The Rs 319 billion ADP is Rs 31 billion less that the development of programme of Punjab, and Rs 34 billion more than Sindh provinces, he said adding that Rs 236 billion has been allocated for the development program in settled districts and Rs83billion for the merged areas. The finance minister announced a five percent adhoc relief in the salaries of the employees from BPS-17 to 19 and ten percent same relief for the employees from BPS-16 and downward.
The Finance Minister also announced a 12 percent reduction in the salaries of the cabinet members and said that due to tough economic conditions the government was in no position to increase salaries of the employees of BPS-20 to BPS 21. Similarly, the salaries of the civil servants posted against positions with additional allowance will also not be increased.
The Government, he said saved Rs95 billion through austerity measures during the outgoing fiscal year to enhance the development program of the province. Regarding receipts that the province will obtain during the next fiscal, the Finance Minister said the province will receive Rs 453 billion from federal divisible pool as its share, Rs 54.5 billion from divisible pool as one percent share on war on terror, Rs 25.6 billion as royalties and surcharge on oil and gas, Rs 21.2 billion as net hydel profit, Rs 34.5 billion as profit on hydel power, Rs 53.4 billion as provincial tax and non tax receipts, Rs 82 billion foreign aid assistance, Rs 24.7 billion from other sources and Rs 151 billion grant for merged tribal districts.
On the expenditures side, the finance minister told the house that Rs 256 billion would be spent in old districts, Rs 69.9 billion on Salaries, Rs 93.5 billion on non-salary head, Rs 37.6 billion on other running expenditures, Rs 46 billion on provincial ADP and Rs 82 billion foreign aid assistance.
For the merged areas, he said Rs 79 billion has been allocated for running expenditures and Rs 83 billion for the development outlay in the tribal districts. Therefore the total surplus comes to Rs 45 billion as against the total expenditures of Rs 855 billion.
Defending the government's decision about increasing retirement age of the employees, the Finance Minister said this step should have been taken much earlier, adding: "I am glad that the KP has taken lead in this regard". He said that no increase in retirement age has been made for the last forty six years, and added that this decision was not taken overnight rather it was implemented after detailed consultations with experts and proper search.
The decision to increase retirement age to 63 would help save Rs 20 billion per annum. He maintained that every year thousands of employees opted for pre-mature retirement and take full pension benefits besides taking second salary from the private sector. "This is public money-is this the justified and judicious utilization of the money?" he asked.
Jhagra said the KP Cabinet approved the proposal of pre-mature retirement and made it conditional with 25 year service or fifty years age, whichever comes first. The retirement is always connected with life expectancy, he said adding in 1947 the life expectancy was 45 and the retirement age was fifty.
Similarly, in 1973 the retirement age was enhanced to 55 whereas the life expectancy remained 45 whereas today the life expectancy has jumped to 67, therefore it is necessary to increase the retirement age.
He rejected the notion that increase in retirement age would lessen employment opportunities for the youth and maintained that only ten thousand people retired out of a total labor force of 6.5 million which comes to 0.1 percent. These posts remained vacant every year as new inductions were made against the new post, he explained. "We are going for record recruitment in next fiscal year," he told the house.
As many as 30,000 jobless would be provided jobs in settled districts and 17,000 in the merged districts during the next fiscal and the saving thus achieved would be utilized on creation of 40,000 to 50,000 jobs in private sector, he explained.
"Secondly, promotion of not a single official and officer would be affected through this as we are working on promotion laws as well, he maintained. "We are laying the foundation of new culture wherein the people would not desire for government jobs only. No country can develop sans involvement of private sector," he said. He also announced an increase in the minimum wage of the labor class to Rs 17,500 from Rs 15,000.
Regarding increase in revenue by broadening the tax base, the Finance Minister said no country in the world can develop without generating resources to fund its development. "For 70 plus years, we tried to search for the short cut that would negate this truth. We haven't found one. Pakistan's Tax-to-GDP ratio remains as low as 12.9%. India is at 18%, he said.
"Most developed countries are above 30%. Last year, we pledged to change this, starting with reform of the Khyber Pakhtunkhwa Revenue Authority (KPRA). Within 11 months, non-telecom KPRA revenues increased by 49% versus last year as a result of this effort. With revenue from the telecom sector now reinstated by the Supreme Court, we are confident that actual collection will double in the next year. "Therefore, in 2019-20, we have set the highest ever revenue target for the province of Rs 53.4 billion, a 54% increase over this year's Revised Budget Estimates. By 2023, we are targeting Rs 100 billion as our revenue target, more than three times what we collect today.
He said, "We are doing this primarily by broadening the tax base. In fact, are reducing taxes in many places, only adjusting minor fees for inflation. We are now placing 28 out of the 58 taxable services at a reduced tax rate of below 15%, versus 9 today. "These include restaurants, wedding halls, and electronic media, property dealers, automobile dealers, rent-a-car businesses, and contract manufacturing, legal and medical services as well other professional services, cinematographic services, photographers, broadcasting figures, call centres, amusement and entertainment services, beauty parlors and gyms amongst others.
"In particular, we are reducing the tax rate on ride hailing services to 2%, and on online marketplace services to 5%, because we believe that these will go a long way towards job creation for the youth.
"We are also reducing or making minor adjustments to various fees and taxes in other sectors as appropriate with details available, including the transport sector, a core sector for this province, where we are reducing fees to match the rates in Punjab."