Investor Presentaiton

Chapter X - Breaking the Mould: Inclusive Budgeting, Framework for Rolling Expenditure and the Rest P PART I: FISCAL DISCIPLINE & AUSTERITY MEASURES rovincial Government, as a matter of policy adheres to broad-based austerity by observing prudent financial management and judicious reduction of expenditure without compromising the essential and core service delivery and development mandates. In pursuance of this, Government of the Punjab adopted measures for ensuring strict Fiscal Discipline and Austerity Measures for the Financial Year 2019-20 which shall continue into the FY 2020-21 as well. To ensure stringent monitoring, Finance Department has institutionalized the preparation of a Ready Reckoner updated on monthly basis. This brief but concise document captures the essence of fiscal operations and steps in terms of fiscal discipline exercised during this period. From next FY, Finance Department plans to ensure a wider dissemination of the same to all Provincial Government Departments and also to the Federal Government. This Hard Budget constraint led to massive savings in the FY 2019- 20 to the tune of PKR 61 Billion through Supplementary Grants and PKR 1.5 Billion under other austerity measures. Some of the core elements of ensuring fiscal discipline and austerity regimes are control of Supplementary Grant, Ban on Purchase of New Vehicles (except Ambulances for Hospitals, Buses and Coasters for Educational Institutions, Tractors / Trollies, Dumpers, Water Bowsers, Fire Fighting Vehicles, Flood Relief & Rescue Equipment(s) / Vehicles, Motorcycles), Ban on Purchase of Air Conditioners, Ban on Furnishing of Houses and Discretionary Grants to the Provincial Ministers and Ban on Up-gradation of Posts, inter alia. RECEIPT: . • READY RECKONER Correct up to 13-04-2020 For FY 2019-20, FBR target has been fixed at Rs. 5,555 bn. (Projection Rs. 4000 bn) accordingly, Punjab's share in Federal Divisible Pool (FDP) amounts to Rs. 1,601 bn (Projection Rs. 1149 bn) • Punjab has received Rs. 852.5 bn till 31 March, 2020 as its FDP share against Rs. 740.2 bn for the same period during LFY 2018-19 (15% ) Provincial Own Source Revenue (OSR) target for CIY has been fixed at Rs. 388 bn (Projection Rs. 262 bn). against actual receipt of Rs. 273.1 bn for LFY (42%) Provincial Own Receipt (OSR) are Rs. 218.1 bn (Tax Receipts Rs.152 bn Non-Tax Receipts - Rs.66.1 bn) against Rs. 183 bn. for the same period during LFY (19%) till 31 March, 2020. Status of major financial receipts is as under: • PRA Rs. 79.9 bn (18.7%) E&T Department- Rs. 22 bn (-8%) . Net Hydel Profit - Rs. 6.5 bn Tax Relief Package of Rs.18 bn (Convid-19) EXPENDITURE: DEVELOPMENT BUDGET • • BOR Rs. 55.9 bn (5.6%) Non-Tax & Others - Rs. 66.1 bn (73%) Annual Development Program 2019-20 Rs. 350 bn against Rs. 238 bn for LFY (47%) Indicative Cash Cover for ADP up till 3rd quarter Rs. 240 bn • Status of Development Funds: . Funds released - Rs. 226 bn CFY against Rs. 164 bn LIY (38%) Utilization - Rs. 159 bn CFY against Rs. 114 bn LFY (39% +) FD has released Rs. 226 bn against Rs. 257 bn released by P&D. NON-DEVELOPMENT BUDGET Non-Development Budget for CFY Rs. 1,298.8 bn (Projected Expenditure Rs. 1.241.1bn) Funds for 4th quarter have been released. Updated status is as under: Salary funds released (100%) Rs. 337.6 bn. Expenditure Rs. 228.9 bn (Projection-Rs. 315 bn) ⚫ Non-salary funds released (90%)- Rs. 251.5 bn, Expenditure Rs. 142 bn (Projection-Rs 260 bn) ⚫ Funds for Purchase of Medicines released - Rs.28.5 bn. Expenditure Rs. 14.4 bn . Rs. 15 bn for Mitigation & Control of Covid-19 for the following Departments: • SIC & MED-Rs. 6.7 bn, P&SIIC- Rs. 5.2 bn, PDMA- Rs. 2.6 bn, Zakat Deptt - Rs. 708 mn FIRST STATEMENT OF EXCESS & SURRENDER ISSUED ON 7TH JANUARY, 2020. Thirty Departments submitted First Statement of Excess & Surrender, Excess demanded- Rs.23.1 bn, Beneficiary Departments - SIIC&ME - Rs. 13 bn, P& SIIC-Rs. 5 bn & S&GAD-Rs.0.99 bn NET SUPPLEMENTARY GRANTS FOR FY 2019-20: • . * Net Supplementary Grants approved up till 31" meeting of SCCFD (19-03-2020) "Rs. 56.1 bn • Newly approved funds Rs. 33.6 bn (including Rs. 17.33 bn for PTPL by Provincial Cabinet). Unspent & Lapsed funds (Donor and Federal Govt.) Rs. 22.5 bn Total supplementary grant regretted Rs. 60.9 bn Net Supplementary Grants regretted by SCCFD Rs. 6.8 bn Net Supplementary Grants regretted by Finance Department - Rs. 54.1 bn Without Supplementary Grant of Food Account-11-Rs. 40 bn PART II: SCCFD - Role in Policy Making Standing Committee of Cabinet on Finance & Development (SCCFD) has played a pivotal role in effective and efficient Policy Making during the FY 2019-20. Unlike the past practice where agenda items were primarily restricted to decisions on Supplementary Grants, the SCCFD during FY 2019-20 has assumed the role of a more robust forum taking key decisions that have had major bearing on the fiscal and Development trajectory of the Province. Some of the key decisions are highlighted as follows: 1. Sustainable Model for WASAS 2. HUD&PHE Department directed to finalize a comprehensive and sustainable financial model for WASAs under the aegis of an institutionalized mechanism headed by the Chief Secretary and including Finance Department, Planning & Development Board and Urban Unit. Sustainable Model for PHA The Committee directed the HUD&PHE Department to present a sustainable financial model for the Parks & Horticulture Authority in the wake of the judgement of the Supreme Court of Pakistan impacting Revenues. 3. Dynamic Plan for CFMP The Committee directed that the Punjab Information Technology Board (PITB) would draft a comprehensive and holistic overview of the Citizen Feedback Monitoring Programme (CFMP) along with practical suggestions and solutions to ensure effective utilization of the programme that would result in responsive, dynamic, transparent and efficient Governance. Page 77

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