PAKISTAN READER

Dhriti Mukherjee

On 14 June, the PPP government in Sindh presented its budget for FY25, totalling PKR 3.056 trillion, not showing any budget surplus or deficit. Among other measures, the budget proposed a salary hike of up to 30 per cent for government employees and placed a focus on rehabilitation and social protection. Percentage-wise, the development budget for FY25 is roughly equal to that of the current year's estimates of PKR 735 billion, though the PPP government ended up spending a low amount of PKR 529.6 billion under this head. The budget was described as a “record balanced budget” by the Chief Minister of Sindh, Syed Murad Ali Shah. Following are five key highlights of the budget, along with the political response to it.
 
Relief and Development
Maximum emphasis was placed on relief and social development in the budget, with an increase in development expenditure through the allocation of PKR 959 billion for development projects. Shah detailed that the Annual Development Programme (ADP) would not include any new schemes; instead, the completion of ongoing development schemes would be prioritized. The provincial ADP will receive PKR 493 billion and the district ADP will receive PKR 55 billion. Currently, there are 4,250 ongoing schemes with a PKR 305.49 billion allocation. 858 small-nature schemes which are ongoing have been fully funded for completion by June 2025, along with 849 other ongoing schemes with a throw-forward of less than PKR 50 million.
 
From an infrastructure point of view, there was an increase in the allocation for transport and communication to PKR 60.4 billion against PKR 2.2 billion. Water, sanitation, and road sectors will be allocated PKR 71.959 billion compared to PKR 15.7 billion in FY24. The budget paper noted that a “big chunk of funds would be used for construction of new roads and improving the conditions of the existing structure.” Health sector schemes received an increase in allocation from PKR 2.72 billion to PKR 18 billion.
 
Social protection was allocated a significant amount. PKR 34.9 billion would be directed to pro-poor initiatives and PKR 116 billion in subsidies to ease the financial burden. The Provincial Minister for Energy, Syed Nasir Hussain Shah, stated that the government would construct 2.1 million houses for the flood victims. New social initiatives targeting long-term development were also proposed. These include the Hari Card scheme (PKR eight billion for 12 million farmers), an Inclusive Enclave in Korangi (PKR five billion), fiscal decentralization for police stations (PKR 485 million), solar homes (PKR five billion), and a Hub Canal Project for water supply to Karachi (PKR five billion).
 
The agricultural budget was allocated PKR 30.7 billion, a 62 per cent increase from last year, covering the functions of administration/land commission, agricultural research and extension services, plant protection and locust control, information and statistics, and nutrition and hygiene programmes. Shah assured that the government will be “providing financial assistance to all farmers with land measuring 12.5 acres or less without any discrimination.” He added that PKR eight billion will be allocated for “disbursement to farmers based on per acre slabs.” Shah also spoke on PKR 500 million being earmarked for the Benazir Women Agriculture Workers Assistance programme, noting the “pivotal role” played by women in “provincial development.”
 
Education
Education will receive 25 per cent of the total current revenue expenditure through the allocation of PKR 454 billion, compared to PKR 334 billion in FY24. The increase of 36 per cent from last year will cover all levels of schooling, college, and university. PKR 34.5 billion will be given to the Sindh Higher Education Commission (SHEC), a rough 50 per cent increase against PKR 23 billion in FY24; while PKR 6.9 billion will be kept for technical education. Money has also been kept aside for various initiatives such as free textbooks (PKR 7,500 million), purchase of furniture and fixtures (PKR four billion), Sindh Reform Support Unit’s budget (PKR 6.875 billion), reducing out-of-school children (PKR 1.654 billion), and encouraging female literacy (PKR 800 million).
 
The government announced it would upgrade 60 secondary schools to higher secondary schools, and keep PKR 1.2 billion for scholarships to students securing A1 in Secondary School Certificate. Under the SHEC, PKR 23.4 billion will be given to 30 public sector universities. For the education of differently abled children, PKR 6.3 billion was proposed, which will support NGOs and differently-abled persons organizations.
 
Karachi
For the second consecutive year, the government did not announce any new mega-development scheme for Karachi in its budget. PKR 1.389 billion has been allocated for 11 ongoing mega schemes in the city. Of these, the construction of the Korangi Causeway will receive the highest amount (PKR one billion), followed by the construction of a storm-water drain (PKR 100 million), and the rehabilitation of Nehr-i-Khayam (PKR 81.2 million). Long-delayed schemes including the Karachi Circular Highway, the Greater Karachi Sewage Plan, and the Greater Karachi Water Supply Scheme would also be continued.  
 
Transportation within Karachi has also received a fair amount of money, such as the Karachi BRT Red Line (PKR 2.79 billion), Karachi Urban Mobility Yellow Line (PKR 60.97 million), Karachi Orange Line (PKR 850 million), and the purchase of 300 diesel hybrid buses (PKR three billion).
 
Revenue and Expenditures
62 per cent of Sindh’s revenues are expected to come from federal transfers, 22 per cent from provincial receipts, and the remaining from current capital receipts (PKR 21.6 billion), foreign project assistance (PKR 334 billion), federal grants in the form of PSDP 9PKR 77 billion), foreign grants (PKR six billion), and carryover cash balance (PKR 55 billion). Total receipts were divided into the categories of current revenue receipts (including federal transfers, straight transfers, grants, provincial tax receipts) of PKR 21.62 billion, current capital receipts of PKR 21.62 billion, other receipts of PKR 416.92 billion, and carryover cash balance.
 
On the other hand, the estimated total expenditure for FY25 is PKR 1,912.4 billion, an increase from PKR 1,411 billion due to inflationary impact and an enhancement of grants-in-aid. This includes a current revenue expenditure of PKR 1.91 trillion, a current capital expenditure of PKR 184.8 billion, and development expenditure (including ADP, foreign project assistance, federal grants, and district ADP) of PKR 959 billion.
 
Taxes and Salaries
The budget proposed new taxes to generate additional revenue of PKR 76.8 billion, with Shah noting that “Sindh needs a sustainable solution to its ever-increasing financing needs.” With provincial receipts tax revenue estimated at PKR 661.9 billion for FY25, Shah underscored the need for “levying new taxes, rationalising the prevailing regime, assuring relief to poor segments, and capturing the potential revenue from the affluent sections.” A collection target for sales tax on services was set at PKR 350 billion for FY25. The government also announced non-tax revenue at PKR 42.9 billion for FY25, along with a two per cent increase in sales tax to 15 per cent. Further, the Luxury Tax of different values will be enhanced, the rate of Infrastructure Development Cess revised, and the Professional Tax on petrol pumps increased. However, noting that Bilawal Bhutto did not want a new tax on the people, Shah said that any inevitable tax would be on the privileged class.
 
On salaries, for Grade one to six government employees, a 30 per cent increase has been proposed, followed by 25 per cent for Grades seven to 16, and 22 per cent for Grades 17 and above. Pensions of retired government employees will be up by 15 per cent, while the minimum wage was pitched at PKR 37,000 per month considering inflation.
 
Political Responses
The budget received criticism from three political parties- the JUI-F, PTI, and MQM-P.
 
After the JUI-F rejected the “anti-people” budget, the party’s Sindh General Secretary Maulana Rashid Mehmood Soomro said it reflects a “nexus between thieves and watchmen.” She noted that Karachi was denied new development projects, while the youth and women were ignored.
 
The PTI presented a charge sheet against the PPP government, saying that despite receiving PKR 12.633 trillion in budgets during its 15-year rule, there has been no development in Sindh. PTI-Sindh President Haleem Adil Sheikh alleged corruption worth PKR 1.650 trillion over 15 years, adding that the province’s domestic and foreign debt increased, six million children remained out of schools, and both schools and hospitals were ill-equipped.
 
The central committee of the MQM-P also rejected the anti-urban budget and criticized the lack of development schemes for the people of urban Sindh. It noted that while Karachi contributed 97 per cent of the revenue, the government ignored it.
 
References
“JI chief terms budget ‘recipe to destroy national economy’,” Dawn, 17 June 2024;
“Sindh in ruins despite ‘massive budgets’ during 15 years of PPP rule, claims PTI leader,” Dawn, 16 June 2024;
Imran Ayub, “Sindh budget 2024-25: Sindh presents ‘balanced’ Rs3.06tr budget,” Dawn¸15 June 2024;
Shahid Iqbal, “Sindh BUDGET 2024-25: Murad unveils Rs959bn ADP,” Dawn¸ 15 June 2024;
Shazia Hasan, “Sindh budget 2024-25: Govt sets aside Rs454bn for education in next year’s budget,” Dawn, 15 June 2024;
Azfar-ul-Ashfaque, “Sindh budget 2024-25: When it comes to Karachi uplift, Sindh tightens its belt for second year in a row,” Dawn, 15 June 2024;
Gohar Ali Khan, “Agri allocations boosted by 62%,” The Express Tribune, 15 June 2024;
“Sindh unveils Rs3.056tr budget with focus on development, social welfare,” The Express Tribune, 14 June 2024;
“No new mega schemes for Karachi in Sindh budget,” The Express Tribune, 14 June 2024;
“FY25: Sindh govt proposes up to 30% increase in salaries as CM Murad presents ‘balanced budget’,” Business Recorder¸ 14 June 2024

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