The Punjab government presented the budget for the fiscal year 2021-22 with an estimated outlay of Rs. 2.653 trillion, including an Annual Development Program (ADP) worth Rs. 560 billion.
The budget session was held in the newly-constructed building of the Punjab Assembly, where Punjab Finance Minister, Hashim Jawan Bakht, presented the budget.
Like the Federal Government, the Punjab government has also announced that it is levying no new taxes. The total outlay of this budget is 18 percent higher than the current fiscal year’s budget.
Hashim said a target of Rs. 405 billion has been set for provincial tax collection, which is 28 percent more than the current fiscal year.
The government expected to get Rs. 5,829 billion from the Federal Divisible Pool and is expected to get Rs. 1,684 billion from the National Finance Commission (NFC) Award.
In line with the federal budget, the pay and pension have been increased by 10 percent, while the minimum wage has been increased from Rs. 17,500 to Rs. 20,000 per month.
The current expenditure estimates in the budget are around Rs. 1,428 billion. The government has increased the development budget by 66 percent.
All the expected revenue resources have been utilized in the budget, with an expected surplus at Rs. 125 billion. This increases the risk of the development budget being curtailed, in case of any unexpected major shortfall in federal transfers.
This would also mean that in case of the absence of funds, the development projects will be delayed, which not only increases the cost of the project but also disturbs the entire development planning.
Hashim said that 34 percent of the total annual development budget (Rs. 189 billion) has been allocated for South Punjab. A separate secretariat has also been established for South Punjab, and 55 administrative and 11 financial powers have been transferred to that secretariat. People of South Punjab will now get a 32 percent quota in government services as well.
Furthermore, Rs. 12 billion is allocated for industrial sector development, and over Rs. 28 billion has been earmarked for Lahore, considering its importance as a business hub, the minister said, adding that in view of water shortages in Lahore, the government is establishing a surface water treatment plant for which Rs. 15 million have been earmarked this year.
Moreover, Rs. 370 billion has been allocated for the health and education sector, and additional Rs. 96 billion for the development budget of the health sector, which is 182 percent more than the current fiscal year.
The government is also initiating a universal health insurance program with the allocation of Rs. 82 billion. Under this program, 100 percent population of Punjab will get free and quality health services. It is expected that government will issue health cards to 110 million people of the province.
The education sector gets Rs. 442 billion in this budget, which is Rs. 51 billion more than the current year. More than Rs. 54 billion has been earmarked for the development budget while Rs. 388 billion has been allocated for the current expenditure under this head.
The government has allocated Rs. 15 billion for higher education which is 285 percent more than the current fiscal year.
The budget for agriculture development projects has been increased three-fold to ensure food security and increase agricultural productivity, the minister said.
The provincial government has allocated more than Rs. 31 billion for the agriculture transformation and Rs. 100 billion for Agriculture Transmission Plan. Moreover, Rs. 55 billion has been set aside for the irrigation sector.
Additionally, Rs. 5 billion each is allocated for livestock and dairy development projects and the improvement of watercourses.
The government has also proposed tax concessions of Rs. 50 billion to provide relief to the public and to assist businesses. No change has been made in the rate of stamp duty, which will remain at 1 percent.
The ratio of sales tax on services will also remain at 5 percent, but the government has proposed a reduction of the tax ratio on call centers from 19 percent to 16 percent.
This is the fourth budget by the incumbent government. The first budget was presented by PTI for nine months in October 2018.