WHITE PAPER FOREWORD

Transcription

1 1 FOREWORD White Paper is a title derived from the parliamentary traditions of established democracies where the term is used for explaining the government s intentions or a policy on a subject. However, in our context, white paper on the budget is an on technical description of the salient features of budget. It is an endeavor to give meanings and substance to the figures in the budget. It attempts to summarize and unfold the mysteries hidden under budgetary classifications besides explaining the rationale for various provisions in the budget estimates. It is hoped that the insight provided by this document will enable the reader to formulate an informed and independent opinion about the intent, benefits and accuracy of various projections in the budget estimates. The Government budgeting is based on the principle of equitable distribution of resources among its citizens through the tools of various fiscal measures. Government first outlines its expenditure programmes and then follows planning for revenue generation. It is a well set rule in Public Finance that an increase in expenditure at a constant tax rate or a decrease in the tax rate at no change in expenditures will always lead to budget deficits. In case of a reverse scenario, a surplus budget will appear, while, balance budget is an equilibrium between receipts and expenditures. The need for any one of these three options depends upon the overall economy of the country or on the will of the government. A benevolent government always chooses the option which maximizes the welfare of the common man. Thus, it raises the issue of government intervention through reallocation of resources that generally intends to focus on equitable distribution of the available resource. The White Paper for portrays a comprehensive picture of the Balochistan Government s finances. Almost, all major areas have been covered. However, special attention has been given to current revenue receipts and expenditures, capital receipts and expenditures, development budget, public accounts, local government finances and debt management. This document provides an insight on various financial issues of the Balochistan Government for policy makers, researchers, economists and others. In the preparation of this document the valuable assistance of officers and officials of the Finance Department cannot be ignored. Specially, the services of Mr. Noor Ul Haq Baloch who is the main author and compiler of this document are acknowledged. Their concerted efforts and commitment of all enabled us to publish this document. DOSTAIN KHAN JAMALDINI Secretary Finance Government of Balochistan

2 2 TABLE OF CONTENTS EXECUTIVE SUMMARY... 3 CHAPTER 1: ESTIMATES OF RECEIPTS... 6 CHAPTER 2: ESTIMATES OF EXPENDITURE...28 CHAPTER 3: PUBLIC ACCOUNT...46 CHAPTER 4: OVERVIEW OF THE PSDP CHAPTER 5: OVERVIEW OF FISCAL MANAGEMENT REFORMS...72 CHAPTER 6: PENSION AND GENERAL PROVIDENT FUND LIABILITIES...83 GLOSSARY...86

3 3 EXECUTIVE SUMMARY In the last few years, Pakistan s economy has been treading on a path of high inflation and low growth. Economic problems of the country have further been compounded by low tax to GDP ratio, higher fiscal deficit, depreciating exchange rate, precarious law and order situation, severe energy shortages and widespread natural disasters including floods and heavy rains. Continuous period of low growth has constrained the fiscal position of both federal and provincial governments thereby compromising their ability to make adequate investments in improving and expanding the physical infrastructure and harnessing true potential of their productive work force which is critically important for economic progress and growth. The fiscal year started with continuous problems of power and gas shortages along with other internal and external challenges. The energy crisis deepened presenting paradoxical situation. The economy on average grew since at 2.94%. During FY12 and FY13 the power shortage became so severe that it wiped out 2% from our GDP. In the context of fiscal federalism, provincial budget is largely a function of Federal Divisible Pool receipts. In this arrangement, all major and robust taxes are classified under Federal Divisible Pool taxes since provinces are largely dependent on Federal Divisible Pool receipts. In the current climate of fiscal restraint and limited resource availability, it would be our endeavor in financial year to manage the available resources in an effective, economical and efficient manner. On expenditure side, besides focusing on allocative efficiency, aim would be to encourage targeted reduction in the current expenditure without compromising the capacity and ability of the government to provide basic amenities and services to general public at an affordable cost., Through implementation of austerity measures, the government intends to increase its social sector and pro-poor budgetary outlays in the medium term which are essential for growth and socioeconomic development of the province.

4 4 In this less positive economic milieu, constraints of increases in salary, rising O&M costs and surge in POL and utility prices due to rampant inflation, budget for the financial year has been prepared in a manner which besides ensuring macroeconomic stability will spur growth, generate employment especially for youth and bring improvements in quality of lives for common citizens. Specifically, emphasis in the development spending would be to: Promote balanced and inclusive growth for equitable development of the province; Ensure adequate investments in public infrastructure to address the existing infrastructure gaps; Develop the social sectors with special focus to health and education sectors. Improve service delivery through better governance, monitoring and oversight;

5 5 BUDGET AT A GLANCE

6 6 CHAPTER 1: ESTIMATES OF RECEIPTS Annual Budget Statement (ABS) divides Government receipts into the following categories: I. General Revenue Receipts II. III. IV. Development Revenue Receipts Capital Receipts Development Capital Receipts The following flow diagram provides different sub-categories of the receipts under the four main categories mentioned above:

7 7 For the purpose of this chapter and the budget, Development Revenue Receipts have been included as a part of Non-Tax Receipts. In FY , total receipts were estimated as. 179, Million. For FY , total receipts have been estimated to the tune of Rs.190, Million against the Revised Estimate of Rs. 187, Million. In this way, Budget Estimate of total receipts reflect a growth of 1.68% over Revised Estimates of FY BE of Provincial Tax Receipts have been fixed at Rs Million in comparison with revised estimates of Rs Million for FY showing a growth of %. For Non-tax receipts, an estimate of Rs Million has been fixed in FY against revised estimates of Rs Million in FY Table below summaries the estimates of total provincial receipts of the government RECEIPTS Table1.1 - Total Provincial Receipts Budget Estimate Revised Estimate (Rs. In Million) Budget Estimate General Revenue Receipts 149, , , Federal Receipt 143, , , Divisible Pool 114, , , GST on Services 4, , Straight Transfers 12, , , Other Grants from Federal Govt. 12, , , Provincial Own Receipt 5, , , Provincial Tax Revenue 1, , , Provincial Non-Tax Revenue 3, , , Current Capital Receipts 29, , , Recoveries of Loans and Advances 6, Debt 1, , , State Trading - (A/c. No.II) 7, , , Ways & Means Advance 10, , , Cash Credit Accommodation- (A/c. No.II) 3, , , Development Capital Receipts , , Total Provincial Receipts 179, , ,

8 8 The definitions, composition and analysis of different types of receipts are given below:- 1.1 GENERALREVENUERECEIPTS Main elements of General Revenue Receipts are as follows: I) Federal Transfers: II) Share of Federal Divisible Pool of Taxes under the 7 th NFC Award. Straight Transfers on account of constitutional provisions: royalties on oil and gas Federal Grants Provincial Own Revenue: Provincial Tax Revenue including Sales Tax on Services Provincial Non-Tax Revenue Extraordinary Receipts Table 1.2 shows the estimates for General Revenue Receipts for FY in comparison with RE and BE For the purpose of clarity, Federal Grants and Straight Transfers, which are part of the provincial non-tax receipts in the Annual Budget Statement, have been shown separately to give a clear picture of the provincial non-tax revenues under the control of the Provincial Government. As depicted intable1.2 below, General Revenue Receipts were estimated at Rs.179, million. In FY , budget estimate of General Revenue Receipts has been pitchedatrs.190, million against revised estimate of Rs. 187, millions how in an increase of approximately % over revised estimates of these receipts in FY This increase is attributable predominantly to increase in Divisible Pool Transfers under 7 th National Finance Commission (NFC) Award to the Provincial Government. Moreover, substantial increase of has been budgeted in the estimates of Provincial Tax Revenue in FY against the revised estimates of these receipts for FY

9 9 GENERAL REVENUE RECEIPTS Table 1.2- General Revenue Receipts Budget Estimate Revised Estimate (Rs. In Million) Budget Estimate a Federal Divisible Pool Taxes Taxes on Income 45, , , Custom Duty 12, , , Tax on Sales 50, , , Federal Excise 5, , , b Provincial Tax Revenue Board of Revenue Excise & Tax; Transport 1, , , Energy c Total Non-Tax Revenue (Excluding Straight Transfer & Grants) Income from Property and Enterprise 7, , , Capital Receipt 15, , , Receipts from Civil Administration and Other Functions 3, , , Capital Own Provincial Receipt 6, Miscellaneous Receipts d Straight Transfers Net Proceeds of Royalty on Crude Oil assigned to Provinces Net Proceeds of Excise Duty on Natural Gas assigned to Provinces 1, , , Net Proceeds of Royalty on Natural Gas assigned to Provinces 4, , , Surcharge on Natural Gas-share of net proceeds assigned to provinces 6, , , Arrears - 3, e GST on Services G.S.T. on Services (Provincial) 1, , , Federal Excise (VAT) 2, Arrears - ( ) - f Federal Grants Development Grants from the Federal Govt. - 10, Foreign Grants - Dev. Grants from Foreign Govts , , Non-Dev. Grants from the Federal Govt. 12, , , Total Non-Tax 178, , , Total General Revenue Receipts (A+B) 179, , ,

10 10 Figure 1.1 below shows the comparison of Budget Estimates & BE of different components of General Revenue Receipts. It shows that substantial growth is expected in Federal Divisible Pool Transfers. Figure 1.2 shows the share of different components of General Revenue Receipts

11 11 The above pie chart depicts the dependence of Provincial Government on Federal Transfers. The combined share of Federal Divisible Pool Taxes is more than 60%. Therefore, even a small percentage variation in Federal Transfer warrants a major adjustment in provincial expenditure. Following is the analysis of major components of General Revenue Receipts Federal Transfers a) Federal Divisible Pool Taxes The tax revenue collected by the Federal Government is distributed between the Federation and the Provinces and amongst the Provinces on the basis of NFC Award. This share of the province under the NFC Award is known as Federal Divisible Pool Transfer. Table 1.4 below reflects the BE, revised estimate of FY along with estimated FBR receipts for FY I. Direct Taxes Income Tax PARTICULARS II. Indirect Taxes Federal Excise Custom Duty Sales Tax Table Federal Divisible Pool Taxes Budget Estimate Revised Estimate (Rs. In Million) Budget Estimate / Under the 7 th National Finance Commission Award, the percentage share of the provinces in the Divisible Pool is 57.5% w.e.f. FY Due to increase in the nominal size of the Federal Divisible Pool, transfers to Balochistan are expected to increase to Rs million during FY compare to BE for FY This would actually mean that the BE is pitched to be 8.00% higher than RE Under the 7 th NFC Award, the Divisible Pool now comprises Taxes on Income, Customs Duties, Sales Tax, Federal Excise excluding Excise Duty on Gas charged at well head, and any other tax levied by the Federal Government. With the exception of Federal Excise Duty on gas, the taxes listed above are distributed between the provinces and the Federal Government in the ratios given below:

12 12 Table Vertical Distribution of Resources Provincial share Federal share 57.50% 42.50% The provincial share is divided amongst the provinces in the ratios given below. This share was decided on the basis of a multiple criteria based on population, inverse population density, revenue and poverty. Table Horizontal Distribution of Resources Punjab Sindh Khyber Pakhtunkhwa Balochistan 51.74% 24.55% 14.62% 9.09% The major increase in the Divisible Pool Taxes is expected from the Income Tax and Sales Tax. These two taxes collectively contribute to 67 % of Balochistan s share from the Federal Divisible Pool. b) Straight Transfers Under Article 161 of the Constitution and the NFC Award, Straight Transfers to the provinces include: i) The net proceeds of the Federal excise duty on natural gas ii) Net proceeds of royalty on crude oil and natural gas assigned to the provinces under the Constitution. Royalty on Gas: Sui gas field has sustained the energy economy of Pakistan for about 50 years. The field is now fast depleting and its production has declined form 80 to approximately 20%. Earliest the well-head price of the gas was amongst the lowest in the country. With the efforts of the government, however, the well head price of the gas had been enhanced to Rs MMBTU during year This helped to raise the non-tax receipts in the relevant head from Rs 3, ( ) to Rs. 4, million ( ).

13 13 Gas development surcharge (GDS) GDS is the difference between consumer price and prescribed price. While consumer price is paid by the end-user, prescribed price is comprised of the elements including cost of gas, Excise Duty of Rs per MMBTU, transmission and distribution expenditure, depreciation on fixed assets, minimum return to gas companies etc. GDS has been collected by gas companies under Natural Gas (Development Surcharge) Rules, 1967 famed under recommendation of the NFC, net proceeds of GDS are being distributed to the provinces from 1990, the net proceeds of GDS (after 2% collection charges) have been distributed to the provinces in accordance with their percentage share in total production of gas. Prior the announcement of NFC Award in 1991, the GDS was generated only from gas resources emanating from Balochistan. The surcharge was, however not paid to the Provincial Government but utilized form development of other Gas Fields in the country. The act deprived the province of Rs 29,000 million. Subsequently, the GDS was announced as it saved the interests of the new gas fields because of their larger share in production. Government of Balochistan always pleaded that the province should be compensated for its depleted resources and the amount utilized for exploration of new gas fields be paid with interest which by June came to Rs. 178, million. The revised Estimates of GDS production from all systems in was Rs. 16,471.85million. of which the SNGPL and SSGCL, main resources from Balochistan (sharing approximately 20% of the gas injecting in national energy outlay) are produced a GDS of only Rs 2,006.3million.Due to the mechanism of mixing Balochistan gas (having low well-head price) in the past with high price gas of Punjab and Sindh and taking the weighted average cost of gas as input cost of gas for determining the prescribed price, balochistan has been providing a subsidy of approximately Rs billion per annum to the consumers of the other three provinces, the province should be

14 14 compensated for the subsidy paid and amount may be provided by Federal Government/ companies I the form of arrears. The Straight Transfers less Excise duty on Natural Gas are being paid on the close of each Financial Year. The delayed payments often result onto accumulation of overdraft the SBP. More fiscal space can be acquired for the province if these dues are paid on accrual or monthly basis directly into Province s account by the Gas Campaign making it timelier and saving nearly 2% collection charges paid by Balochistan. Under straight transfers, the provinces are entitled to receive net proceeds on Federal Excise Duty on natural gas, power, Royalty on crude oil and Surcharge on natural gas. Straight Transfers to Balochistan during has been pitched at Rs 16, million. The Financial Year , besides considerable increase in the Divisible Pool Taxes, also has positive interventions with regard to receipts in the shape of Straight Transfers, the estimates of transfer form Royalty on Natural Gas and Gas Development Surcharge for the Current Financial Year reflect the same trend but the volume of Straight Transfer due to an enormous increase in the estimates of GST on Services from Rs million to Rs. 4, million. Excise duty on gas Royalty on gas and Surcharge on gas are of the most important revenues included in Straight Transfers. The revenues somehow were on a decline till , which started taking an upward trend mainly due to increasing well-head price and payment of arrears. The straight transfers to the Provincial Government are reflected below in figure.

15 15 Table Straight Transfers for FY & FY (Rs. In Million) Straight Transfers Budget Estimates Revised Estimates Budget Estimates Net Proceeds of Royalty on Crude Oil assigned to Provinces Net Proceeds of Excise Duty on Natural Gas assigned to Provinces 1, , , Net Proceeds of Royalty on Natural Gas assigned to Provinces 4, , , Surcharge on Natural Gas-share of net proceeds assigned to provinces 6, , , Total 12, , , Figure 1.3: Straight Transfers for FY & FY

16 16 Figure 1.4: The budget estimates of Straight Transfers has been pitched at Rs million compared to budget estimate of Rs million. Provincial Own Receipts The Provincial Own Receipts consist of the following: a. Tax Receipts i. Receipts from Direct Taxes (Agricultural Income Tax, Property Tax, Land ii. Revenue, Professional Tax, Capital Value Tax etc.) iii. Receipts from Indirect Taxes (Sales Tax on Services, Provincial Excise, Stamp Duties, Motor Vehicle Taxes, Electricity Duty etc.) b. Non-Tax Receipts i.. Income from property and enterprises ii. Receipts from civil administration and other functions iii. Miscellaneous Receipts (other receipts excluding Federal Grants and Development Surcharges and Royalties iv. Extraordinary Receipts

17 17 The estimates of Provincial Own Receipts are provided in Table 1.7 below. The table shows that during FY , the actual collection of Provincial Own Receipts. The estimates of Provincial Own Receipts are provided in Table 1.7. Table Provincial Own Receipts (Rs. in million) Budget Revised Budget RECEIPTS Estimate Estimate Estimate a) Tax Receipts i. Direct Taxes 1, , , ii. Indirect Taxes b) Non-Tax Receipts i. Income from Property and Enterprises 1, ii. Receipts from Civil Administration and other Functions iii. Miscellaneous Receipts 2, , , Total Provincial Own Receipts 5, , , Table 1.8 shows department wise collection of provincial Tax receipts TAX RECEIPTS Table Provincial Tax Receipts Budget Estimate Revised Estimate (Rs. in million) Budget Estimate Board of Revenue Agricultural Income Tax Registration Land Revenue Stamps Excise & Taxation Urban Immovable Property Tax Tax on Professions, Trades and Callings Receipts under Motor Vehicle Acts Capital Gains Tax Provincial Excise Other Indirect Taxes Transport Motor Vehicles fitness certificate and permit fee Energy Electricity Duty Total Provincial Tax Revenue 1, , ,

18 18 BOARD OF REVENUE Figure 1.5: The following bar charts shows that Board of Revenue failed to achieve the targets in The BE except for the Stamps. Especially the performance with regard to Land revenue and Registration is highly questionable. Figure 1.6: Following pie-chart shows the composition of taxes collected by Board of Revenue as estimated for FY Land Revenue Land Revenue is a broad category which includes a number of receipts related to Land Revenue functions. Mutation Fee is the major component of the Land Revenue receipts. Land Revenue is expected to contribute Rs million

19 19 to the provincial exchequer during FY The` collection from Land Revenue during financial year has shown considerable buoyancy. The RE of Land Revenue is million compared to target of Rs million during FY It is need of the hour that the Government has to implement a major reform initiative i.e. imposition of valuation tables for determination of Mutation. Similar major reform measure will contribute positively to the growth in revenue from Land Revenue and other sources of revenue collection. Registration Registration fee is collected at the time of registration of a sale deed of property. BE of Registration has been set at Rs million compared to RE of Rs million meaning that a sharp decline of over RE Agricultural Income Tax Agricultural Income Tax (AIT) is being envisaged as a tax on income from agricultural activities. In Sister Province of Punjab AIT is being levied in two modes; one is the Land Tax levied on land holdings at fixed rates per acre (separately for irrigated and non-irrigated cultivated lands); and the other, introduced as income based tax. All income from agriculture above Rs.80,000 per year is subject to tax. AIT is levied on land holdings of above 12½ or 25 acres, respectively for irrigated and non-irrigated cultivated land. The target for the next financial year for AIT has been set at Rs.2.00 million. The issue of taxing agriculture appropriately has been a subject of great debate in the recent times. In this regard, the contrast between the contribution of agriculture sector in national GDP and share contributed by this sector in national revenue collection has been cited as a justification to more effectively tax agriculture income. In this context, the present Government has decided to bring some changes in the current laws/regulations. GST on Services The Government levied GST on services on following services w.e.f as the right of provinces to collect GST on Services was recognized by the Federal Government during deliberations on 7 th NFC Award:-

20 20 Telecommunication Banking Shipping Agents Insurance and other financial services Stock Brokers Advertisements on Cable TV and similar services Collection of General Sales Tax on Services in FY was assigned to Federal Board of Revenue in conformity with Record Note signed between Federal Government and Provincial Governments. Presently the Federal Government is collecting the GST on behalf of provincial Government, but the present provincial Government has decided to establish it own Balochistan Revenue Authority to collect the tax in the near future. The Government of Balochistan has decided to go for legislation in this regard in the FY Excise & Taxation Department The following bar chart shows the a comparison of budgeted and collected taxes by Excise and Taxation Department. The shows the Department achieved its targets in the FY Figure1.7:

21 21 Figure 1.8: The following pie-chart shows the composition of taxes collected by Excise & Taxation as estimated for FY

22 22 Table 1.9 shows a comparison of the Provincial Non-Tax receipts between FY and FY Table Provincial Non Tax Revenue (Excluding Federal Grants and Development Surcharges and Royalties) (Rs. in million) NON TAX REVENUE Budget Estimate Revised Estimate Budget Estimate Income from Property and Enterprises Interest on Loans to Financial Institutions Interest on Loans to Non-Financial Institutions Dividends Civil Administration and other Functions General Administration Law and Order Justice Police Department Jails Community Services Communications & Works Urban Planning & Development Public Health Social Services Education Health Miscellaneous Labour Mines Social Welfare Miscellaneous Receipts Food Agriculture Fisheries Animal Husbandry Forest Irrigation Industries Mines and Mineral 1, , , Board of Revenue Misc TOTAL NON-TAX RECEIPTS 3, , ,

23 23 Figure 1.9: Figure 1.10: shows the share of Income from Property and Enterprises, Receipts of Civil Administration and other functions and Miscellaneous Receipts as estimated for FY : Provincial Non-Tax Receipt BE

24 24 Figure 1.11: Figure 1.12:

25 DEVELOPMENT REVENUE RECEIPTS Development Revenue Receipts are primarily grants from foreign multilaterals for specific development projects. The RE of Development Revenue Receipt was Rs. 12, million compared to BE of Rs million. The BE has been pitched at only Rs Million. Sr. No. Table Development Revenue Receipt Particulars Budget Estimate (Rs. In Million) Revised Budget Estimate Estimate Foreign Grants from Federal Govt: , , Other Development Grant - 10, Total Development Grants , , CURRENT CAPITAL RECEIPTS Current Capital Receipts mainly accrue from new loans borrowed or raised by the Provincial Government and recoveries of loans granted to provincial establishments or their employees. Current Capital Receipts may be credited either to the Provincial Government s Account No. I (Non-Food Account) or Account No. II (Food Account), depending on the nature of the receipt. Money raised through loans, budgetary support programme of multilaterals, recoveries of principal amount of loans advanced by the Government to its employees and autonomous bodies are credited to Current Capital Receipts (Account No.I). On the other hand, receipts from sale of wheat and financing for procurement of wheat accrue to Account No. II.

26 26 RECEIPTS Table Current Capital Receipts Budget Estimate a) Loans & Advances/Recoveries of Loans and Advances Revised Estimate (Rs. in million) Budget Estimate From Financial Institutions 5, From Non-Financial Institutions From Government Servants b) Debt Permanent Debt-Domestic Permanent Debt-Direct (Access to Justice Programme) Recovery of Investment Permanent Debt-Foreign 1, , , Account No. I (a) + (b) State Trading Schemes 7, , , Cash Credit Accomd; Account No.I 10, , , Cash Credit Accomd; Account No.II 3, , , Total Current Capital Receipts (I & II) 29, , , Permanent Debt - Account No. I Direct debt and loans borrowed from or through the Federal Government i.e. domestic and foreign loans comprise the permanent debt of the provincial government. Government of Balochistan has not been borrowing from any domestic source. Public Debt Account No. II (Food Account) Account No.II, like Account No.I, is also maintained with the State Bank of Pakistan. The distinction, however, is that this account is meant exclusively for transactions relating to state trading in food commodities by the Food Department. Finances for food commodity purchases are raised through what is known as Cash Credit Accommodation.

27 DEVELOPMENT CAPITAL RECEIPTS Development Capital Receipts comprise loans borrowed from multilateral donor agencies through the Federal Government for specific foreign-assisted development projects. Combined with the Development Revenue Receipts and surpluses from the General Revenue Account and Capital Account, Development Capital Receipts finance the Annual Development Programme of the province. The Budget Estimates for Development Capital Receipts is Rs million compared to Budget Estimates of Rs million and RE of Rs million. Development Capital Table Current Capital Receipts Budget Estimate Revised Estimate (Rs. in Million) Budget Estimate Domestic Debt Foreign Debt Total

28 28 CHAPTER 2: ESTIMATES OF EXPENDITURE Framework Before dilating upon the functional classification of the expenditures, it is appropriate that the framework in which the budget estimates are being formulated is also presented. Budgetary framework shown below reflects the components and context in which the receipts and expenditure are derived while preparing the budget estimates. Figure 2.1: Budgetary Framework

29 29 General Public Service Overall expenditures of the government are classified under Provincial Consolidated Fund and Public Account of the province under Article 118 of the Constitution. Components and streams of financing items of Provincial Consolidated Fund and Public Account are represented in the Figure 2.2. Figure 2.2: Expenditure Classification

30 30 Transactions on receipt and expenditure side which are not part of the Provincial Consolidated Fund are explained separately in the Chapter of the White Paper on Public Account. As regards the expenditures from the Provincial Consolidated Fund, the same are classified into following categories: a) Current I. Current Revenue Expenditure II. Current Capital Expenditure b) Development I. Revenue Expenditure II. Capital Expen. I. Current Revenue Expenditure Current Revenue Expenditure includes the expenditures on the regulatory functions of the government and provision of social and economic services. According to the Chart of Accounts under the New Accounting Model adopted through PIFRA, World Bank s funded project, computerized disbursement budgetary mechanism which has become functional almost in all districts in Balochistan, following are the main functional heads of expenditure in Current Revenue Expenditure: Public Order and Safety Affairs Economic Affairs Environment Protection Housing and Community Amenities Health Affairs & Services Recreational, Culture and Religion Education Affairs and Services Social Protection II. Current Capital Expenditure Current Capital Expenditure like current capital receipt figures both in the Account No. I and Account No. II of the Provincial Government maintained with the State Bank of Pakistan. Expenditure items under Current Capital

31 31 Expenditure in Account No. I include the following: (i) Principal Repayment of Domestic and Foreign and Market Debt. Expenditure on repayment on account of Ways and Means Advances availed by the Government of the Balochistan from the State Bank of Pakistan is also included in this category; (ii) Loans and advances to corporate bodies of the Government of Balochistan or associated with the Government of Balochistan. Expenditure in Account No. II are mainly incurred on state trading operations of the government in food grains especially procurement of wheat and repayment of loans taken from banks for trading operations of Food Department. III. Development Revenue Expenditure The expenditure under this grant pertains to most of the expenses other than the brick and mortar expense. Employees related expense, purchase of transport, machinery and equipment, operating expenses, research and development, training etc. provided under the projects during the execution of the projects are all part of the development revenue expenditures. IV. Development Capital Expenditure Development capital expenditure is the capital investment under the development programs for roads, buildings, irrigation sectors etc. 2.1 OVERVIEW OF EXPENDITURE In Financial Year , total financial outlay of the government has been estimated at Rs.198, million. In FY , size of the Provincial Development Budget has been pitched at Rs.43, million INCLUDING Provincial PSDP Rs.39, million and Foreign Project Assistance Loan of Rs.3, million indicating an increase of Rs.8, million over Development Budget Estimates-2012/13. An allocation of Rs.117, million has been proposed for current expenditure in FY , against revised budget estimates-2012/13 of Rs.104, million representing an increase of approximately %. Despite persistent inflationary trends,

32 32 increase in salaries, allowances and pensions of employees of the government, allocations of development expenditure have been protected by adopting a considerable increase in development budget in comparison with the Development Budget for FY-2012/13. This is in conformity with the development vision of the incumbent government where allocations of development budget are protected through austerity measures, curbing wasteful expenditure, improving budgetary efficiency, monitoring outcomes against budgetary allocations and bringing efficiency, effectiveness and economy in government operation Table 2.1 reflects the allocations for Current Revenue Expenditure and Development Expenditure of Balochistan Govt; for the year & A. Current B. Development Table:2.1 Current & Development Expenditure (Rs. in million) Classification Budget Estimates Revised Estimates Budget Estimates General Administration 21, , , Law & Order 13, , , Community Services 8, , , Social Services 37, , , Economic Services 22, , , Debt Servicing 3, , , PSDP 33, , Outside PSDP (Federal) , Foreign Project Assistance Loans Cash Assistance (Japanese Grant) 2, , , Total Expenditures A + B 178, , , In the last few years, allocations for development budget have increased significantly which augurs well for socio-economic development of the province mainly after the NFC Award. Table 2.2 shows the outlay of development budget of Balochistan Government including assistance loans and grant etc. for last five years and allocation for FY

33 33 Fiscal Year Table:2.2 Development Budget Budget Estimates Revised Estimates (Rs. in Million) , , , , , , , , , , , % Figure 2.1: Comparison of Development Budgets In this regard, it would be pertinent to add that in last three years despite substantial increase in salary and allowances of government employees, allocations for development program of the province has registered a significant increase mainly for improving various sectors in the province. 2.2 CURRENT REVENUE EXPENDITURE Table 2.3 summarizes the Budget Estimates and Revised Estimates of Current Revenue Expenditure for FY along with Budget Estimates for FY

34 34 Table:2.3 Current Revenue Expenditure (Rs. in Million) CLASSIFICATION BE RE BE A. Current 103, , , General Administration 21, , , Law & Order 13, , , Community Services 8, , , Social Services 37, , , Economic Services 22, , , B.DEVELOPMENT ADP including operational shortfall 220, , , , , , TOTAL EXPENDITURE (A+B) 654, , , Salient Features of the Allocations for different Departments / Functions for FY Outlay of current expenditure for FY 2013/14 is estimated at Rs.117, million against Revised Budget Estimates of Rs.107, million for FY which shows an increase of approximately 8.6 %. Broadly, allocations in the current budget for FY: have been made on the following principles / parameters of incremental formula under contingent expenditures of permanent budget in view of inflation rate and requirements of the departments. 10% increase in pay and pension for civil employees of Government of Balochistan. Creation of 4,493 new posts in different cadres in various departments Recurring cost of transfer of development programs to nondevelopment budget after the completion of schemes. Owing to persistent inflationary trends, prices of POL and Utilities like electricity have been revised upwards frequently in last two years. To absorb this increase, allocations in FY have been made

35 35 commensurate with this increase Huge Allocation for provision of free medicines in public sector hospitals Inclusion of new Initiatives programs in Education and Health sectors Huge allocations for distribution of free books Public Order and Safety Affairs Expenditures on administration of justice, police, levies, Balochistan constabulary, prisons, prosecution and civil defense are included under this head. Allocation for Police has been increased from Rs.5, million of Budget Estimates-2012/13 and Revised Estimates-2012/13 of Rs. 7, million to Rs.7, million in 2013/14. In this way, an additional allocation of Rs.1, million has been provided to Police which represents an increase of 16.8% over Budget Estimates despite revival of B area in the province. Government of Balochistan provides budget to police and Balochistan constabulary in same pace with incremental increase each year despite restoration of Levies Force in Balochistan. Again, the less increase for Levies Force, centuries old traditional Force laving conformity with social set up of Balochistan, is due to the fact that it s economical force in spite of controlling peace and orders in 95% areas of the province. It is essential to point out here that General Pervaz Musharraf, oblivious to the social and tribal system of Balochistan, initiated Conversion of B into A (CBA) Project in 2003 converting Balochistan into police controlled area phasewise by Traditional Levies Force was merged in police. The former government restored B area and revived Levies Force on consistent demand of the people in the province. Separation of Levies from police rose a great challenge for Finance Department on issue of missing posts due to repatriation of Levies Force officials / personal who got one step promotion in police. Now, newly elected government has won the credit restoring 1,233 missing posts of Levies Force with financial implication of over Rs million per annum. This decision will not only strengthen the force, but also resolve salaries problems of the force. Table 2.4 below gives the breakup of this allocations for different departments classified under public order and safety affairs

36 36 Table:2.4 Public Order & Safety Affairs Public Order & Safety Affairs Budget Estimates (Rs. in million) Revised Budget Estimates Estimates Administration of Justice (Charged) Administration of Justice (Voted) , Prosecution Police 5, , , Balochistan Constabulary 1, , , Levies 3, , , Jails & Detention Civil Defense Total:- 13, , , Figure 2.2: Public Order and Safety Affairs BE Economic Affairs Expenditures on sectors / departments contributing in economic development of the province viz. Food, Agriculture, Land Revenue, Animal Husbandry, Forestry, Fisheries, Cooperative, Irrigation, Rural Development, Industries, Printing, Mineral Resources, Transport, Energy, Information Technology and Environment etc. are included under this classification. Current Revenue Expenditure in these sectors also includes allocations for research, extension and field services to farmers, maintenance and repair of the

37 37 agriculture and irrigation networks. All major economic infrastructure departments and departments involved primarily in activities relating to economic affairs are included under this functional classification. Table 2.5 shows the break-up of this expenditure across major departments. Table: 2.5 Economic Affairs (Rs. in Million) Economic Services Budget Estimates Revised Estimates Budget Estimates Food Agriculture 5, , , Land Revenue Animal Husbandry 1, , , Forestry Fisheries Cooperation Irrigation , , Rural Development 6, , , Industries Stationery & Printing Mineral resources (Scientific Deptt:) Transport Department Women Development Department Energy Department 4, , , Information Technology Department Environment Control Department Total:- 22, , ,

38 38 Figure 2.3: Economic Affairs Expenditure, BE Housing and Community Amenities In this classification, Civil works, PHE and WASA fall. Details of expenditure on Housing and Community Amenities are provided in Table below: Community Services Civil Works including Establishment Charges Table:2.6 Community Services Budget Estimates Revised Estimates (Rs. in Million) Budget Estimates , , Public Health Engineering , , Works Urban B-WASA Total 8, , ,

39 39 Figure 2.4: Housing and Community Amenities BE Recreational, Culture, Religion & Other Social Services Table 2.9 shows the breakup of different services under this functional classification and their allocations-2012/13 along with Budget Estimates and Revised Estimates-2012/13. However, Education Service has also been discussed separately. Social Services Table:2.9 Social Services Budget Estimates Revised Estimates (Rs. in Million) Budget Estimates Education 22, , , Archives Health 9, , , Population Welfare Manpower & Labour Management Admn Sport & Recreation Facilities Culture Services Social Security & Social Welfare Natural Calamities & Others Disasters 3, , , Religious & Minorities Affairs Total:- 37, , ,

40 40 Figure 2.6: Social Services Education Affairs and Services Education sector continues to be the priority sector in the overall policy framework of the present Government. Accordingly, against an allocation of Rs.22, million in financial year 2012/13, the estimates for financial year 2013/14 are pitched at 24, million representing an increase of 12%. Moreover, in line with the education sector vision of Chief Minister Balochistan and to achieve the targets envisaged in Education Sector road map, substantial resources allocation has also been made in the development budget of financial year Following initiatives are being taken in the education sector. Strengthening of Balochistan Education Foundation Rs million BEF (community Schools) Rs million Provision of Missing Facilities in schools Rs.1000 million Establishment of Balochistan Educational Endowment Fund (BEEF) Rs.5000 million

41 41 Table:2.10 Education Affairs & Services Education Affairs & Services Budget Estimates (Rs. in Million) Revised Budget Estimates Estimates Education (Colleges Side) Higher Edu. 5, , , Education (Secondary) 16, , , Education 22,458 23, ,243.8 Figure 2.7: Education Affairs & Services The reasons in increase in the budget under Education Sector are as under:- i. Increase in volume of budget is due to admissibility of time scale to teaching cadre. ii. Main increase in budget is due to increase in Pay & Allowances iii. Entitlement of conveyance allowance to all Government servants which was previously allowed to Government servants posted at District Quetta and Divisional Headquarter. iv. Inclusion of Adhoc Relief Allowance 20% of the basic pay.

42 42 v. Inclusion of 4137 posts in Budget 2012/13, which were sanctioned in FYs and Special SNEs. Similarly, the missing posts in School sides in District Turbat, Awaran, Jhal Magsi, Zhob, Kachhi, Noushki, Naseerabad, Sherani, Gwadar, Sibi, Kharan, Harnai, Lasbella and Mastung are reported in the CYF vi. For students of BMC the previous allocation was Rs Million, but now the same been has rationalized. As per actual allocation of scholarship previously reflected as 8.0 million has now been enhanced to Rs million in view of existing strength of students. vii. Funds for provision of missing facilities have been allocated for Schools and Colleges of the Province for the next financial year-2013/14. viii. Allocations have been made in the current financial year under the following heads in Schools Directorate : a) Starting of higher secondary classes Rs.5.00 m million b) Establishment of PTSMCs Rs.50 million ix. Current allocation of 150 million for free distribution of Text Books has been enhanced to Rs.250 million. Rs.180 million per District for establishment of two Classroom based Libraries one each each in boys and the same Girls School of each District. x. Allocation of funds as grant-in-aid in respect of the following Cadet Colleges of the province has been enhanced for the next financial year as under: Table:2.11 Health Services (Rs. in Million) S.No Name of District Current allocation Enhanced allocation Cadet College Mastung million million 2. Cadet College Pishin million million 3. Cadet College Jaffarabad million million 4. Cadet College K/Saifullah million million 5. Cadet College Panjgoor 2.00 million million In the overall allocation of Education Affairs & Services shown in budgetary provision relating to universities of Education, Health and Agriculture are also included.

43 43 Table:2.12 Health Services (Rs. in Million) S.No Sector Amount 1. Health Profession Allowances million 2. Scholarship / stipend Allowance million 3. Incentive Allowance million 4. Grant-in-Aid for five University in Balochistan million 5. Grant-in-Aid for (CASVAB) University of Balochistan 3.5 million Health Services Health services include Hospital Services, Public Health Services (laboratories and health related population welfare activities), and Health Administration. Details of current expenditure on the Health sector are shown in Table Major allocations are for Hospital Services which include current expenditures hospitals, public health services like medical institutions and health administration. Allocation for major tertiary care hospitals and grant-in-aid to autonomous hospitals has been granted and reflected for the first in Revised Estimates-2012/13 of Rs.1, million and Budget Estimates-2013/14 amounting to Rs.1, million. In line with the policy of the incumbent government to improve health facilities, an unprecedented allocation of Rs million has been allocated for New Policy Initiative and Implementation in FY-2013/14. Besides, permanent budget-2013/14 under recurring expenditures for health service has been rationalized and increased manifold in line with the requirements of the administration on ground in view of bolstering the sector in line with the policy of the new government due to which Budget Estimates-2013/14 stand Rs.11, million against Budget Estimates-2012/13 of Rs.9, million with increase of about 12 %.

44 44 Health Service Table:2.7 Health Services Budget Estimates Revised Estimates (Rs. in Million) Budget Estimates Hospital Services 6, , , Public Health Services Health Administration 2, , , Total:- 9, , , Figure 2.5: Health Services BE

45 45 Table:2.8 Other Allocations Other Allocations (Rs. in Million) Budget Estimates Purchase of Medical Equipment 1, Grant-in-Aid for Nawab Ghaus Bakhsh Raisani M. Hospital Mastug Grant-in-Aid for Children Hospital, Quetta Grant-in-Aid for GDA Hospital New Policy Initiatives and Implementation Total: 1, : ALLOCATIONS DEBT MANAGEMENT AND PENSIONS The itemized allocations on this account are shown in Table Debt Management Table:2.13 Debt Management Budget Estimates (Rs. in Million) Revised Estimates Budget Estimates Debt Servicing 3, , , Public Debt Discharged 17, , , Pension Table:2.14 Pension Budget Estimates Revised Estimates (Rs. in Million) Budget Estimates Pension 1, , , Gratuity / Commuted Value of Pension 5, , ,

46 46 CHAPTER 3: PUBLIC ACCOUNT 3.1 INTRODUCTION Article 118 of the Constitution of the Islamic Republic of Pakistan defines Public Account as all moneys which do not form the part of the Provincial Consolidated Fund but are: (a) received by or on behalf of the Provincial Government or (b) received by or deposited with the High Court or any other Court established under the authority of the Province. These transactions are outside the Provincial Consolidated Fund on both the receipt and expenditure side, and are categorized as: a) Unfunded Debt (deferred liabilities); b) Deposits and reserves; c) Remittances. Public Account consists of those moneys for which the Provincial Government has a statutory or other such obligation. These are in the form of trust money for which the Government has a fiduciary responsibility. Public Account consists of series of accounts, each of which is separately governed under specific rules framed for the said purpose. Main elements of the Public Account in the Annual Budget Statement are summarized as follows: a) Assets Cash and Bank Balances Receivable b) Deposits and Reserves / Liabilities Control Account Trust Account-Fund Trust Accounts-Others Special Deposit-Investments Special Deposit Fund

47 47 Following table summarises the Budget Estimates, Revised Estimates for FY and Budget Estimates for FY of the Public Account s inflows and outflows and their net effect. Table: 3.1 PUBLIC ACCOUNTS PROVINCE UNFUNDED FUND (RECEIPTS) (Rs.in million) Budget Revised PUBLIC ACCOUNTS OF THE PROVINCE Estimates Estimates UNFUNDED FUND (RECEIPTS) Budget Estimates G06103 State Provident Funds 1, , , TOTAL - UNFUNDED DEBT 1, , , DEPOSITS AND ADVANCES G06214 Balochistan Government Servants , Benevolent Fund G06408 Provincial Govt; Employees Group Insurance Fund G11215 Civil Deposits G10304 Zakat Fund PUBLIC ACCOUNTS OF THE PROVINCE UNFUNDED FUND (DISBURSEMENTS) G061 State Provident Funds 1, , , TOTAL - UNFUNDED DEBT 1, , , G103 DEPOSITS AND ADVANCES A- Bearing Interest G06214 Balochistan Govt; Servants BF G06408 Provincial Govt; Employees Group Insurance Fund G11215 Civil Deposits G10304 Zakat Fund PUBLIC ACCOUNTS OF THE PROVINCE DEPOSITS AND ADVANCES - CONTD. (RECEIPTS) G10134 Cheques and Bills 35, , , TOTAL - DEPOSITS AND ADVANCES 36, , , PUBLIC ACCOUNTS OF THE PROVINCE. DEPOSITS AND ADVANCES - CONTD. (DISBURSEMENTS) G03107 Advances not bearing interest G10134 Cheques and Bills 32, , , TOTAL - DEPOSITS AND ADVANCES 33, , , PUBLIC ACCOUNTS OF THE PROVINCE REMITTANCES. (RECEIPTS) Cash Remittances & Adjustments between offices rendering accounts to the same Accountant General G10407 P.W. Remittances G05107 Adjusting Accounts between Federal and Provincial Govts; TOTAL - REMITTANCES TOTAL - PUBLIC ACCOUNTS RECEIPTS 38, , , F01101 Deposits with State Bank - TOTAL - PUBLIC ACCOUNTS OF THE PROVINCE 38, , , TOTAL - PROVINCIAL RECEIPTS 92,

48 48 PUBLIC ACCOUNTS OF THE PROVINCE REMITTANCES (DISBURSEMENTS) Cash remittances and adjustments between offices rendering accounts to the same Accountant General. G10407 P.W. Remittances G10415 State Bank of Pakistan Remittances G05107 Adjusting Accounts between Federal and Provincial Governments TOTAL - REMITTANCES TOTAL - PUBLIC ACCOUNTS IMBURSEMENTS 35, , , F01101 Deposits with State Bank TOTAL - PUBLIC ACCTS OF THE PROVINCE 35, , , TOTAL - PROVINCIAL DISBURSEMENTS 98, RECEIPTS ASSETS Assets as Public Account receipts include cash and bank balances, investments, loans and advances, imprest monies, advances to departments and returns from investments and loans DEPOSITS AND RESERVES Deposits and Reserves constitute a major part of receipts of the Public Account. Deposits and reserves include intergovernmental adjustments, remittances, suspense funds, special deposit fund, welfare fund, development fund, education & training fund, Income Tax deductions from salaries, Personal Ledger Accounts (PLAs) and most importantly, Trust Account Fund, comprising the Provident, Benevolent and Insurance Fund receipts. Table 3.2 details the Trust Account Fund. 3.3 DISBURSEMENTS CURRENT ASSETS Outflows from Assets are included under the category of Current Assets which includes cash, bank balances and receivables LIABILITY Disbursements from Deposits and Reserves are indicated as liabilities. This is a contra item to the deposits and reserves indicated on the receipt side. In FY , the Public Account is expected to exhibit a positive balance. 04

49 49 CHAPTER 4: OVERVIEW OF THE PSDP Public Sector Development Program (PSDP) is a manifestation of government s planning acumen and that of its consistency in planning pattern over the years. Theoretically, it is an execution of medium and long term plans of the governments, both at federal and provincial levels. Practically, it includes programs and projects that may not conform to medium or long term plans. The PSDP is formulated in later part of every financial year. It contains listing of programs and projects with their cost (government s and that of donor, if any), expenditure till 30 th June of the preceding year, allocation for the current year and throw-forward amount: throw-forward is an amount to be provided to the programs/projects in the years to come for completion. The Development budget comprises development receipts and expenditures, which form a part of the Provincial Consolidated Fund in Account NO. 1 (Non Food). These are further divided into categories of Revenue and capital as follows: (i) (ii) (iii) (iv) Development Revenue Receipts Development Capital Receipts Development Revenue Expenditure. Development Capital Expenditure For all development activities in Balochistan, the provincial government spends annual allocations of funds as reflected in provincial PSDP, gets financial resources in the shape of development grants (both from federal and donor agencies) and the federal government also spends through federal PSDP. Scope of this analysis is limited to the last ten years provincial PSDP only and that too Government of Balochistan s funds and not those provided by the donor agencies though referral will be made to both donors funds and federal PSDP at some points in the analysis. The reason for not including foreign project assistance (donor agencies funds) in analysis is that the record available does not contain accurate figures of expenditure.

50 PSDP FORMULATION STEP The Planning & Development (P&D) department formulates and the coordinates execution of PSDP every financial year. Bullet description of general steps for formulation of PSDP is as follows: Overall size of PSDP is decided with tentative allocations to sectors/sub-sectors. Call letter is issued by P&D department to other departments for identifying schemes in their respective sector/sub-sector Priority committee meetings are held to select projects from among the identified Allocations (for both new and ongoing schemes) are decided for each program/project in the light of sector/sub-sector total allocation. Draft PSDP is prepared and presented to the Cabinet for discussions. Draft is finalized and approved by the Cabinet and Provincial Assembly. 4.2 FUNDS DISTRIBUTION TO SCHEMES Funds distribution to development schemes requires careful consideration of size of the scheme, annual financial phasing in PC-I, total number of schemes in PSDP, number of schemes in a particular sector, relative importance of schemes, percentage of allocation fixed for various sectors / sub-sectors. 4.3 TRENDS IN THE PSDP SINCE 2004 PSDP funding comprises of two parts: Government of Balochistan s (Government of Balochistan s) resource and foreign project assistance (FPA) i.e. funds provided by the donor agencies. Tentative size of PSDP is communicated by the Finance Division, Government of Pakistan each financial year. The provincial Finance departments may further define some adjustments in overall size of the PSDP before it is finalized. The Government of Balochistan s size has fluctuated steeply during the last ten years. In the year the actual size of PSDP was 24% lower than the planned size, while, on the other hand in is much higher than the planned size. This is due to active follow up by P&D department of the progress of the development schemes: holding progress review meetings and urging the executing agencies to accelerate pace of work. Funds were re-appropriated from slow moving to fast-paced schemes. Those schemes that showed promising progress

51 51 of work, funds allocations were enhanced over and above the planned size of the PSDP. The line departments were encouraged by P&D department to adopt proactive approach and utilize the funds released to achieve targets earlier than planned. From to , accumulated planned size of the PSDP is Rs million. Table 4.1: Planned & Actual Budget Position for Last Five years (Rs.iIn million) Planned Budget Actual Budget Year Planned FPA Total Actual FPA Total Total Figure 4.1: Graphs Shows Planned & Actual Budget Position for Last Five years

52 ANNUAL SECTORAL ALLOCATIONS: The sectors have been grouped into the following three main categories (sub-sectors are clubbed under these three sectors): SOCIAL a. Education b. Health c. Social welfare d. Water supply & sewerage e. Labor & manpower f. Culture g. Sports, tourism & youth h. Information Technology i. Women Development PRODUCTIVE a) Agriculture b) Forestry c) Fisheries d) Livestock & dairy development e) Industries & commerce f) Minerals INFRASTRUCTURE a) Transport & communication b) Energy (fuel & power) c) PP&H d) Irrigation e) Local Government f) UP&D

53 53 below: Analysis for the last five years in above group of sectors is as Figure 4.2: Five years analysis of Sectoral Allocation of Schemes In Balochistan, previous provincial governments have assigned greater priority to infrastructure. In infrastructure sector construction of road networks being the top of list. Social sector has been the second priority of the government while the productive sector the third. Following Graph below shows the comparison.

54 54 Allocations to infrastructure sector have been 92% and 63% higher than the productive and social sectors respectively. Utilization of funds has also been more than 100% of the planned size of the sector for road networks. Productive sector and Infrastructure sector have direct relationship e.g. irrigation supports agriculture. Allocations to former during have been Rs million and to later Rs million, while, in 2013 Productive Sector has allocation of million and Infrastructure has million. 4.5 ALLOCATED RESOURCES TO VARIOUS DEPARTMENTS INFRASTRUCTURE -SECTOR DEPARTMENTS ALLOCATIONS As narrated above infrastructure sector has been markedly dominated by the roads sub-sector. This also evident from the above analysis of number of schemes kept in previous years PSDPs and the allocations made SOCIAL -SECTOR DEPARTMETS ALLOCATIONS Each financial year, funds are spent on a number of ongoing and new schemes (varying in scope and size). Generally, development schemes are grouped under different sectors and sub-sectors in the PSDP that somewhat can be taken as departments allocation of funds. Exact amount of allocation is very difficult to calculate as the database of P&D department does not take into account details of umbrella schemes and of schemes that are implemented under block allocations of funds. From time to time, there have been block allocations bearing different names. These block allocations contain almost every type of schemes, which are implemented not only by the provincial departments but also by district governments. Some regular block allocations appearing in the PSDP are CM s Special Fund, Governor s Special Fund and Public Representative Funds. Between and , social sector got an allocation of Rs million. Only the schemes of

55 55 Education, Health and Public Health Engineering departments got allocations over billion rupees; rest of the social sub-sector received nominal allocation during the past ten years. The schemes of the department of Education s received the highest allocations with 35.0 % of the total Social Sector allocation. This allocation gets divided in the following four major categories of education: i. Primary ii. Middle iii. Secondary iv. College v. Technical Education vi. University Education vii. General Education The construction work involves academic blocks and other structures such as teachers and students hostels and boundary walls etc. In funds allocated to primary, middle and secondary education were Rs million, Rs million and Rs million respectively. The figure shows number of schools in Balochistan: Table 4.2: Number of Schools School Level Male Female Total Primary Middle High Total Development Strategy for Education Sector: The Government of Balochistan intends to adopt following development strategy for education sector to overcome lapses:

56 56 i. To decrease Infrastructure gaps in Education Sector e.g. on the physical infrastructure side Government of Balochistan requires a minimum of 7500 additional rooms to enroll 300,000 children in next few years. To achieve this target the Government of Balochistan intends to establish 750 new schools of 13 classroom each through a proper mapping of population to build grade-1 to 10 schools where there are big gaps. ii. The Government of Balochistan is also working Teacher Development Program, according to which teachers would be given training as per specialization if the field. For this purpose donors are also invited for funding in the program. For in service teachers they would be base line study for evaluation of teachers competency. iii. The Government of Balochistan is also working with private sector for uplift of education in the Province, for this purpose different donor agencies are also interested to invest HEALTH SECTOR: Following strategies are being adopted for Health Sector 1. The percentage of Health sector in PSDP would be increased from 3.57% in to 6.0% in Strengthening Primary HealthCare 3. Up gradation of BHUs into BHU Plus and RHCs into RHC Plus. Health sub-sector has been second priority of the Balochistan over the past ten years. In Public Sector Development Program (PSDP), development schemes in health sub-sector are generally represented by Curative side

57 57 and Primary Health Care or preventuive side of the Health care, but both groupings contain schemes that could have better been represented under a separate heading. This makes it difficult to actually work out the exact amount spent on both the groups. Table 4.3: Health Infrastructure in Balochistan S. No Type of Health Facility Nos. 1. Tertiary Hospital DHQ THQ RHC BHU Dispensaries MCH Centres Bedded / Civil Hospital TB Clinic Healthy Auxiliary Sub Health Centre Mobile Dispensary Public Health Engineering Public Health Engineering (PHE) department primarily deals with construction, extension, improvement and / or rehabilitation of water supplies. Balochistan Development Authority also implemented water supply schemes from time of time. Similarly, water supply schemes have also been taken up frequently under block allocations. Allocation to PHE department is 29.77% percent of the total allocation to the social sector during the period under consideration PRODUCTIVE-SECTOR DEPARTMENTS ALLOCATIONS Allocation figures tell that the productive sector has been the third priority of the Balochistan government since This sector received an allocation of Rs million. Agriculture and Mines and Minerals departments received almost equal amount of funds while Livestock and forestry departments rank third and fourth. Keeping in sight the span of over ten years and looking at these figures does not draw a matching line: even total allocation to the

58 58 productive sector suggests that nothing significant has been done to support Balochistan s economy. An analysis funds allocated for three groups is as under: Figure 4.2: PERCENTAGE OF FUNDS ALLOCATED

59 A REVIEW OF PSDP Table 4.5: Size of Provincial & Federal PSDPs PSDP Local Component FPA Total Provincial Federal Table 4.6: Number of Schemes in Provincial PSDP PSDP Total New Schemes 732 On-going Schemes 720 Table 4.7: Share of Priority Sectors in Provincial PSDP Priority Investment Sectors % age Roads Water Public Health Engineering 6.26 Education 5.96 Power 5.59 Physical Planning & Housing 3.94 Health 3.57 Others (PRP, CMSF, GSF, Foreign Aided) 16 Production sector 5.62

60 60 Figure 4.3: Distribution of PSDP Schemes in Various Sectors Table 4.8: Financial Progress of Development Schemes (Rs. in million) Projects No. of Schemes Allocation Releases Ongoing New Provincial PSDP Federal PSDP Figure 4.4: Comparison of Releases vs Allocation of PSDP

61 61 Table 4.9: Important On-going Projects OF Provincial PSDP (Rs. in million) Name of Project Cost Financial Progress Physical Progress Improvement of Quetta Roads % Construction of Roads % Khudabadan Nukker upto Iran Border, Turbat Buleda Rd, Zhob to Mir Ali-khail, Zhob Qamardin Karez, Saraghurgai to Ziarat Cross, Nawa Killi- Saraghurgai Road Networks, Dera Allah Yar to Hairdin Rd Section 2, Dera Allah Yar to Usta Mohammad Construction of Dams (Sawar Kaur & Rehabilitation of Wali Tangi Dam) % 27% Establishment of BRCs at Zhob, Uthal and impr; of % existing BRCs Reko-Diq Copper/Gold Project WSS for Reko-Diq Copper Gold Project N/A N/A Construction of Poly-Technique Institute at Uthal, Zhob, Khanozai, Gwadar, Turbat and Muslim Bagh %