Daily Times Editorial June 15, 2015

Sindh budget Sindh Finance Minister Syed Murad Ali Shah presented a Rs 739.3 billion budget for 2015-16 amidst uproar and protests by the opposition, most of whom walked out twice, the second time not to return, on the basis that none of their proposals had been considered in the budget. The only exception was the Muttahida Qaumi Movement (MQM), which listened quietly to the finance minister’s budget speech but later it transpired that they were not as sanguine as they appeared. The MQM gave a strike call for Sunday against what they called an anti-people budget that had nothing for the poor, but which on closer examination turned out to be what they perceived to be an anti-urban areas bias in the budget. The strike lasted half a day, Sunday being a closed holiday, and must have come as a relief to Prime Minister Nawaz Sharif, who only the other day underlined the need to stop frequent strikes in Karachi that negatively impact the economy. No amount of pleading by the Speaker of the Sindh Assembly for patience in the house nor the arguments of the finance minister regarding allocations for the urban areas, particularly Karachi, succeeded in overcoming the almost universal opposition parties’ condemnation. As to the budget itself, a total outlay of Rs 739.3 billion falls short by Rs 12.73 billion from the total expected receipts of Rs 726.57 billion. The Annual Development Plan (ADP) envisages an outlay of Rs 214 billion, financed by Rs 177 billion from provincial resources, federal transfers and grants Rs 9.6 billion, and foreign project assistance of Rs 27 billion. Given Sindh’s security and law and order problems of long standing, especially in Karachi, it comes as no surprise that the allocations for the police and Rangers are up to Rs 61.84 billion and Rs 2.448 billion compared to last year’s Rs 50.915 billion and Rs 2.22 billion respectively. There is a proposal to recruit 10,000 policemen to improve the police-citizen ratio, particularly in Karachi. Education and health receive 7.6 percent and 32 percent more this year at Rs 144.67 billion and Rs 57.49 billion compared to last year’s Rs 134.37 billion and Rs 43.48 billion respectively. The security and law and order allocation may be a necessity, but the attention to the social sector reflected in these figures deserves mention and appreciation. Electricity receives Rs 25.9 billion, but the horrifying fact is that Rs 25 billion of this is earmarked to clear the electricity outstanding dues of various government departments! And then we wonder why the power sector is in crisis and beset with recurring cycles of circular debt. The electricity allocation in the ADP is Rs 16.5 billion, most of which will go to renewables (mostly solar) and whatever is left over to the (still in the seeming doldrums) Thar coal power projects. Roads and irrigation receive Rs 8.5 billion and Rs 17.685 billion respectively. Government employees’ basic pay has been increased by 10 percent, medical allowances increased by 25 percent, and the minimum wage aligned with the Centre and Punjab at Rs 13,000 per month. Karachi’s transport, water supply (a major crisis currently), sewerage and waste management get Rs 49.73 billion but this seems to have been dismissed by the MQM as ‘peanuts’. The biggest problems besetting the provinces after the 18th Amendment is that they have been transferred many new subjects, but without necessarily the requisite transfer of resources or provincial capacity to take on these responsibilities. The National Finance Commission (NFC) Award has yet to be updated, transfers from the Centre are either lagging in practice or even, as in the case of Sindh this year, slashed to Rs 9.6 billion from Rs 22.457 billion last year, an unprecedented reduction of 57.2 percent. This is hardly likely to induce the provinces to seriously take up capacity building and management of all the new subjects transferred to them from the concurrent list as a result of the 18th Amendment. The Centre and the provinces need to come together on the pending issue of the NFC Award and federal transfers, in order to allow the provinces to manage their finances and affairs better.