Karachi, June 10, 2023: The Sindh government Saturday announced the provincial budget for the fiscal year 2023-24, focusing on key areas of development and growth. With a total outlay of approximately Rs2.25 trillion, the budget reflects a 31 percent increase compared to the previous fiscal year’s estimates of Rs1.71 trillion.
Presented by Syed Murad Ali Shah, Chief Minister of Sindh, this marks the fifth budget of the current tenure of the Pakistan Peoples Party (PPP) in power. The budget outlines allocations and plans to address various sectors and meet the needs of the province.
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The budget estimates for Current Revenue Expenditure (CRE) in 2023-24 have been set at Rs1,411.221 billion, representing a 17.65% increase from the estimates of Rs1,199.445 billion for the year 2022-23. The rise is primarily attributed to an extensive recruitment drive, particularly in the Education sector, resulting in increased employee-related expenses.
Additionally, the budget proposes a significant increase in Current Capital Expenditure, with a proposed allocation of Rs136.256 billion. This represents a substantial 150% increase compared to the budget estimates of Rs54.481 billion for the year 2022-23. The surge in expenditure can be attributed to the repayment of interest due to the depreciation of the currency exchange rate, which has risen from PKR 186 to PKR 300 per USD.
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The budget also includes a proposed investment allocation of Rs88.2 billion, comprising Rs26.0 billion for the Sindh Pension fund and Rs58.0 billion for bridge financing of various PPP-led development projects through the Viability Gap Fund. This amount reflects a twofold increase compared to the budget estimates of Rs23.6 billion for the year 2022-23.
For provincial development expenditure, the budget estimates for the year 2023-24 stand at Rs700.103 billion, a significant increase from the current year’s budget estimates of Rs459.657 billion. Notably, Rs30.0 billion has been earmarked for district Annual Development Program (ADP).
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The budget also highlights the importance of federal transfers, which depend on the annual collection by the Federal Board of Revenue. The prevailing economic conditions, currency depreciation, and balance of payment constraints can influence national economic indicators. The Chief Minister appreciates the federal government’s commitment to achieving annual targets and hopes to receive funds according to estimates in the next financial year.
In this regard, the budget sets federal transfer estimates at Rs1,353.227 billion for the financial year 2023-24. This includes Rs1,255.062 billion for divisible pool components, Rs64.424 billion for straight transfer components, and Rs33.741 billion for OZT grants. These estimates show a 27% increase compared to the budget estimates of Rs1,055.53 billion in the current financial year 2022-23.
Over the past five years, the Sindh government has implemented fiscal reforms to enhance provincial revenues and reduce the budget deficit. With the expectation of augmented collection in the next financial year, the budget proposes ambitious targets for major revenue streams. The tax revenue target for the financial year 2023-24 is set at Rs469.9 billion, comprising various components.
In addition to tax revenue, the budget aims to generate non-tax revenue, with a proposed target of Rs32.0 billion for the next financial year, 2023-24. This revenue will contribute to the overall funding of development projects and government initiatives.
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Furthermore, the budget incorporates grants related to Foreign Project Assistance (FPA), Federal Public Sector Development Program (PSDP), and budgetary support allocations. The budget estimates for FPA components in 2023-24 amount to Rs266.691 billion, covering 29 foreign-assisted projects from institutions such as the Asian Development Bank, the World Bank, the USAID, and the JICA.
Under the federal PSDP, the budget estimates allocate Rs22.912 billion for projects offered through this program. Additionally, a sum of Rs5.92 billion has been set aside for budgetary support, which will contribute to the overall funding and implementation of various government initiatives.
These allocations reflect the government’s commitment to leveraging both domestic and international resources to drive economic growth, infrastructure development, and social welfare programs in the province.
The Sindh government’s budget for the fiscal year 2023-24 demonstrates a comprehensive approach to address the diverse needs of the province. Through strategic revenue generation, effective allocation of funds, and the utilization of grants and foreign assistance, the government aims to foster sustainable development and uplift the living standards of the people of Sindh.