Pakistan Reader

CWA # 1353
Pakistan Reader
Punjab budget 2024-25: Prioritising Health and Initiatives

Vetriselvi Baskaran
21 June 2024
Photo Source: Dawn

On 13 June, the Punjab government led by PML-N presented its annual budget for FY25 worth PKR 5.45 trillion with a surplus of PKR 630 billion. The budget speech in the Punjab assembly was delivered by Punjab Finance Minister Mujtaba Shujaur Rehman, and noted the surplus budget is for the implementation of the roadmap set by Punjab’s Chief Minister Maryam Nawaz in her first 100 days of the government. He stated: “Today, we have begun the development of the province. Today, we are presenting Punjab’s biggest ever tax-free and surplus budget.”
The budget witnessed significant allocations spanning from education to the introduction of news schemes and it estimates over PKR 4.643 trillion in revenue, with PKR 4.816 trillion expenditure. Additionally, the government will get PKR 3.683 trillion as an NFC award from the federal divisible pool. The estimated revenue collection for the FY25 is PKR 960 billion, in which PKR 300 billion comes from the Punjab Revenue Authority (PRA), PKR 105 billion from the Board of Revenue, PKR 57 billion from Excise and Taxation, and PKR 488 billion from non-tax revenue.

Annual Development Plan
Finance Minister Mujtaba Shuja unveiled Annual Development Plan of PKR 842 billion reflecting the five-year priorities. It allocated 33 per cent to the social sector, 29 per cent to infrastructure, 13 per cent to production, 5 per cent to the services sector and 20 per cent for special initiatives. Almost of the total ADP focusses on ongoing schemes and new projects.
In social sector, Education secured PKR 65.5 billion inclusive of school education, higher education and special and non-formal education. The CM’s meal plan, the new scheme procured PKR 500 million. The services sector centres on governance and IT.
For infrastructural development, the funds will go to new schemes like establishment of garment cities in Punjab and rehabilitation of major road projects including Muzaffargarh-Tarinda Muhammad Panah (PKR 31.48 billion), Multan-Vehari (PKR13 billion), and Burewala-Vehari (PKR 12 billion).

Salaries and pensions
The provincial budget allocated PKR 603 billion for salaries with proposed 25 per cent increase in the salary of the government employees (grade 1 to 16) and a 20 per cent increase for the officers (grade 17 to 22) and 15 per cent increase in pensions (PKR 857 billion). PKR 857 billion allocated for the local governments.
The minimum wage has also been increased from PKR 32,000 to PKR 37,000, along with an increase in various provincial fees, court fees, and taxes.

Agriculture and real estate
Despite pressures from the IMF, the budget did not hint at taxes for the agriculture and real estate sectors. The IMF had called for taxes on the agricultural sector on par with normal personal income tax rates. At present, agricultural sector is being taxed at a much lower rate than normal personal income. In real estate sector, the provincial government collects one per cent stamp duty and corporation or TMA fees on the total District Value rate of the property while transfer process.

Agricultural sector has been allocated with PKR 64.6 billion including foreign aid. Irrigation department given focus. Of this, the major share diverted to the CM initiative, Kisan Card package which provides interest free loans of PKR 75 billion to 0.5 million farmers and provision of tractors on instalments through “CM Green Tractor Programme.” On-farm water management and agricultural transformation plan has been implemented. Other than this, Agricultural research, agricultural education, soil survey, pest warning and quality control are the aspects the province focussed in this budget. In addition, the province would spend PKR 9 billion on solarisation of 7,000 tube-wells.

Amendments to the Punjab Urban Immovable Property Tax Act of 1958 will introduce a self-assessment mechanism and proposed that property tax in urban region will be collected under the DC value instead of the rental table. The government will have the power to declare any property as a high-value property. Property owners will be given a procedure based on which they can self-assess their property, though this will be subject to an audit by an assessing authority. Any attempt to underpay or evade tax would result in a fine.

In failure to self-assessment of an individual, two weeks of grace period will be provided. In addition, it has been proposed that the residential property worth PKR 5 million will be exempted from the capital value tax collection and for the same value of commercial property, 0.07 per cent rate of tax will be collected. The tax for the property of both commercial and residential, worth of above PKR 5 million and up to PKR 10 million will be collected at a rate of 0.07 per cent, above PKR 10 million and up to PKR 25 million will be taxed at 0.08 per cent rate and for the property above PKR 25 million will be 0.09 per cent.

Health
The Punjab government allocated the largest portion, PKR 539.1 billion for the health sector which is 25 per cent increase from the previous year’s budget. The major emphasize were given on the revamping and rehabilitation of public hospitals, disease screening for children, and upgrading hospital infrastructure. Of the total budget, PKR 410.5 billion has been diverted for non-development and the rest for the development initiatives.          
           
The government allocated PKR 86 billion to the Specialised Health Care and Medical Education Department and PKR 42.6 billion to the Primary and Secondary Healthcare Department (54 per cent increase from FY24). Proposition for the Punjab Institute of Mental Health’s renovation of old blocks, consultation services of Narowal Medical College, ICU facilities in the Children’s Hospital at Lahore, for setting up a Project Management Unit, revamping Rural Health Centres (RHCs), and for upgrading Basic Health Units (BHUs) in North and Central Punjab has been made.
Similarly, the budget proposes for the provision of free medicines to poor and deserving patients in the outpatient departments (OPDs) of the public hospitals (PKR 55billion). Pakistan Kidney & Liver Institute (PKLI), Integrated, Reproductive Maternal Newborn and Child Health and the provincial TB programme were considered for allocations.

New initiatives
Some of the new initiatives the province proposed during budget follows:

  1. Chief Minister Roshan Gharana Programme aims to provide relief to people affected by exorbitant power bills with provision of providing free solar systems to people who consume up to 100 units of electricity with installation charges.
  2. Garment city initiative to boost the foreign exchange and the promotion of textile industry.
  3. Khelta Punjab scheme is to promote sports
  4. CM Punjab Laptop Scheme to encourage the province’s youth learn IT skills (PKR 10 billion)
  5. Air ambulance service in the province with allocation of PKR 0.40 billion and ‘clinic on wheels’ for prompt ambulance services.

Political response  
In response, the opposition rejected the proposed budget, chanting slogans and protests. As the uproar escalated, Minister Sohaib Bharat and MPA Ghazali Saleem Butt intervened to stop the opposition from reaching the government benches. However, physical confrontations between two ministers and opposition members took place. The budget papers were ripped and were criticized as a “fraudulent budget” by the opposition.
 
References
“Punjab allocates Rs128.6b for healthcare,” The Express Tribune, 14 June 2024;
Khalid Hasnain, “Punjab unveils Rs5.45tr surplus budget,” Dawn, 14 June 2024;  
“Opposition denounces Punjab budget,” Business Recorder, 14 June 2024;
“Budget 2024-25: Punjab plans Rs842bn for development,” Dawn, 20 June 2024;
“Budget FY2024-25: Punjab govt presents Rs5.4 trillion ‘tax-free’ budget,” Business Recorder, 13 June 2024;
Asif Chaudhary, “Budget 2024-25: Punjab raises health budget by 24pc,” Dawn, 14 June 2024


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