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Province-wise Pakistan’s budget 2020-21 allocations

Sindh Budget

The Sindh government presented the budget for FY2020-21 with a total outlay of Rs1.24 trillion with an estimated narrow deficit despite falling inflows from the federal divisible pool. Sources mentioned that the province is hoping to generate revenue receipts worth Rs1.22 trillion against its total expenditure. The provincial government has also not proclaimed any new taxes and envisaged a deficit of Rs18.38 billion for the upcoming fiscal year.

It is also recorded that the Sindh cabinet accepted a 10 percent raise in salaries for employees from grade 1 to 16 and 5 percent increase from grade 17 to 22. The increase in salaries will also be part of the budget expenditures. A total of Rs313.39 billion would be collected from provincial receipts. It is also said that in order to attain the provincial target in receipts, the revenue collecting agencies are being strengthened with increased emphasis on automation. Moreover, monitoring procedures will also be developed to monitor provincial receipts. Furthermore, the provincial government received 31 percent lesser funds from the federal divisible pool. Standing in the 12th month in the current financial year the Sindh government has received a total of Rs525.1 billion. Thus, in actual terms, it received Rs240.6 billion short of the budget estimates. The total receivables from the federal government for the current fiscal year stand at Rs760.3 billion, wherein Rs679.7 billion is share from the divisible pool, Rs62.3 billion are straight transfers and Rs18.3 billion in respect of grants to offset the losses on account of abolition of Octroi Zila Tax.

Statistics also showed that the federal government had set the Federal Board of Revenue’s revenue collection target at Rs5.55 trillion for FY2020. The government has reset a target of Rs4.9 trillion for the FBR for the next fiscal year. Furthermore, the country is facing the grave challenges of COVID-19. The Sindh government proclaimed unemployment is on the rise, businesses are at a standstill and small medium-term enterprises need assistance for revival in post-COVID-19 scenario. The Sindh government proposed social protection and economic sustainability package of Rs34.2 billion for FY2020-21 for ensuring food security, reducing inflation and unemployment. Health continues to remain the third largest sector with allocation for current revenue expenditure of Rs120 billion and development, including foreign project assistance at Rs15.5 billion. Total current revenue expenditure was budgeted at Rs139.1 billion and allocation for development schemes at Rs23.5 billion. The budget of the health department was divided into two major segments i.e. health services and medical education. The budget estimates for health department for 2019-20 was Rs120.486 billion, which was increased to Rs139.178 billion for 2020-21. The budget of the education sector has been increased to Rs244.5 billion, compared with Rs212.4 billion a year earlier. Despite resource constraints the Sindh government has allocated funds which are 25.2 percent of current revenue budget. For education sector, total Rs9.5 billion was allocated for Sindh Education Foundation.

Sindh is determined to improve the conditions in agriculture sector by increasing the overall budget to Rs14. 8 billion in FY2020-21, in comparison with an allocation of Rs10.6 billion in the financial year 2019-20. Moreover, statistics also showed that the Sindh government proclaimed a budget of Rs113.87 billion for law and order with an increase of Rs4 billion as against to the previous year i.e. Rs109 billion. It allocated Rs113.87 billion for the home department compared to Rs109.79 billion a year earlier. The budgetary allocations include Rs102.16 billion for Sindh police, Rs7.23 billion for home administration and Rs4.48 billion for jails.

The Government officials recorded that the Sindh province has large quantities of minerals. In all there are 24 minerals which are being mined at present. Among these, Sindh has large quantities of coal and granite reserves. The granite area which was inaccessible has now been connected with Karachi by a network of roads and other facilities like Rest House etc. It is also proposed that a Granite Park will be organized at Nagarparkar. Karunjhar range of mountains in Nagarparkar has huge reserves of granite and other rock types of extractable thickness which has the potential to compete the international market. It spreads over vast area and its estimated reserves are around 10 billion tons. The Directorate of Mines & Mineral Development, Sindh is sponsoring a scheme for study through consultant “Feasibility Study of Granite Deposits in Tharparkar, Sindh“. Previously leases were granted in haphazard manner without any policy.

Punjab Budget
Workers Registered For Overseas Employment
Year Punjab
2015 478,646
2016 446,566
2017 261,849
2018 185,902
2019 312,439

Despite the rising numbers of coronavirus pandemic (COVID-19) infections and deaths across Punjab, the Punjab government’s Rs2,240.7 billion budget for FY2021 proclaimed, proposed to modestly increase development and current spending, including coronavirus-related expenditure of Rs50 billion, give significant tax relief of Rs56 billion to small businesses affected by the pandemic outbreak, encourage digitisation and documentation of the economy, and, at the same time, produce a cash surplus of Rs125 billion to hold down the federal fiscal deficit.

The budget’s statistics show allocation of Rs68.3 billion for COVID-19 mitigation expenditure, including Rs35 billion for 20 percent of the existing healthcare workers, Rs10 billion for new recruitments to overcome the shortage of caregivers, tax relief of Rs10 billion and block allocation of Rs13 billion for any emergency expenditure. The budget offers substantial fiscal incentives to businesses relating to property and construction and has set aside Rs40 billion for Punjab Cities Programme and funds for developing new tourism sites. Education will get Rs391 billion, including Rs34 billion for development schemes. An amount of Rs284 billion has been allocated for health, which includes Rs33 billion for development like upgrade of hospitals in south Punjab. Statistics also showed that the provincial government has booked current expenditure of Rs1,318.3 billion for FY2021, up by just 1.5 percent from Rs1,298.8 billion budgeted for the present fiscal. It also plans to spend Rs337 billion — or nearly 9.5 percent greater than the original development expenditure estimates of Rs308 billion for the current year. It is also recorded that the actual development spending this year has been revised down to Rs255 billion on the back of provincial revenue shortfall of Rs635 billion, including a shortfall of Rs509 billion in the federal transfers and Rs126 billion in the provincial own source (tax and non-tax) revenue, in the projected revenue income of Rs1,989.8 billion owing to the countrywide coronavirus lockdown. The provincial managers are expecting a mismatch — or in simple words deficit — in excess of Rs20 billion in their actual income and expenditure at the end of the present fiscal year.

Last year, the province had closed the year with a cash surplus of Rs42 billion, which has now been used to reduce the deficit for the present year. In addition to its projected share of Rs1433 billion from the federal divisible tax pool under the National Finance Commission Award, Punjab plans to raise Rs220.9 billion in provincial taxes, down by just over a quarter from the original estimates of Rs295 billion, and Rs96.2 billion in provincial non-tax income, which also includes federal grant of Rs4.2 billion and net hydel profits of Rs10 billion. In addition, the province expects foreign financing of Rs47.1 billion for development schemes and capital receipts — loan recoveries, income from sale of wheat, etc, of Rs443.5 billion. It also plans to raise a sum of Rs331.9 billion in commercial loans for its wheat procurement operations next year. The estimates for the next year’s budget have been framed under the macroeconomic assumptions that the real GDP growth will be 2.1 percent, inflation at 6.5 percent and the FBR will collect tax of Rs4,962 billion. Due to its tight fiscal situation, the government has almost kept major expenditure heads like salary, pension, non-salary, etc, frozen at the level of the allocation made in 2019-20. The budget for the current year had inflated the development spending to Rs350 billion by indicating PPP-financed schemes of Rs42 billion in it. None of the schemes could be implemented though.

Statistics also showed that the budget also made an allocation of Rs1.5 billion for a separate secretariat for south Punjab, in addition to setting aside substantial resources for several initiatives to alleviate poverty, create jobs and financially empower women in 10 districts of south Punjab. In Punjab different sources recorded that the richest landlord pays 85 percent less income tax compared to the highest paid salaried person because of a year-old decision of the provincial government, when it adopted low agricultural income tax rates. The difference between tax rates for a landlord and a businessman widens up to 150 percent, explained the comparison of income tax rates being charged to the landlord, on business income and salaried income.

 

It is also important to note that since July 2019, the Punjab government has been collecting abysmally low taxes on agricultural income, mainly from big landholders, who pay just Rs500 per acre or 15 percent, whichever is higher. Despite the lack of a coastline, Punjab is the most industrialised province of Pakistan; its manufacturing units produce textiles, sports goods, heavy machinery, electrical appliances, surgical instruments, vehicles, auto parts, metals, sugar mill plants, aircraft, cement, agricultural machinery, bicycles and rickshaws, floor coverings, and processed foods.

Balochistan Budget
Allocations Of Ongoing Health Schemes In BALOCHISTAN
S.No. Project Title Allocation(Rs. million)
1 Establishment of Emergency Centers on Main Highways of Balochistan 427
2 Construction of 30 Beded (Bacha Khan Hospital), Quetta 340
3 Construction of One New BHU/RHC in each Tehsil of Balochistan 200
4 Equipment for Trauma Center Khuzdar, BMCH & Sheikh Zayed Hospital 180
5 Strengthening of 16 Potential DHQs 50 Bedded Hospital 200
Source: Planning Commission (Health Section)

According to the Economic Survey FY2020, Balochistan is the largest province (area wise) of Pakistan constituting 43 percent of the total national landmass. The country, in general, and the province in particular, is endowed by the nature with the blessing of substantial mineral wealth. Mineral industry can play a significant role in boosting up the socio-economic setup in Balochistan as agriculture in other parts of Pakistan but due attention could not be given to the exploration and development of mineral sector because of financial constraints, heavy risk investment and lack of infrastructure as the deposits are located in remote and far flung areas.

For the FY2021, the Government of Balochistan has also unveiled provincial budget with a total outlay of Rs465.528 billion. Despite meager resources the province was trying its best to churn out optimum health facilities in the times of coronavirus condition. The Government of Balochistan stated that Rs309 billion have been allocated for Non-Developmental expenditures while higher than Rs156 billion have been allocated for developmental expenditures. In the budget, the government also said that deficit of Rs87 billion has been shown. The province proclaimed an emergency on March 8 with regards to the rapidly changing COVID-19 condition during which the provincial government distributed Rs985 million worth of ration to various district governments. Moreover, the government also paid a glowing tribute to doctors and paramedics of the province who have been performing their responsibilities in the face of great odds, adding the government’s primary focus in the budget is education, drinkable water and employment generation. Statistics showed that greater than Rs63.5 billion have been allocated for uplift of education sector in the province.

Statistics also showed that Rs38 billion have been allocated for health sector and to offer modern health facilities to the poor masses in the Balochistan providence, for health, an amount of Rs1 billion has been allocated for COVID-19 emergency in the province. The government was leaving no stone unturned to do its best for its people during the outbreak of COVID-19 along with ensuring that all required medical equipment is made accessible and salaries of health workers, doctors and paramedics are paid on time. Furthermore the government has also assigned Rs4.121 billion for the development of agriculture sector for FY2021. According to the source, the government has earmarked an amount of Rs11.071 billion for non-development sector, while Rs640.775 million has been set for the revamping of the agriculture department in Balochistan. The source also recorded that in the FY2019-20 had distributed 31,445 kilograms of agricultural seeds, 5,229 agricultural tools and 7,387 cotton bags among the landowners and farmers in the whole province for the improvement of agricultural production.

Locust attacks have also led to a significant fall in agricultural production, for which the provincial government was declared a locust emergency in December 2019. According to the Economic Survey FY2020, nature has gifted Balochistan with vast natural resources. Efforts are being made for scientific exploration and exploitation of these resources. Government has given prompt attention towards the development of minerals. Many national and multi-national firms are involved in exploration of minerals and have obtained areas for prefeasibility studies/exploration/exploitation of gold, copper, precious metals and associated minerals in Chagai and other districts. It is also said that nine large scale licenses and greater than 1450 concessions of various minerals have been granted to different private/public-sector small scale mining companies.

No doubt, Balochistan province has large deposits of limestone, gypsum and coal and investment opportunities for installation of cement factories are available. Seven applications for grant of exploration and mining lease are under process for cement raw material in Director General of Mines & Minerals office Quetta.

Khyber Pakhtunkhwa (KPK) Budget
Literacy Rate (10 Years and Above)-PAKISTAN AND PROVINCES (%)
Details Male Female Total Male Female Total
Pakistan 70 48 58 71 49 60
Rural 63 36 49 65 38 51
Urban 81 68 74 80 67 74
Khyber Pakhtunkhwa(Including Merged Areas) 75 36 55
Rural 74 33 52
Urban 82 51 66

For FY2020-21, the Khyber Pakhtunkhwa (KPK) government unveiled budget with total outlay of Rs923 billion. Sources said that the budget is a tax free and with an amount of Rs104 billion allocated for Annual Development Plan (ADP) for FY2021. Statistics showed that FY2020-21 total outlay of the budget was pitched Rs923 billion counting Rs739.1 billon for settled districts and Rs183.9 billion for merged districts. About the ongoing expenditure, the government said that a total of Rs605.2 billion were assigned for settled i.e. Rs517.2 billion and merged districts i.e. Rs88 billion.

Regarding development expenditure, the government also said a total of Rs317.8 billion were earmarked counting Rs221.9 billion for settled districts and Rs95.9 billion for merged districts. Statistics also showed that Rs124 billion were allocated for health sector for settled and merged districts, adding the budget for settled districts have risen from Rs87 billion of outgoing fiscal to Rs105.9 billion for upcoming fiscal year. For development budget in health sector, a total of Rs24.4 billion were allocated counting Rs13.8 billion for settled district and Rs10.6 for merged tribal districts. It is also said that the government will focus to ensure adequate stock of equipment, medicines and growing strength of doctors in public sector hospitals besides offering Sehat Insaf cards to every family of the province and in this regard Rs10 billion were allocated. The government also said Rs36 billion earmarked for MTI hospitals counting Rs26 billion for MTIs current budget and Rs4 billion for completion of main projects besides Rs6 billion for special demand funds for enhancing healthcare system in major hospitals.

Shortage of infrastructure and equipment in basic health units would be overcome and for this purpose Rs13 billion projects would be introduced in collaboration with World Bank. Similarly, budget has been increased from Rs2.5 billion to 4 billion rupees for procurement of medicines in healthcare facilities besides acquiring services of private sectors with allocation of Rs 1billion for waste management of hospitals. It is also important to note that KPK in Pakistan has the third largest provincial economy in Pakistan. Its share of Pakistan’s GDP has historically comprised 10.5 percent, although the province accounts for 11.9 percent of Pakistan’s total population. The part of the economy that this province dominates is forestry, where its share has historically ranged from a low of 34.9 percent to a high of 81 percent, giving an average of 61.56 percent.

Statistics showed that the province accounts for 10 percent of the country’s GDP, 20 percent of Pakistan’s mining output and, since 1972, it has seen its economy grow in size by 3.6 times. In spite of all these the government of KPK also urged separately Rs24 billion were allocated for emergency corona relief fund to combat the deadly virus. Out of the total amount, Rs 15 billion would go for settled districts and Rs9 billion for merged areas. Maximum relief has been offered in taxes in budget FY2020-21, adding the reforms in the KP Revenue Authority(KPRA) has yielded consequences as the income has been enhanced from Rs10 billion to Rs17 billion.

Despite COVID-19 challenges, the total income was estimated as Rs36 billion for this year which is 20 percent more than the last year and had COVID-19 not surfaced the total income would have crossed Rs45 billion. The government also recorded that special aspect of the budget was tax relief and tax reforms, adding it was a tax free budget 2020-21 as neither new tax has been imposed nor tax rate was enhanced. Sources recorded that agriculture remains significant and the main cash crops include wheat, maize, tobacco (in Swabi), rice, sugar beets, as well as fruits are grown in the province. Some manufacturing and high tech investments in Peshawar assisted enhance job prospects for many locals, while trade in the province involves nearly every product. The bazaars in the province are renowned in the whole country. Unemployment has been reduced because of establishment of industrial zones.

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