BUDGET (RE-2019-20 & BE-2020-21)

By: NOOR-UL-HAQ BALOCH Secretary Finance, GoB

20th June 2020

PRESENTATION TO PROVINCIAL CABINET ON

Contents:RevisedEstimatesforFY2019-20

SupplementaryBudget2019-20

BudgetEstimatesforFY2020-21

SNE(Creationofnewposts)-FY2020-21

FinanceBill2020

BalochistanTaxRevenueMobilizationStrategy

TaxReliefMeasures

REVISED ESTIMATES

FY 2019-20

RevisedEstimatesforFY2019-20Revenues: B.E 2019-20 R.E. 2019-20

Ø  Total Federal Transfers 304.983 306.051 Ø  Total Provincial Receipts 38.856 25.072 Ø  Total Capital Receipts 13.468 5.851 Ø  Federal Development Grant 14.906 20.236

Total Revenue 372.213 363.676

Expenditure: Ø  Non-development Expenditure 293.580 276.151

Ø  Foreign Funded Projects 7.561 9.372

Ø  Federal Funded Projects 18.210 20.436

Ø  Provincial PSDP (Local) 100.572 74.368

Total Expenditure 419.923 380.327

SUPPLEMENTARY BUDGET

FY 2019-20

SupplementaryBudgetStatement–2019-20FUND Sector/Service Function AMOUNT

(In millions) CURRENT EXPENDITURE

BC21001 General Administration 806.174 BC21002 Provincial Excise 49.136 BC21007 Administration of Justice 480.139 BC21010 Jails and Detention Places 17.616 BC21013 Civil Works (including Establishment Charges). 866.467 BC21015 Works Urban Q-WASA 329.204 BC21018 Health Department 1,599.23 BC21021 Admn. Sport and Recreation Facilities 178.02 BC21022 Social Security & Social Welfare Department 558.767 BC21023 Natural Calamities & Other Disasters (Relief)(PDMA) 2,015.19 BC21024 Religious Affairs Department 7.111 BC21025 Food Department 9.448 BC21030 Fisheries Department 124.298 BC21031 Cooperation Department 3.342 BC21036 Mineral Resources (Scientific Department) 139.82 BC21037 Loan & Subsidies Department 3,235.00 BC21044 Legal Services & Law Affairs Department 77.416

SupplementaryBudgetStatement–2019-20CURRENT EXPENDITURE

BC21046 Women Development Department 19.693 BC21050 Information Technology Department 243.686 BC21052 Provincial Ombudsman 26.426 BC21053 Chief Minister Secretariat 405.269 BC21054 Home & Tribal Affairs Department 1,183.86 BC21055 Board of Revenue & Administration 2,516.06 BC21058 Planning and Development Department 869.267 BC21059 Information Department 27.204 BC21061 Chief Minister Inspection Team 129.247 BC21062 Governor Secretariat (Voted) 6.425 BC1300F State Trading (Voted) 800.867

TOTAL CURRENT EXPENDITURE 16,724.38 DEVELOPMENT EXPENDITURE

FUND Sector/Service Function AMOUNT (In millions)

BC12201 General Administration 259.021 BC12213 Communication & Works 972.524 BC12232 Irrigation 324.61 BC12296 Federal Funded Projects 2,226.48

TOTAL DEVELOPMENT EXPENDITURE 3,782.64

FinancialYear NonDevelopment(Supplementary)

Development(Supplementary)

Total

2017-18 19.099 7.224 26.323

2018-19 20.176 38.239 58.415

2019-20 16.590 3.458 20.048

ComparativeofSupplementaryBudgetoflastthreeyears

ü  Despite unforeseen emergency requirements, overall size ofsupplementarybudgethasbeenreduced.

ü  Size of development budget supplementary has been drasticallyreducedinviewofbetterbudgetingandensuringfiscaldiscipline

BUDGET ESTIMATES

FY 2020-21

BudgetEstimatesforFY2020-21Revenues B.E 2019-20 B.E 2020-21

Ø  Total Federal Transfers 319.889 302.95 Ø  Total Provincial Receipts 38.856 49.945 Ø  Total Capital Receipts 13.468 14.698

Total Revenue 372.213 367.548

Cash carryover (FPA+ Federal Funded Projects) - 10.366

Expenditure: 2019-20 2020-21

Ø  Non-development Expenditure 293.580 309.032

Ø  Foreign Funded Projects 7.561 12.201

Ø  Federal Funded Projects 18.210 38.216

Ø  Fiscal Space for PSDP 52.862 18.465

Ø  Provincial PSDP (Local) 100.572 106.079

Total Expenditure 419.923 465.528

Deficit -47.710 -87.614

RevenueSources&Estimates2019-20&2020-21

Source BE 2019-20 BE 2020-21 % growth

Transfers from Federal Government: 319.889 302.904 -9.8% Ø  Divisible Pool 281.230 251.664 Ø  Straight Transfers 13.753 13.390 Ø  Development Grants (Federal) 14.906 27.850 Ø  Non-Development Grants 10.000 10.000

Provincial Revenue Receipts: 38.856 49.946 22.20% Ø  Provincial Tax Revenue 14.757 20.926 Ø  Provincial Non Tax Revenue 6.397 6.482 Ø  Sui Lease Extension Bonus (PPL) 13.031 19.000 Ø  Foreign Projects Assistance (Grants) 4.672 3.538

Provincial Capital Receipts: 13.468 14.698 8.37% Ø  Foreign Projects Assistance (Loans) 3.388 8.663 Ø  State Trading (Sale of Wheat) 2.816 4.650 Ø  Recovery of Loan & Investments (Food+) 0.164 1.385 Ø  Ways & Means (OD Limit with SBP) 7.100 0.000

Total – Receipts 372.213 367.548 -1.25%

Rs. in Billion

EstimatesofNon-DevelopmentBudget

TYPE OF EXPENDITURE B.E 2019-20 B.E 2020-21 PAY AND ALLOWNCES 153.302 168.750 OPERATING EXPENSES 17.463 23.804 PENSION 33.786 38.174 GRANTS & SUBSIDIES 43.283 44.336 SCHOLARSHIPS, CASH AWARDS, HONORARIA 0.850 2.843 INTEREST PAYMENT 3.269 3.330 LOANS AND ADVANCES 0.000 2.000 PURCHASE OF ASSETS 6.761 12.070 PRINCIPAL REPAYMENTS OF LOANS 16.340 7.049 INVESTMENTS (Food Security + Pension) 15.500 3.000 REPAIR AND MAINTENANCE 3.026 3.676 Grand Total 293.580 309.032

Growth Rate (BE to BE) 5.3%

Rs. in Billion

Rs. in Billion

S.No Title of Fund/Investment Capital Investment

Profit Earned during 2019-20

A. Employees related Investments 1 Balochistan Employees Pension Fund 15.000 2.609 2 Balochistan Employees G.I. Fund 0.80 0.179 3 Balochistan Employees G.P. Fund 18.000 4.077 4 Balochistan Employees B.F. Fund 12.000 1.000

B. Other Investments 5 Balochistan Education Endowment Fund 8.000 0.930 6 Balochistan Awwami Endowment Fund 4.000 0.458 7 Balochistan Disaster Management Fund 2.000 0.142 8 Professional Development of Provincial Officers 2.000 0.143 9 Offenders Rehabilitation & Social Integration Fund 0.500 0.018 10 Artists Welfare Fund 0.200 0.026 11 Hawkers Welfare Fund 0.022 0.0015 12 Viability Gap Fund 1.000 0.038 13 Project Development Fund 1.000 0.038

Total (A + B) 64.522 9.655

ExistingFunds/Investments

Investments,MicroFinance&EmergencyGrants

Description of Investments Rs. In Billion

Socio Economic Initiative (Post Covid Relief Program) 3.000 Health Affairs (Covid Response Measures) 1.000 Balochistan Civil Employees Health Insurance Scheme 1.000 CM Micro Finance Interest Free Scheme for Small Businesses 2.000 CM Interest Free Scheme for Low Cost Housing 1.000 Locust Control Program (Agriculture) 0.500 Food Security Revolving Fund 1.000 Pension Investment Fund 2.000

Total 11.500

PRIORITY SECTORS

BUDGET FY 2020-21

PRESENTATION TO PROVINCIAL CABINET ON FY 2020-21

Sector Current Budget

% share in Current Exp

Development Budget

% Share in Dev Exp,

Share in Total

Budget

Education (Secondary & Higher) 63,656.26 20.60% 9,107.45 7.70% 17.03%

Health & Medical Education 37,387.79 12.10% 7,050.05 5.96% 10.40%

Communication & Works 11,397.81 3.69% 27,662.14 23.39% 9.14%

Irrigation 3,723.87 1.21% 15,006.79 12.69% 4.38%

Local Government 12,995.68 4.21% 4,184.27 3.54% 4.02%

Agriculture 11,071.97 3.58% 4,121.36 3.48% 3.56%

Public Health Engineering 4,553.70 1.47% 9,011.17 7.62% 3.17%

Energy 6,851.80 2.22% 2,518.20 2.13% 2.19%

Sports and Youth Affairs 1,041.79 0.34% 5,340.85 4.52% 1.49%

Live Stock 4,592.08 1.49% 949.36 0.80% 1.30%

Mines & Mineral Resources 3,624.07 1.17% 534.50 0.45% 0.97%

Social Welfare 2,268.18 0.73% 1,004.53 0.85% 0.77%

Industries 1,762.66 0.57% 524.38 0.44% 0.54%

Fisheries 1,232.53 0.40% 827.00 0.70% 0.48%

Priority Sectors in Budget 2020-21 Rs.InBillion

SNE (CREATION OF NEW POSTS)

FY 2020-21

PRESENTATION TO PROVINCIAL CABINET ON FY 2020-21

DepartmentwisesummaryofpostsadmittedforFY2020-21

S.No. NAME OF THE DEPARTMENT POSTS ADMITTED 1 General Administration (Voted) 98 2 Provincial Excise 35 3 Administration of Justice (Voted) 64 4 Police 55 5 Levies 388 6 Jails & Detention 19 7 Civil Works 188 8 Public Health Engineering 112 9 Higher Education 425 10 Archeology, Museum and Libraries 69 11 Health 1266 12 Population Welfare 96 13 Manpower & Labour 41 14 Admn: Sports & Recreation 176 15 Social Security & Social Welfare 353 16 Religious Affairs 35 17 Food 8 18 Agriculture 254 19 Animal Husbandry 87 20 Forestry 54 21 Fisheries 119 22 Irrigation 224 23 Rural Development 105

S.No. NAME OF THE DEPARTMENT POSTS ADMITTED 24 Industries 145 25 Mineral Resources 33 26 Prosecution Department 4 27 Transport Department 7 28 Secondary Education 1486 29 Medical Education 468 30 Culture Services 11 32 Legal Services & Law Affairs 10 33 Women Development Department 89 34 Energy Department 14 35 Information Technology Department 1 36 Environment Control 82 37 Provincial Ombudsman 2 38 Board of Revenue 13 39 Administration of Justice (Charged) 6 40 Governor Secretariat 2 41 Chief Minister Secretariat 55 42 Finance Department 10 43 Planning & Development 17 44 Information Department 27 45 Inter Provincial Coordination Department 2 46 Chief Minister’s Inspection Team 6 47 Minorities Affairs 67

Grand Total…. 6,840

DepartmentwisesummaryofpostsadmittedforFY2020-21

FINANCE BILL

2020

PRESENTATION TO PROVINCIAL CABINET ON FY 2020-21

Constitutionalrequirement… 1. Article 115 states the following contents of Finance Bill / Money Bill:

• Imposition of any tax; • Abolition of any tax; • Remission of any tax; • Alteration of any tax; • Regulation of any tax; • Borrowing of money OR Government while giving guarantee OR amending law relating financial obligations of the Government;

• Cash inflow and outflow from Provincial Consolidated Fund Account;

• Imposition of charge (collateral) , its abolition or alteration upon the Provincial Consolidated Fund etc.

2. Further Article 77 requires that any tax to be levied by law only.

S.No Statute/Enactment PurposeofStatute/Enactment

Jus5fica5on

1 Enac'ng-BalochistanPublicFinanceManagementAct,2020.(FinanceDepartment)

ToManagePublicFinances in theProvince.

•  FirstPFMActatProvinciallevel•  Toregulatepublicfinances;•  Tointroducefiscaldiscipline;

2 Amending-BalochistanFinanceAct,1964.(Excise&Taxa5onDepartment)

TolevyannualProfessionalTaxondifferent professions and tradesetc.

•  Toincreasetaxbase;•  Enhanced revenues by Rs. 0.20

Billionp.a(app);3 Amending-BalochistanFinance

Act,1965.(Excise&Taxa5onDepartment)

To levy tax onHotels carrying ontheir hotelmanagement businessinBalochistan.

•  Toincreasetaxbase;•  EnhancedrevenuesbyRs.50.00

Millionp.a(app);4 Amending- BalochistanSalesTax

onServicesAct,2015.(FinanceDepartment)

SalesTaxonServices •  Tostreamlinetaxstatute;•  Enhanced revenues by Rs. 2.00

Billionp.a(app);5 Amending - Balochistan Revenue

AuthorityAct,2015.(FinanceDepartment)

Administra'onofBRA •  To bring BRA at par with sisterauthori'es;

•  Indirect impact on enhancingrevenues;

6 Amending-ExciseDutyonMines&Minerals(LaborWelfare)Act,1967.(Mines&MineralsDepartment)

To levy excise duty on all minesandminerals.

•  Enhanced revenues by Rs.0.50Billionp.a(app);

7 AmendmentsinMinesAct,1923.(Mines&MineralsDepartment)

Tochargegovernmentmandatoryfee on persons engaged inminesand minerals related businessesforcertainopera'ons.

•  Enhanced revenues by Rs. 0.50Billionp.a(app);

ContentsFinanceBill,2020

BALOCHISTAN TAX REVENUE MOBILIZATION STRATEGY

2020

PRESENTATION TO PROVINCIAL CABINET ON FY 2020-21

BalochistanTaxMobilizationStrategyPurposeofstrategy:

To reduce dependence on federal receipts, fiscal deficit and re-engineeringprovincialtaxationframework.

Contentsofstrategy:

•  Assessmentofexistingtaxationframeworkincludinggapanalysis;

•  Designing Reform Action Plan to overcome the weaknesses in taxationframework;

•  Recommendationsforreformsinrelevantlegalframework;

•  Identifyingnewsourcesofrevenues.

ExecutionofStrategy:

FinanceDepartmenthasestablishedProvincialRevenueManagement(PRM)Unit,which will execute the strategy. Further, such unit is mandated to reducedependenceonfederalreceipts,fiscaldeficitandre-engineeringprovincialtaxationframework.

TAX RELIEF MEASURES FY 2020-21

PRESENTATION TO PROVINCIAL CABINET ON FY 2020-21

AnticipatedImpactofTaxReliefMeasures

S.N0 TitleofTaxInstrument(TobeexemptedtillJune2021)

FinancialImpact(Rs.inMillion)

1 Exemption of Balochistan Sales Tax on Services (BSTS) on Health related Services

100.000

2 Exemption of Balochistan Infrastructure Development Cess (BIDC) on Medical Equipment as per WHO list

160.000

3 Exemption of Electricity Duty on Domestic Consumers up to 100 units

100.00

Total…. 360.000

APPROVAL OF PROVINCIAL

CABINET

ApprovaloftheProvincialCabinetissolicitedtothefollowing:

1. Revised Budget Estimates for FY 2019-20

2. Supplementary Budget for FY 2019-20

3. Budget Estimates for FY 2020-21

4. Schedule of New Expenditure (SNE) FY 2020-21

5. Finance Bill 2020

5. Balochistan Tax Revenue Mobilization Strategy 2020

6. Tax Relief Measures

THANK YOU