The PPP-led Sindh government has presented a Rs 686 billion budget for fiscal year 2014-15. The budget deficit is around Rs 14 billion. The tax on the service sector has been reduced to 15 percent from 16 percent. The shortfall from this reduction will be compensated by bringing more sectors into the tax net. The Finance Minister Sindh, who is also the Chief Minister of the province, Syed Qaim Ali Shah, has asked the federal government to further decentralize the taxation system. Presently the Sindh government is heavily dependent on the federal government to largely meet its fiscal needs. In the current fiscal year, 71 percent of the revenue needs of Sindh will be fulfilled from federal transfers. The federal government due to its own anomalies in tax collection had been unable to dispense the allocated amount to the provinces under the National Finance Award in the last fiscal year. The Sindh government had to live with a shortfall of Rs 81 billion in federal transfers. It was because of this that many developmental projects in Sindh could not be completed. The Annual Development Plan for 2014-15 is set at Rs 18 billion, 17 percent less than the previous year.
The agriculture sector has been ignored yet again and a negligible tax target of Rs 512.1 billion has been set for the new fiscal year. Last year the government revised the agriculture tax targets in the middle of the fiscal year and decreased them by nine percent. Experts believe that unless this large contingent of land owners is brought into the tax net, requiring difficult decisions and political will from the government, tax collection will remain abysmally low. The consequence of favouring the agriculturists falls on the poor people who are always left to survive through financially rough times by themselves. Nothing substantial is laid out in the budget for an ordinary person other than raising the basic wage from Rs 8,000 to 12,000. The questions are: are the workers getting the basic wage? Have the governments, whether federal or provincial, developed any mechanism to ensure that people get the minimum wage? Is the private sector fully on board with the government on this issue? Scarcely could we answer any of these questions in the affirmative. The situation in this regard is very bad in the private sector. It is still the whims of the employers, not the law, which dictates how much a worker should get for his services. Governance is not about making laws, as is wrongly conceived by our governments; it is about implementation and enforcement of the laws. It is this complacency of the governments that has widened the gap between the powerful and the powerless. Already this equation does not mean equality; leaving it to ‘chance’ further complicates the matter. *