QUETTA: Adviser to the Balochistan Chief Minister on Finance Dr Ruqayya Saeed Hashmi presented the budget 2018-19 in the provincial assembly.
The budget documents show that Balochistan is facing a big hole of Rs61.9 billion in its planned development investment of Rs88.2bn for the next financial year as the pace of growth in its total income is projected to slow down to 4.9pc against 9.3pc estimated for 2017-18.
The slower increase in income and a large development investment gap notwithstanding, the province plans to create 8,035 new jobs in education, health, levies and other departments that will have a total financial impact of Rs4.1bn on the new budget.
The budget documents project the overall provincial income — federal transfers, provincial tax and non-tax receipts, foreign and domestic loans, etc — to increase by just Rs13.8bn to Rs290.2bn in 2018-19 from the current year’s estimates of Rs276.4bn. This compares with an increase of Rs23.6bn in provincial income this year.
In spite of a slower growth in its income, the provincial government has decided to raise its total outlay of development and current spending by almost a quarter to Rs352.3bn from Rs328.5bn. This means the province will be left to search for additional resources and / or try to cut its current expenditure drastically to fund its development spending next fiscal year.
The funding for current budget that constitutes about three quarters of the total outlay has been hiked by 8.8pc. The provincial development programme that forms a quarter of the budget outlay has been increased by a mere 2.2pc because of resource constraint.
Almost 80pc of the provincial income will comprise federal transfers from the divisible pool (Rs224.1bn) and straight transfers (Rs9.0bn) with provincial own taxes contributing 3.5pc or Rs10.2bn and non-tax receipts 1.6pc or Rs4.9bn to it. The rest of the provincial income will be generated through foreign project loans and grants of Rs9.2bn, commercial loans of Rs6.7bn for state trading in food and a floating debt of Rs15.7bn (from the State Bank of Pakistan).
The budget details show that the growth in provincial income is affected by a slowdown in federal transfers as straight transfers (excise duty on natural gas, royalties on crude oil and natural gas, and gas development surcharge) are expected to almost halve to Rs9.0bn. Besides, the projected sharp decline in recoveries and loans to a mere Rs284.9 million from Rs5.3bn is also projected to impact on the overall provincial income.
The provincial expenditure on pay and pension, grants, and subsidies make up around three quarters of the total current expenditure Rs263.9bn or 90pc of its total income. The provincial pension bill alone has increased by an average 27pc during the last three years and is estimated to rise by 33.3pc next year. The undefined “purchase of assets” will eat up 27.7pc of the current budget with salaries and allowances of provincial employees registering a growth of 12.8pc, and debt and interest payments rising by 14.8pc.
Development and non-development allocations for the priority sectors show that Balochistan will spend 25.4pc of its revenue, including foreign loans, on education, 16.4pc on security, 8.7pc on health and 6.6pc on energy.
The budget speech of Dr Ruqayya Saeed Hashmi was more a repetition of what her predecessors had been saying for the last four years, insisting that the completion of the China-Pakistan Economic Corridor (CPEC) initiative and development of the province’s natural wealth would change the fate of its people one day.
“I firmly believe that investment being made in Balochistan will contribute to the development of the province and Pakistan. We have recently passed a bill to encourage domestic and foreign private investment here in the public-private mode,” she noted, adding the allocation for development investment for the present year had been revised down to Rs76bn from Rs86bn (because of resource shortfall).
She also dilated on the measures the government was taking to improve security conditions in the province to attract private investment, and develop mineral, industrial, agricultural, fisheries and other sectors in addition to enforcing a strict financial discipline to create room for development.
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The 2018 Boao Forum for Asia (BFA) annual conference is scheduled for April 8 to 11 in Boao, Hainan Province. The forum will be themed "An Open and Innovative Asia for a World of Greater Prosperity."
— The Daily Mail - People's Daily