The federal government has passed the annual budget for the fiscal year 2020-21 and now the attention has shifted to the provincial budgets. The parliament will continue debating and politicians will keep criticising the budget that was passed under stressful circumstances amid a pandemic.
The largest province Punjab will present Rs2.4 trillion budget on June 15 with an annual development budget of Rs437 billion. Prime Minister Imran Khan dashed to Lahore just a day after federal budget was presented to make approvals for the provincial budget.
Economic activities are unlikely to reach its normal situation anytime soon and, hence the Punjab government is considering reducing sales tax on services and providing tax exemption to many sectors. Revenue has fallen and healthcare costs have escalated amid the pandemic while ad hoc relief of increase in salaries is being considered.
The Punjab government has allocated a hefty amount of Rs100 billion for new development projects. This is rather unrealistic as many previous projects have not yet been completed. It will be real test for the Buzdar administration as it presents its second budget under rather different circumstances.
It is unlikely when Sindh will present the budget even through the session will commence from June 15. The provincial government is mulling to hold a virtual session under the circumstances. The outlay of the budget is unknown but the Centre has reduced its share under the 10th NFC transfers.
Sindh Chief Minister Murad Ali Shah has expressed his disappointment over the reduction in budget allocation and has claimed that Islamabad was treating Sindh like a colony. The chief minister was not allowed to speak at the NEC meeting held recently to review the economic situation.
The federal budget also failed to allocate even a single new federally-funded development project for Sindh. A new federally-controlled company called the SIDCL has been formed to carry uplift works even though it is the responsibility of the provincial government to carry out development schemes.
There are currently two different scenarios regarding the budgets of the two main provinces. The prime minister should issue maximum funds to all provinces as it the need of the hour. Such policies will lead to feeling of deprivation and resentment among the smaller provinces.
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