The Balochistan budget 2015-16 envisages a deficit of 26 billion rupees with a 25 percent increase in its current expenditure and 6.4 percent increase in development expenditure. While at first glance this allocation may merit criticism yet it is relevant to note that Balochistan has faced an insurgency for decades which requires appropriate amounts for law and order. Mir Khalid Khan Langove, advisor to Chief Minister Abdul Malik on finance, noted during his budget speech that the Malik administration has allocated 2.7 billion rupees for law and order, over 210 million rupees for purchase of modern weapons for the police and levies force and over 40 million rupees for purchase of necessary equipment for law enforcement agencies. Needless to add successive Balochistan governments have failed to exploit its mineral wealth estimated at billions of dollars mainly because of the insurgency and hence an attempt to deal with the issue must be fully supported. Unfortunately, however, the percentage allocation on law and order for 2015-16 is less than 2 percent of the 189 billion rupees which is the envisaged total current expenditure for the year.

So what component of the budget contributed the largest amount to current expenditure allocations? Unfortunately, like the Khyber Pakhtunkhwa (KPK) budget, salary/pension increases of civil servants made this the single largest component of the current expenditure. The rate of rise was estimated at 7.5 percent like the federal budget but with allowance increases the impact on incomes would no doubt be around 10 percent. Unlike the federal budget, however, the Balochistan government envisages creation of 5,000 jobs in government departments. It is unclear whether the creation of new jobs reflects a need based on an enhanced role of some departments/state-owned entities or whether it is a measure designed to bring the disgruntled Baloch nationalists back into mainstream provincial activities. Either way this measure too can be supported because the Malik administration continues to be proactively engaged in negotiating with the Baloch leadership in exile and the creation of government jobs may well be a component of some ongoing negotiations.

In terms of allocations it is unfortunate that the provincial government has increased subsidies on tube-wells to 8 billion rupees - a subsidy that is not targeted to the vulnerable though critics maintain that this spike may be also due to the ongoing negotiations with the exiled Baloch leadership.

The Balochistan budget like the budgets of the other three provinces is premised on revenue generation from the federal government which is almost routinely overestimated due to an over-ambitious growth rate generating an over-optimistic tax collection target. The federal budget indicated 171.488 billion rupees as the share of Balochistan in 2015-16 which includes 155.9 billion rupees under the divisible pool taxes and 14.7 billion rupees under straight transfers. The Balochistan government has also earmarked 10 billion rupees as revenue from other sources which may include sales tax on services collected by the Federal Board of Revenue on its behalf, at a charge of 2 percent of the total, given that the provincial government has not yet established its own revenue authority like the other three provinces. The Advisor to the Chief Minister on Finance, however, did commit that the Balochistan Revenue Authority will be set up in the forthcoming fiscal year.

The public sector development programme of the Balochistan government follows the federal pattern which is easily challengeable given the electricity shortages in the country. Be that as it may, the provincial government allocated the highest to roads (10.8 billion rupees) followed by solar and coal energy projects (3.5 billion rupees) and water sector (2.9 billion rupees). However, given the fact that social sectors (education and health) have devolved to provinces the Balochistan government allocated 10 billion rupees for education and 8.47 billion rupees on health - priorities that can be supported. However, actual allocations would depend on the realisation of resources from the federal government as well as its own resources which are unlikely to be as much as envisaged.

Copyright Business Recorder, 2015