Punjab Budget 2015-16: Game plan missing to achieve targets

LAHORE: The Punjab government presented Rs 1.4 trillion budget but it remains to be seen that how receipts and expenditure targets will be achieved in the next financial year.

The last year development budget was 345 billion but by April 30, only 170 billion could be spent. The stark difference between budget estimate and revised estimates for the last year depicts lack of planning from financial managers and raise serious questions on the whole budgetary process.

A comprehensive analysis on Punjab Budget 2015-16 is launched by Centre for Peace and Development Initiatives (CPDI).

Amer Ejaz, Executive Director of Centre for Peace and Development Initiatives (CPDI) said that it has become traditional in Pakistan to present budget in second week of June and after a debate of one week in the assembly, it passes through all the stages.

The yearlong process of budget making is completed in absolute secrecy whereby civil society is not invited during any stage of budget making process. Even the reaction time given after the release of budget is not sufficient for civil society and legislators to make any meaningful contribution.

This is quite in contrast to international best practices where budget proposals are discussed in for several weeks.

Amer Ejaz said that despite commitments from the Punjab government, social sector remains one of the neglected areas in the last financial year.

The Development Capital budget presents sorry state in this regard. This is evident from the revised figures of the last year. Rs. 300 million were allocated to Human Rights and Minorities affairs but not a single penny could be released.

For health, Rs. 11 billion were allocated in the year 2014-15 but it was reduced to half in revised estimates. Higher education received a cut of more than 2 billion rupees. Rs 50 million were allocated for literacy but nothing could be released.

The budget estimates for school education were Rs 398 million but revised estimated shows only Rs 245 million. Similarly 400 million were allocated for special education but revised estimated remains zero. This put a big question mark on the Rs 419 million that are allocated for the current year.

It still remains to be seen that what percentage of special education budget the Punjab government will release for the next financial year. Of Rs 163 million allocated for Information technology, only Rs 3 millions could be released.

The other side of the development budget, development revenue budget, also portrays a similar picture. Rs 7.5 billion were allocated for agriculture research, but revised estimates are Rs 1.3 million. The Punjab government has claimed that energy is its priority area.

Rs 18 billion were allocated in last year but revised estimates shows that it will get only Rs 8.8 billion. Of Rs 7.7 billion allocated for health, the final figures will not be more that 5 billion.

Rs 2.2 billion were allocated to literacy, but final allocation will be around Rs 217 million only. This last year scenario automatically depicts that next year figures will be paper commitment and government will again fail to release the money committed in the budget.

Syed Kausar Abbas, Program Manager of Centre for Peace and Development Initiatives (CPDI) The white paper issued by the Punjab government talks vehemently on tax reforms and improving the rusty tax collection machinery of the Punjab government.

The estimates of receipts do not support the Punjab government claims. One striking point is Agriculture income tax whereby total collection in year 2013-24 was Rs 990 million.

During the year 2014-15, it was estimated to collect Rs 2 billion but not more than 1 billion will be collected. It is again budgeted for Rs 2.3 billion for the next year. Again this leaves a major question mark that how this extra one billion will be collected.

With more than 3.8 million farming families and Rs 12.5 million hectares of cultivated areas in Punjab, the collection targets and procedures warrants serious revision.

Kausar Abbas said that another area of under achievement in the Punjab is professional tax. This tax is levied on Professions, trade and Callings. With more than 200000 registered doctors and lawyers in the province, the estimated receipts are only Rs 770 million.

This target is more and less same as was in the current year. This means that no revolutionary attempts will be made to broaden the tax net. Similarly, the target for sales tax on services for the year 2014-15 was estimated at 93 billion but not more than Rs 46 billion will be collected. The budget documents failed to explain that how Rs 73 billion for the next year will be collected.

The district profile of development budget also presents very interesting picture. It shows that money will continue to siphon off to Lahore, Rawalpindi, Gujrat and Faisalabad with many of the underdeveloped districts ignored.

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