Punjab presents Rs2.5tr budget for next fiscal year

The proposed budget for FY22 is 18pc higher than FY21

LAHORE: Punjab Finance Minister Makhdoom Hashim Jawan Bakht has presented the budget of the new fiscal year 2021-22 in the traditional blare of the opposition in the budget session in the Punjab Assembly.

Addressing the Punjab Assembly, the provincial minister said that the total budget for the coming fiscal year has been proposed at Rs2,653 billion, which is 18 percent more than the previous FY.

“The federal revenue collection target for the next FY is expected to be Rs5,829 billion, which will transfer Rs1,684 billion to Punjab under the NFC award and it will be 18 percent more than the current FY. The target for provincial revenue is Rs405 billion, which is 28 percent higher than the current FY.

“Expenditures in the budget are estimated at Rs1,428 billion whereas record funds of Rs560 billion are being allocated for the development programs of Punjab. This extraordinary 66 percent increase in the development budget in one year is undoubtedly a reflection of our development priorities. I am confident that this development program of our government will guarantee the development of the province, the stability of the economy and the well-being of the people and its fruits will reach the corners of Punjab,” Bakht said.

Referring to the proposed budget for health and education, Bakht said that RS 205.50 billion has been allocated for the social sector i.e. education and health in the development budget of the coming FY, which is 110 percent more than the current FY.

“The Punjab government has allocated Rs145.40 billion for infrastructure development which is 87 percent more than the current FY. A total of RS 91.41 billion has been allocated for special programs which is 92 percent more than the current FY.

“In the development budget, RS 57.90 billion has been allocated for economic growth in productive sectors including industry, agriculture, livestock, tourism, forestry etc which is 234 percent more than the current FY. The Punjab government is going to complete the first mega project in the history of the province which has been started by DG Khan and Sahiwal,” he said.

“Under this project, 100 per cent of the population of Punjab are being provided health insurance of Rs80 billion for treatment from the government and non-government hospitals. Rs60 billion is being allocated in the current FY for this project which will be completed in the next six months. The second major problem in the health sector is maternal mortality due to lack of access to hospitals and inadequate facilities.

“To reduce this, the establishment of 5 new mother and child hospitals is being ensured this year for which a budget of over Rs12 billion has been allocated. The overall health budget for the next FY has been set at RS 369 billion, which is 30 percent more than the current FY. Similarly, RS 96 billion has been allocated for development expenditure while Rs273 billion has been allocated for ongoing expenditures,” he added.

The provincial minister said that the biggest problem of Punjab in the field of education was the enrollment of children in schools and education above the primary level in backward areas especially the education of girls.

“To this end, 577 primary and elementary level schools in 22 districts of Punjab are being given the status of middle and high schools under the Insaf School Program so that parents who drop out of school due to distance from home after primary level ensure free education at least till matriculation.

“For this purpose, Rs6.80 billion is being provided in the education budget from which at least 4 million students will benefit. Establishment of 8 universities in Pakpattan, Rajanpur, Gujranwala, Attock, Hafizabad, DG Khan, Nankana Sahib, Bhakkar, Layyah, Multan and Sialkot to provide higher education facility to every district in the field of higher education and it is proposed to allocate Rs1.20 billion for this purpose,” he said.

“A world-class applied engineering and technology university is being constructed in Sialkot with the cooperation of Austria at a total cost of Rs17 billion which will prove to be an important milestone in the field of technical education. In a show of devotion and love for the Holy Prophet (PBUH), a block of Rs834 million has been set aside for Mercy Scholarships which will help the needy students in their educational expenses. The total education budget has been set at Rs442 billion, which is 13 percent more than last year. Rs54.22 billion has been allocated for development expenditure while Rs388 billion has been allocated for ongoing expenditure,” Bakht explained.

The provincial minister further said that a separate secretariat with 55 administrative and 11 financial powers has been set up in South Punjab to address administrative shortcomings.

“Development funds of Rs189 billion have been allocated for South Punjab in the next FY. The Punjab government is proposing to allocate a hefty amount of about Rs1 billion for the development of Cholistani areas in South Punjab, under which roads will be constructed for access to drinking water reservoirs and Cholistani area.

“In addition, it is proposed to allocate Rs150 million for locust control in Cholistan and rainfed areas. Ongoing projects supported by Development Partners include completion of assets worth over Rs2.34 billion under the South Punjab Poverty Alleviation Program which includes the transfer of assets including the construction of low-cost houses for poor women, technical skills and provision of goats will be completed. An amount of Rs15 billion is being allocated for the completion of projects under the Community Development Program in Punjab.

“These projects will not only strengthen human development but also increase the human capital and reaffirm the commitment of the government of Pakistan to international organizations under the SDGs. The unbalanced distribution of resources during the ten years of the previous government has affected not only South Punjab but also most of the districts of Central Punjab have been underdeveloped,” Bakht said.

“The District Development Program of Rs295 billion in the Annual Development Program for the next FY will improve the provision of services as per requirement in 36 districts of Punjab without any allocation in the next two years. Under the project, development works related to construction and repair of roads, supply and drainage, basic education and health in backward areas will be carried out which will raise the living standards of the people and create new employment opportunities for which future financial Rs99 billion has been allocated in the annual budget,” he said.

Bakht further said that in view of the central and commercial importance of Lahore, a significant amount of Rs28.3 billion is being allocated for development projects in the budget for the next FY and under this mega infrastructure projects will be implemented in the city.

“Considering the severe water shortage in Lahore, a Surface Water Treatment Plant is being set up for which more than Rs1.5 billion is proposed to be allocated in the next fiscal year. Our government is going to start the construction of a state-of-the-art 1,000-bed hospital this year. A special package of Rs10 billion for economic development in the development program of the next FY is a link in this chain. With this special package of Rs10 billion, the Punjab Government has decided to continue the tax relief provided for business rehabilitation and development in the current financial year as well as in the next FY,” Bakht explained.

“For this purpose, a comprehensive package of Rs51 billion has been allocated in the budget under which the rate of stamp duty on taxes will be maintained at 1 percent by the Board of Revenue. The Rs40 billion concession will be aimed at encouraging new investment in the construction sector. The Punjab sales tax rate on more than 25 services which was decreased from 16 percent to 5 percent in the current FY will be maintained in the next FY as well.

“These services include small hotels and guest houses, wedding halls, lawns, venues and awning services and cadres, IT services, tour operators, gyms, property dealers, rent a car service, cable TV operators, Treatment of Textile and Leather, agricultural Commodity related agents, Auditing, Accounting & Tax Consultancy Services, Photography and Parking Services.”

“Similarly, proposals are being made to reduce sales tax on ten more services from 16 percent to 5 percent in the next FY and these new services include beauty parlours, fashion designers, home chefs, architects, laundries and dry cleaners, supplies of machinery, warehouses, dress designers and rental bulldozers. It is proposed to reduce the tax rate on call centres from 19.5 percent to 16 percent,” Bakht added.

“In the current FY, the tax rate for cash payments for restaurants was 16 percent while for credit or debit card payments it was 5 percent. This not only helped in documenting the economy but also made the move much appreciated by the people. It is also proposed to increase the tax rate on payments through mobile wallet and QR code to 5 percent for the next FY. Under the Excise, Taxation and Narcotics Control Department, property tax will be paid in two instalments in the next FY as well as in the current FY.

“It is proposed to limit the surcharge penalty on property tax and motor vehicle tax to only the last two quarters of the next financial year. To encourage the purchase and sale of electric vehicles to control environmental pollution, electric vehicle registration fees and token fees will be reduced by 50 percent and 75 percent respectively,” he said.

“In view of the importance of industry and trade in economic development, projects like Allama Iqbal Industrial City Faisalabad, Bahawalpur and Industrial Estate in Sialkot and Quaid-e-Azam Business Park Sheikhupura covering an area of 2800 acres are under construction.

“Development works in Faisalabad and Lahore industrial estates will be completed on priority basis. To achieve such objectives, funds of RS 3.5 billion are being provided to boost economic and industrial activities. Sialkot Tannery Zone is being set up at a cost of Rs50 crore in collaboration with the Sialkot Chamber of Commerce and Industry for which Rs35 crore is being allocated in the next FY. Loans are being provided on easy terms under the Punjab Employment Program at a total cost of Rs10 billion,” he informed.

The provincial minister said that the government was setting up a model bazaar authority under which model bazaars would be set up in all major cities of Punjab and a significant amount of Rs1.5 billion would be allocated for this purpose next year.

“The government is launching a comprehensive road construction, repair and expansion plan from next FY. Under this project, 1769 development schemes worth Rs380 billion will be launched across the province under which construction, repair and extension of 13,000 km long roads will be completed. A significant amount of Rs58 billion is being allocated for this purpose. The federal government has agreed to provide financial resources for a comprehensive program of construction and expansion of modern highways in the province.

“For which, funds of Rs39 billion have been allocated in the next fiscal year. In addition, a CM Road Rehabilitation Program worth Rs8 billion is being launched under which the construction and rehabilitation work of dilapidated roads of the province will be completed. In total, a record amount of Rs105 billion will be spent on road construction, expansion and rehabilitation projects in the province next year. The Punjab government is introducing the Peri-Urban Housing Scheme in the next financial year under which an average house will be available at a cost of Rs1.4 million.

“Under this project, funds of Rs3 billion have been allocated for infrastructure development. Similarly, under the Naya Pakistan Housing Program, we are providing Rs1 billion, which will enable people to build houses in a manner developed in collaboration with private developers. In addition, funds of Rs22.44 billion are being provided for the provision of modern infrastructure and civic amenities in the cities of Punjab,” Bakht said.

“In the next financial year, the development budget of the Department of Agriculture is proposed to be increased from Rs7.75 billion to Rs31.50 billion with a historic increase of 306 percent. Subsidies on purchase of fertilizers, seeds and pesticides, crop insurance, provision of loans on easy terms from Rs5.82 billion to reduce the cost of farmer’s prosperity and crop production.

“It is proposed to allocate a total of Rs5 billion for livestock and dairy development and to allocate a total of Rs4 billion for the tree planting sector. A hefty sum of Rs4.5 billion has been allocated for the Punjab Social Protection Authority which will benefit 460,000 people. More than Rs12 billion has been allocated for the Punjab Ehsas program next year with the cooperation of the federal government, which will benefit another 700,000 people,” he added.

“The Punjab government has taken special steps to promote religious tourism and more than RS 2 billion is being allocated in this regard. In the development program for the financial year 2021-22, a budget of Rs1.25 billion has been proposed for the Punjab Tourism Department. A special block of Rs8 billion is being set up in the budget for the next financial year to maintain law and order,” he said.

Speaking about the salaries of government employees, the provincial minister said that the salaries of all government employees would be increased by 10 percent.

“However, the salaries of more than 721,000 government employees from Grade 1 to Grade 19 who have not been given any additional allowance package before are being increased by another 25 percent in terms of Special Allowance. It is also proposed to increase the pension of retired employees by 10 percent. The daily wagers of the country have always been closest to our hearts so it is not possible for us to ignore them. In the budget for the next FY, the minimum wage of our labour is being increased from 17,500 per month to 20,000 per month,” he concluded.

Shahab Omer
The writer is a member of the staff and can be reached on [email protected]

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