The Khyber-Pakhtunkhwa government is pushing for an increase in the Annual Development Programme (ADP) for the coming fiscal year even as the finance department reminds it of province’s current monetary position.
The finance department proposed Rs104.5 billion for the ADP 2016-17, but the Pakistan Tehreek-e-Insaf-led coalition government is bent on a 10% increase. Officials of the finance and planning and development departments term this as “unrealistic and inflated”.
Reasoning it out
Officials privy to the budget development process say the finance department broke down the financial realities of the coming year before the Cabinet in a meeting held in March. The department presented its first budget strategy paper 2016-17 where it proposed Rs104.5 billion for the ADP which is Rs70 billion less than the current ADP.
“We portrayed the actual position the province is in which demands a smaller amount be set aside for the ADP as compared with the one set this year,” a senior finance department official, requesting anonymity, told The Express Tribune. “Setting unrealistic and inflated figures will backfire when money falls short.”
On deaf ears
He said the Cabinet objected to the figure proposed by the finance department as it wanted a 10% increase on Rs174.8 billion for 2016-17.
The official remarked the Cabinet comprises the province’s ‘elders,’ who clearly know where to get finances for inflated figures. “We say a person should cut his coat according to the cloth available, but since they [the government] insist on increasing the ADP, they better know how to meet expenses.”
Officials of planning and development department said the previous ADP was also unrealistic and it backfired which is why the government is in a crunch.
“We had an ADP of Rs100 billion in 2014-15; with a 10% increase it should have grown to Rs110 billion in 2015-16, instead it rose to Rs174.8 billion,” a senior planning and development official said, seeking anonymity.
He slammed the government, saying inflated figures were of no use when there is not enough money in its pocket. “The bureaucracy has been consistently stressing on the need to make the budget sagaciously, but the government is pushing for high figures and in the end [the government] will be looking for money everywhere,” said the planning and development official.
He explained they have to stop projects when funds fall short because of an overestimated ADP. “Persistent delays then increase the cost of the projects,” he added.
The budget strategy paper also calls for Rs20 billion for district ADPs for the coming year as compared to Rs30 billion set for the current year.
The total outlay of the 2016-17 budget has been reduced to Rs437.6 billion compared to Rs487.8 billion for 2015-16.
The finance department has also increased foreign project assistance by 10% for 2016-17, from Rs32.8 billion to Rs36.1 billion, but has called this a tentative increase.
The officials explained the government balanced the current budget by setting unrealistic targets for the province’s own revenue – like the goal of achieving Rs14 billion from the housing department and Rs8 billion from the forest department which are almost impossible to acquire in the remaining time.
“We have proposed more realistic targets for the departments based on our current experience,” an official of the finance department said. The department has dropped targets for provincial tax and non-tax revenue from Rs54.4 billion set for current year to Rs34.8 billion for the coming year by excluding around targets of Rs21 billion set for forest and housing departments.
When contacted, Minister for Finance Muzaffar Said was not available for comments.
Published in The Express Tribune, April 21st, 2016.
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