Sindh govt appeals PM to withdraw some budgetary proposals

Karachi, June 09, 2015 (PPI-OT): Sindh government has lodged strong protest against over the federal budget proposed by the Finance Minister Senator Ishaq Dar for 2015-16 and appealed to the Prime Minister to withdraw some budgetary proposals as it detrimental to the Sindh finances and are severely affecting provincial receipts and next year’s budget preparations.

The Senior Minister Finance Sindh Syed Murad Ali Shah lodged this protest in a letter written to Ishaq Dar and pointed out that the Finance Bill 2015 carries some measures, which directly encroached the constitutional domain of the provinces under sales Tax on Services, Gas Development Surcharge, Non-imposition of Excise Duty on Crude Oil, Federal PSDP and this would affect the share of the province from divisible pool taxes.

Officials claimed that these reasons has the main causes in delay of the preparations of the Sindh budget and finally the Sindh decided to lodge the protest to the centre for this injustice.

According to the details mentioned in the letter of the Sindh finance minister the Sindh received its share less than the estimated in federal budget in 2014. According to document the Sindh received Rs287.958bilion up to 31 May 2015 while the share of the Sindh in revised estimated share was Rs381.383billion and as per this estimate the Sindh would have amounted Rs93.425billion. the minister pointed out that more shortfall in this regard would severe financial crisis for the government of Sindh.

It also mentioned that more reduction in revised estimates of straight transfers the finance division communicated that Rs61.499.934million has been fixed as target for budget estimate 2015-16 showing a decrease of Rs 21.123.887 million comparing to budget 2014-15under straight transfers of Sindh. The letter complained that such as massive reduction in targets for 2014-15 and 2015-16 has put the Sindh government in precarious position especially in setting its overall size of the revised estimate 2014-15 and 2015-16.

The Sindh also pointed out that the withdrawal of sales tax on services from banking, insurance services, franchise, telecom, NBFC and restaurants would also affected the Sindh budget. It also pointed out that the amendment in the definition of “services’ in section 2 Clause 33 (1) and (d) of the finance bill 2015 will harm provincial government efforts in levying sales tax on services.

It also mentioned that the Sindh Revenue Board (SRB) not received Rs1.745.56 million from FBR and urged the Islamabad to transfer this amount in mid June.

The Sindh Finance Minister also pointed out that under the PSDP 2014-15, Rs 525billion included an allocation of Rs14.47billion for GOS executed projects in Sindh which was hardly 2.7 percent of the total PSDP. A block allocation of Rs8billion was also kept to beef up the existing allocations. The size of next year PSDP has been augmented to Rs700bilion (including Rs100billion for IDPs). However, only Rs6.7billion has been allocated for schemes being executed by Sindh government in PSDP 2015-16. It is 0.97 percent of the size of PSDP. Therefore, the Sindh government requests to allocate funds at least to the level of the last year’s allocation of Rs 14.47billion for Sindh.

The Sindh Finance Minister also pointed out that the under the agreed joint plan for the greater Karachi Sewerage plan (s3) the federal government provided only Rs829million while Sind government released and proposed allocation for next year will be Rs2.970million. it also made request to the federal government to allocate Rs2.141million in next PSDP to match the funds.

It also mentioned that the K-4 is strategically important project for Karachi and total cost of the project is Rs25.55billion and federal government has agreed to finance 50 percent of the total cost. However the federal budget indicated that FG will contribute Rs2billion for this project which also not credited to the Sindh. This should also require expedited and transferred with the next bi-monthly federal transfers in mid-June.

For more information, contact:
Information and Archives Department
Directorate of Press Information
Government of Sindh
95-Sindh Secretariat 4-B, Karachi
Tel: +92-21-99204423, +92-21-99204401