By Andrew Green

JUBA, June 19 (Reuters) - South Sudan's government has proposed a 17.33 billion South Sudanese pound ($5.6 billion) budget for the 2013/2014 fiscal year starting next month, a minister said on Wednesday, expecting oil flows to continue despite a row with Sudan.

A total of 8 billion pounds would come from oil exports, 1.5 billion from non-oil revenues and the rest from foreign grants and domestic borrowing, Information Minister Barnaba Marial Benjamin told reporters.

Benjamin said the proposed budget included improvements in health, education, agriculture and infrastructure projects. He gave no details.

The government would revise the budget and continue austerity measures should neighbour Sudan follow through on a threat to stop cross-border oil flows, he said.

In March, the two countries agreed to resume oil exports from the landlocked South through northern facilities after the South shut down in January 2012 its entire output in a conflict with Sudan over pipeline fees.

But Khartoum said this month it would halt oil flows within two months unless Juba stopped supporting rebels operating on Sudanese soil, claims denied by the South.

Analysts say there is little transparency about budget projections in South Sudan. They estimate that up to 70 percent of the budget is used to pay its bloated army and public service.

South Sudan has some of the worst health and education indicators in the world, a result of decades of civil war with Sudan, from which it seceded in 2011, and corruption.

But South Sudan citizens will still have to wait a little while for any development push. Though the new budget begins in July, Benjamin said austerity measures would continue at least until the end of 2013.

Oil used to make up 98 percent of the budget until the shutdown last year. Since then the government has improved tax collection, trimmed spending and borrowed funds by using oil as collateral though officials have refused to provide any details.

(Writing by Ulf Laessing; Editing by Michael Roddy)

((ulf.laessing@thomsonreuters.com)(Reuters Messaging: ulf.laessing.reuters.com@reuters.net))

Keywords: SOUTHSUDAN BUDGET/