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Punjab Finance Minister Mujtaba Shujaur Rehman presented in the provincial assembly a Rs782.859 billion budget for the year 2012-13 against expected revenues of Rs780.674 billion carrying a deficit of Rs2.184 billion, despite additional federal transfers of over Rs117 billion.
The budget document, however, claims that deficit is Rs30 billion as after accounting for revenue expenditure of Rs532.859 billion, the government is left with a net revenue account surplus of Rs247.814 billion. However, there is a shortfall of Rs39.480 billion in the current capital account. The current capital receipts are only 15.558 billion against current capital expenditures of Rs55.039 billion. Thus the surplus for development is reduced to Rs208.334 billion. This amounts to a shortfall of Rs41.665 billion in the development allocations of Rs250 billion. To finance this deficit, the provincial government expects foreign project assistance of Rs11.487 billion and Rs178.416 million from the public account. There is thus an operational shortfall of Rs30 billion that has been mentioned in the budget document.
The finance minister announced a tax-free budget and despite a substantial deficit the Punjab government failed to bring many services sectors like doctors, lawyers, engineers, beauticians etc under the provincial sales tax regime. The collection of agricultural income tax also remained dismal in the ongoing year at Rs715.45 million and the estimates for 2012-13 have been nominally increased to Rs720.52 million.
This regime though did succeed in increasing property tax from Rs2.877 billion in 2010-11 to Rs7.596 billion in 2012 while the property tax collection estimates for 2012-13 are Rs9.859 billion.
The current expenditures of the province increased from Rs467.99 billion in 2011-12 to Rs532.859 billion in 2012-13 while the development expenditure has been increased from Rs165.511 billion to Rs250 billion.
The Punjab government, like all other provincial governments, is riding high on the federal transfers during the last three years. The federal transfers were Rs419 billion in 2010-11, 533.83 billion in 2011-12 and are expected to be Rs650.735 billion in 2012-13.
The provincial receipts during last three years, however, increased nominally during this period. In 2010-11, the total tax and non-tax revenues of Punjab were Rs120.32 billion that increased to Rs133.621 billion in 2011-12 and the estimates for 2012-13 are Rs129.93 billion.
The Punjab government announced many public appeasing allocations in the election year. It allocated Rs4 billion for distribution of laptops among students, Rs500 million allocated for the youth festival. The government promised to hire 80,000 youth in the next fiscal year. The provincial government also announced increasing the minimum wage to Rs9,000, which is Rs1,000 higher than the minimum wage fixed by the federal government.
The green tractor scheme and the yellow cab schemes would continue in 2012-13. The allocations for green tractors and laptops have been included in the annual development program.
The Punjab government also announced increasing the salaries and pensions of its employees by 20 per cent from July 1, 2012-13. This is in line with the increase announced by the federal government.
The amount of other subsidies has been increased to Rs34 billion fromRs30 billion last year. Out of which, Rs27.50 billion would be spent on keeping Atta (flour) rates stable, Rs4 billion have been allocated for a Ramazan package. The transport subsidy is estimated at Rs2 billion and Rs1 billion have been reserved for providing solar panels to 50,000 poor families.
The Punjab government allocated Rs9 billion last year for power generation projects and the allocation this year has been increased to Rs10 billion. However, the proposed 500MW project to be started in the ongoing year was not initiated.
General public expenditures of the Punjab government increased from Rs269.697 billion in 2011-12 to Rs305.300 billion in next fiscal. The police budget has been increased from Rs59.825 billion to Rs62.251 billion. The original estimates for police were Rs52.788 billion.
Meanwhile, a meeting of the Punjab cabinet was held under the chairmanship of Chief Minister Shahbaz Sharif at his Minar-e-Pakistan tent office, which gave formal approval to the provincial budget for the fiscal year 2012-13.
The meeting also gave approval to the finance bill and revised estimates of provincial budget 2011-12. Finance Secretary Tariq Bajwa informed the meeting about the salient features of the budget for the year 2012-13.
The meeting was informed that deduction in the salaries of provincial cabinet members had been enhanced from 25 percent to 30 percent whereas their quota of petrol has been cut by half. The objective of this initiative is to enhance resources through austerity and spend them on the welfare of masses.
The chief minister, while addressing the meeting, thanked the assembly members, the Planning & Development and the Finance departments, the provincial secretaries and other officers concerned and hoped that the next budget would accelerate the pace of progress and development, ushering in a new era of prosperity in the province.
Punjab presents Rs782.859 bn deficit budget - thenews.com.pk
point to remember punjab's budget went in deficit when Nawaz Sharif was Chief minister.
