Sindh utilising major portion of uplift budget in debt repayments

Sindh utilising major portion of uplift budget in debt repayments

Sindh utilising major portion of uplift budget in debt repayments
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KARACHI: Despite having sufficient development budget, the spending of the Sindh government is on the decline for the last few years, while it remained the lowest in 2018/19, resulting in the lack of employment opportunities, according to a report issued by the Auditor General of Pakistan.

Besides, the economic activities are also being hampered in the province, leading to a rise in poverty, which is not a good omen, it added.

The report for the fiscal year 2019/20 showed that the debt owed by the Sindh government has ballooned and the provincial government is utilising the development budget in retiring the debt acquired in the last several years.

The net revenues of the Sindh government showed a growth of 9 per cent during the fiscal year 2018/19, compared with the fiscal year 2017/18. The spending also remained low, as it registered a fall of 8 per cent during the same period, owing to a massive reduction in the development budget.

Similarly, the Sindh government reduced the development budget for the fiscal year 2018/19 by 61 per cent to Rs173 billion from Rs282 billion. Of this, only 39 per cent, (Rs109 billion) uplift budget was utilised.

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The government spent 92 per cent of the total budget on physical assets, 49 per cent on civil works and 42 per cent was spent on the renovation and maintenance work, while 262 per cent was spent on debt repayments and 49 per cent on debt servicing.

During the fiscal year 2018/19, a total of Rs47.286 billion were spent on debt repayments, while Rs5.733 billion were spent on the debt servicing.

During the fiscal year 2016/17, the development spending accounted for 23.54 per cent of the total amount, 24.41 per cent during the fiscal year 2017/18 and only 12.61 per cent was spent during the fiscal year 2018/19.

The decline in the development budget can also be attributed to the reduction in federal grants, which are provided for the development projects, the report said.

During the audit of the fiscal year 2018/19, irregularities amounting to Rs298 billion were identified. These included Rs3.270 billion in employees expenses, Rs47.902 billion in purchases, Rs5.664 billion in the accounts management by the commercial banks, Rs964 million related to service delivery and Rs1.19 trillion worth of irregularities in various other departments and fraud and corruption cases worth over Rs37 million.

According to the report, no records of the amount worth Rs1.14 trillion was provided for the audit.

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The irregularities in the Sindh government spending is mostly attributed to the non-implementation of the Sindh Public Procurement Regulatory Authority (Sapra) rules, failure to collect the government fixed tax rate, non-compliance of the rules and regulations regarding the human resources and the absence of access to the records for the audit.

The report questions the economic performance of the Sindh government and can be used by the people who are against giving more autonomy to the provinces in support of their narrative.

The report also dispelled the impression created by the Sindh government of an increase in the development budget and the claim that its financial management is better than other provinces.

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