Centre holds back dues: K-P forced to loosen own purse-strings

Allocates significant sums for welfare, development from own resources.

ISLAMABAD: The PTI-led Khyber-Pakhtunkhwa (K-P) government has allocated Rs294 billion as a ‘welfare’ budget in addition to making a separate allocation of Rs161 billion as ‘development’ budget after the Centre excused itself from paying the K-P’s dues.

The Centre owes the K-P Rs225 billion, which have not been paid in the outgoing fiscal year ending on June 30. It has now categorically conveyed its refusal to be of any help, citing ‘acute shortage’ of funds; however, the K-P accuses the Centre of depriving the province of its due share due to the PTI’s ‘principled stance’ on Panama leaks issue.

The scenario has prompted the K-P to make significant allocations for development and public welfare sectors using its own resources, which also rely on direct foreign assistance. Still, the desired targets of increase in welfare and development budgets are not met in the K-P’s annual budget of Rs505 billion.

The K-P’s budgetary allocations for the upcoming financial year 2016-17 suggest an increase of 12 per cent in the province’s welfare budget compared to Rs259 billion of the financial year 2015-16.

Sources said the province wanted to increase both the welfare and development budget by 25 per cent but due to shortage of funds, the desired targets remained far from being achieved.

The K-P’s development allocation of Rs175 billion in the last fiscal year 2015-16 was 20 per cent higher as compared to that of fiscal year 2014-15, when Rs139 billion were allocated for development.

On the contrary, the development budget (of Rs161 billion) for the new fiscal year  shows a decrease of 8 per cent in comparison with the province’s current development budget of Rs175 billion.

“This year, we did not get a single penny out of the total Rs225 billion payable to us. As a result, we cannot make significant allocations for welfare and development sectors,” said an official, involved in the K-P government’s financial matters.

Published in The Express Tribune, June 23^rd, 2016.