at Rs. 27.7 billion as against Rs.42.7 billion. Resultantly we have to cut our development allocation for new schemes from Rs. 50.00 billion to Rs. 26.00 billion, the chief minister said.

The 9th NFC award is also long awaited which is causing a huge economic loss to the provinces, especially Sindh because its revenue collection is much higher as compared to other provinces. We, therefore, urge the Federal Government to start deliberations of the commission soon so that further loss to our province could be avoided.

He pointed out that the performance of Sindh Government in tax collection has improved significantly after 18th amendment. One of the remarkable achievements of Sindh Government is the establishment of Sindh Revenue Board (SRB) for the collection of sales tax on services after 2009 NFC and 18th constitutional amendment. SRB is now the largest authority to collect sales tax on services in Pakistan and it has registered 25% average growth in collection of sales tax in successive years since its inception. In FY 2017-18 the Sindh Government collected a total of Rs. 100.290 billion in sales tax on services. We are once again requesting the federal government to hand over the collection of general sales tax on goods to the provinces for better tax collection.

The chief minister said that the focus of this budget is the optimal utilization of the resources to achieve our objectives of socio-economic development. The Sindh government has planned to provide adequate infrastructure and services in social sectors like education, health, water supply and sanitation, food security, energy and infrastructure sectors., Murad Shah said and added his government has also planned to introduce austerity measures in financial management to keep a check on unproductive government expenditure. “There would be a reduction on purchase of new vehicles except for the operation vehicles for police force and hospitals like ambulances, buses, police APC carriers, prison vans etc. Purchase of luxury items would also be kept under control,” he said.

Talking about, ADP Mr Shah said he has devised a comprehensive development programme. “Our priority is to provide more funds for the on-going development schemes and have allocated Rs. 202 billion during 2018-19 for the on-going schemes as compared to Rs.151 billion in last financial year 2017-18 which was an increase of 25 percent. The government is engaged in development of policies, strategies and plans for key sectors which include; Education, Health, Agriculture, Water Resources, Energy, Transport & Communication, Clean drinking water & Safe disposal of sewage. The Government of Sindh has organized Sindh Development Forum (SDF) in March, 2018 where all stakeholders from Government, International Development Partners, Academia, NGOs, INGOs & Civil Society participated to identify the development gaps in these areas.

The Government of Sindh has also planned to implement multi-million major projects to provide adequate infrastructure and services in social sectors like education, health and water supply & sanitation and also to build urban transport & communication, starting with introducing BRTS lines, like Orange line and Red line in Karachi. It is believed that people of the province will benefit from these ongoing development initiatives to be completed in near future.

The ADP 2018-19 was initially prepared during the month of Mar-April 2018 when Government of Sindh decided to provide development funds Rs.202 billion for ongoing schemes only and authorized the expenditure for first quarter July –September 2018. However, a block provision of Rs.50 billion was kept for new schemes to be decided by the next government. This block allocation has now been reduced and an allocation of Rs.26 billion is kept in ADP 2018-19 for new schemes having a breakup of Rs.21.0 billion for Provincial ADP and an additional amount of Rs.5 billion for district ADP schemes of high priority, especially schemes of education, health, water & sanitation sectors.

The Government of Sindh is giving more emphasis on completion of ongoing schemes, therefore sufficient funds have been allocated for the purpose. It is expected that 958 schemes of ADP 2018-19, where 100 percent remaining funds have been allocated, are likely to be completed by June 2019.

These measures reflect our resolve to bring significant improvement in the life of common man. It is our commitment to implement PPP’s election manifesto 2018 because we have returned to assemblies in general elections because of our past performance. Our party has always led from the front on all issues that matter to the people of this great country.

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