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Estimates of Expenditure 2020-2021 Estimates of Expenditure 2020-2021 Explanatory Memorandum Page 1 Estimates of Expenditure 2020-2021 Karachi Metropolitan Corporation Major Head Wise Summary of Expenditure Budget 2020-2021 Development Portfolio Vs Expenditure Budget Estimates Nomenclature 2020-2021 Establishment. 15,573.877 Contingent. 2,153.655 Repairs & Maintenance. 219.645 Total Non Development 17,947.177 KMC Development Portfolio 4,387.745 District A.D.P. 2,500.500 Total Development 6,888.245 Total 24,835.422 Explanatory Memorandum Page 2 Estimates of Expenditure 2020-2021 The outbreak of the spread of pandemic COVID-19 and effects of lockdown all over the world has distressed the political, social, religious, economy and financial structures of the whole world. The world economic tycoon such as USA, China, Japan, almost all the European countries and many others are at the verge of collapse. Besides Stock Markets around the world pounded as well as oil prices have also been fallen. The same situation is being faced by Pakistan including port city Karachi. Resultantly, the revenue collection of KMC has been hampered dreadfully due to spread of COVID-19 as well as lockdown. Therefore the exchequer of metropolis is shrinking to meager balance in the KMC’s accounts. During the current financial 2019-2020, no any improvement whatsoever is made in the financial health of KMC. Similarly the Government of Sindh has continued the same fiscal policy as adopted after 2016 resultantly all functions of KMC are hindered due to short releases on account of OZT Share and Grant-in Aid. The budget documents of any organization portray the picture of its fiscal policy as well as its historical, accounting, financial and planning. Further the budget estimates of the any organization is a review of the present year’s and the performance and projection of the policy, programs and priorities in the next year as well as the next three years’ development plan as well. Due to shortage of sufficient funds many essential heads of expenditure could not addressed / incurred due to which ultimate sufferers are the citizens of Mega City. The heads includes purchase of medicines (Hospitals, Maternity Homes, clinics), payment of Utility bills, maintenance of Street Lights / Parks / Heavy Vehicles / Medical Equipments, Spray of insecticides, the same can be seen in the revised budget estimates figures for the year of 2019-20. The drastic reduction made in the revised estimates of contingences reduced to 72.029% in terms of percentage, similarly Repair & Maintenance revised estimates reduced 70.531% in terms of percentage. Explanatory Memorandum Page 3 Estimates of Expenditure 2020-2021 The Karachi Metropolitan Corporation was exerted to providing better amenities and services to the citizens of Karachi through education, health, recreation, sports, environment, communication, including the execution & maintenance of gigantic infrastructure from its own resources as well as with the financial assistance of local stake holders i.e. Provincial Government / Federal Government. In the absence of PFC Award from the provincial government since 2007, KMC has become a cash strapped entity and presently unable to disburse salary / pension dues to their employees / pensioners in time. It is a matter of fact that KMC is not in a position to finance the emergent hospital items i/c medicines, medical Gas, X-ray etc. EXPENDITURE BUDGET The expenditure budget may be defined as money allocated / earmarked for spending on something for betterment of an office and municipal services. The following statement presents the total outlay of KMCs expenditure for the ensuing year and preceding year with revised estimates: (Rs. in Million) S. No. BUDGET YEAR ALLOCATION 1. 2020-2021 (B.E) 24,835.422 2. 2019-2020 (R.E) 12,060.555 3. 2019-2020 (B.E) 26,438.888 The total expenditure of KMC reflected in the Budget Estimates for the next FY 2020-2021 is estimated to Rs.24,835.422 million as against the revised budget for the year 2019-2020 of Rs.12,060.555 million, which is Rs.12,774.867 million higher than the actual/revised budget in absolute terms. Explanatory Memorandum Page 4 Estimates of Expenditure 2020-2021 CURRENT EXPENDITURE. The current expenditure is an expenditure on goods and services consumed within the current year, which used to be made recurrently to sustain the municipal services. Minor expenditure on items of equipment, below a certain cost threshold, is also reported as current spending. It also includes the funds allocated for the establishment, contingent and maintenance of existing municipal services expenditures. The summary of budget estimates of Current Expenditure & Development Expenditure for the next financial year 2020-2021 is as under: (Rs. in Million) Sr. Nomenclature Amount No. 1. Current Expenditure. 17,947.177 2. Development & Capital Expenditure. 6,888.245 Total. 24,835.422 Explanatory Memorandum Page 5 Estimates of Expenditure 2020-2021 Major Head Wise summary of Current Expenditure:- Sr. Budget Revised Budget Nomenclature No. Estimates Estimates Estimates 2020-2021 2019-2020 2019-2020 1 Establishment. 15,573.877 10,226.257 14,462.326 2 Contingent. 2,153.655 656.849 2,280.905 3 Repairs & Maintenance. 219.645 66.484 222.040 Total 17,947.177 10,949.590 16,965.271 The expenditure of establishment of Rs.15,573.877 comes to 86.77% of the total current expenditure Rs.17,947.177 million and more than 100% of total OZT Share and Grant in Aid of Rs.9,838.437 million for the year 2020-21 as released by the GoS. As the same image is also build in the revised budget 2019-2020 figures of current expenditures. Explanatory Memorandum Page 6 Estimates of Expenditure 2020-2021 CURRENT EXPENDITURE. The department wise current expenditure is given below: Estimated Revised Estimated Sr. Department Budget Estimates Budget No. 2020-2021 2019-2020 2019-2020 Secretariat (Mayor, Deputy Mayor, Metropolitan Commissioner, Sectt. 1 Council, Veterinary, HRM & Media 817.337 522.012 770.393 Management, Religious Affairs departments) 2 Finance & Accounts, MUCT 335.521 211.070 311.326 3 Parks & Horticulture 868.126 531.767 784.632 4 Law. 166.599 92.910 160.020 Revenue Departments (Land, Enforcement, Estate, Katchi 5 1,142.579 862.248 994.441 Abadies, PD Orangi & Charged Parking). 6 Recreation, Culture & Sports 716.4 416.224 662.408 7 Information Technology. 58.148 31.290 46.143 Enterprise & Investment 8 79.496 54.306 68.278 Promotion. 9 Medical & Health Services. 4,880.392 2,541.138 4,467.862 10 Municipal Services 3,266.483 2,189.399 3,018.507 11 Engineering 1,072.331 571.988 1,134.896 12 Transport & Communication. 19.665 0.161 20.965 Repayment of Loans & Pension 13 274.100 39.950 275.400 Fund other Misc. Expenditure. 14 Pension Reserve Funds 4,250.000 2,885.128 4,250.000 Total 17,947.177 10,949.590 19,965.271 Explanatory Memorandum Page 7 Estimates of Expenditure 2020-2021 The current expenditure comprises of establishment, contingent & maintenance / repair works. This is also called non-development expenditure. As indicated in the above table, the overall estimated current expenditure of KMC for the FY 2019-2020 is Rs.19,965.271 million, which has been curtailed / revised to Rs.10,949.590 million during current FY 2019-2020 due to meager financial position as well as short releases from GoS. Keeping in view the prevailing financial scantiness, KMC has reduced 10% allocation of current expenditure to Rs.17,947.177 for next FY 2020-2021 as compared to allocation of FY 2019-2020. ESTABLISHMENT EXPENDITURE. (Rs.in Million) Nomenclature Year Amount Budget Estimates 2020-2021 Rs.15,573.877 Revised Estimates 2019-2020 Rs.10,226.257 Budget Estimates 2019-2020 Rs.14,462.326 The establishment budget estimates for next year 2020-2021 is Rs.15,573.877 million. The above figures reflects an increase of Rs.1,111.551 million over the budget estimates of 2020-2021 and 7.69% in terms of percentage. The establishment expenditure of Rs.15,573.877 comes to 86.77% of the total current expenditure of Rs.17,947.177 million. The allocation for establishment expenditure for the year 2020-2021 has increased 8% to the last year allocation of Rs.14,462.326 million by adding 10% increase in salary of officials (BPS-01 to BPS-16) and 5% increase in salary of officers (BPS-17 & above) as announced by the Chief Minister Sindh in his Budget speech in Provincial Assembly on 17.06.2020. The establishment expenditure of current FY 2019-2020 Rs.17,947.177 million has been revised & reduced to Rs.10,226.257 million mainly due to non-payment of 15% enhanced salary to the officials / officers of KMC from July 2019 to April 2020 and also non-payment of Fire Risk Allowance (overtime) to the Firemen in the whole year. Explanatory Memorandum Page 8 Estimates of Expenditure 2020-2021 Unfortunately, KMC’s retired pensioners are also deprived of the benefit of 15% increase in monthly pension, which has notified by the Government of Sindh vide No.FD(SR-III)3-230/2013(ProvI) dated 17th July-2019. The impact of this 15% increase comes to Rs.33.00 million per month. However, KMC is not in a position to give the benefit of this increase to their pensioners. Over 22,000 pensioners are waiting for to get their enhanced pension as getting by the pensioners in entire Sindh. It is quite injustice as the same benefit is availing pensioners throughout Sindh Province since July 2019. The following points are required to be kept on record that: Since 2009 no appointment were made in KMC.
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