Budgeting for K-P

The Khyber-Pakhtunkhwa government presented a Rs505 billion budget on June 14

The Khyber-Pakhtunkhwa (K-P) government presented a Rs505 billion budget on June 14 as the tradition of heckling the provincial finance minister by the opposition was witnessed yet again during the budget session. Ruled by a political party that is in its first term in office, K-P’s financial managers have shown signs of inexperience as well as of the change they have promised all along. Any budget-making exercise should, ideally, keep revenue estimates on the conservative side, while projecting expenditures to be slightly on the higher side in a bid to keep finances under control. Allocations should also reflect the government’s priorities and should be in line with the overall vision of the country. Sadly, Pakistan doesn’t seem keen on following a coherent strategy and the result is a massive off-gradient plan where every province is following its own agenda.

K-P’s budget, however, was always going to be different as it is not just being presented by a political party that rides on the slogan of change, this party is also tackling a different set of issues from the rest of the country, including massive security challenges, a different landscape and location as well as different sets of resources. The royalty K-P receives on crude oil has undergone a massive plunge in the last few years as the price collapsed, and gas has not been able to compensate for the fall. Encouragingly, the province’s tax receipts have doubled ever since the PTI took over and it is now delving into areas that were untapped before. The share of indirect taxes in the budget continues to be less than one-fifth of total collection. But the area where K-P has least focused on is education. Its spending on the sector was much less than estimated in the outgoing fiscal year and now allocations for it have also dropped. This is a clear sign of the government’s priorities. One hopes that K-P’s development agenda does not fall on the wayside because the wellbeing of the province is important for the progress of the entire country.

Published in The Express Tribune, June 16^th, 2016.

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