K-P clears Rs198.7b ‘interim’ budget

Funds reserved for ongoing development schemes, paying salaries and debt

PESHAWAR: The Khyber-Pakhtunkhwa cabinet on Thursday approved a budget of Rs198.7 billion for the first four months of the fiscal year 2018-19.

While the budget includes a Rs53.1 billion allocation for development expenses, none of that money will be spent on new schemes.

A further Rs145.8 billion will be spent on non-development expenditures.



The budget was approved in a meeting of the provincial cabinet chaired by Khyber-Pakhtunkhwa (K-P) Caretaker Chief Minister Justice (retired) Dost Mohammad Khan.

Later, while briefing the media about the budget, caretaker finance minister Abdur Rauf Khan and Finance Secretary Shakeel Qadir Khan said that the government had prioritised expenditure on social welfare sectors in their four months.

Providing a breakdown of the budget, they said that it includes a Rs630 million allocation for the education sector, Rs230 million for the developmental of the health sector, Rs59 million for computerising land records of the revenue department, Rs350 million for setting up drinking water supply schemes, Rs53 million for the police department, Rs200 million for industries, Rs339 billion for building roads, Rs480 million for the Billion Tree Tsunami project, Rs121 million for the Peshawar Zoo, Rs83 million for tourism and Rs200 million for other developmental schemes in Peshawar.

The caretaker finance minister said that funds allocated in the four-month annual development programme will be spent only on on-going schemes. Moreover, he added that schemes which are near to completion will be prioritised .

The government will transfer Rs66.4 billion to the district governments, including Rs9.8 billion for developmental schemes. However, a major chunk, or Rs46.7 billion, will be used for paying salaries while Rs7.7 billion will be used for other non-salary expenditures and Rs2.2 billion as grants to local councils.



Salaries and pensions

Detailing the non-development expenditures, they said that over half of Rs145.8 billion current budget, around Rs84.2 billion, will be spent on paying salaries of government employees.

A further Rs20 billion will be spent on paying pensions of retired employees.

Similarly, Rs3 billion will be used to pay off the debts accrued by the province.

They explained that allocations for salaries, pensions and debt servicing have increased by 16 per cent, 13 per cent and 11 per cent respectively over the last fiscal year.

The rapidly inflating wage and pension bills have terrified Finance Secretary Shakeel.

“If the salaries and pensions continue to expand at the same rate with the government doing nothing to control it, then we will be limited to only one job, which is to distribute salaries and pensions in the province,” he said, adding that they had introduced pension reforms and computerised the data of pensioners leading to a corresponding drop in pension growth from double figures to single figures.

However, he insisted that the pension regime has to be changed and the government has to move towards a contributory system along with other solutions.

Moreover, the finance secretary said that the salary bill has been rising at a pace of 17 to 18% annually, pushed primarily by new recruitment in the province along with annual increments and up-gradation. This, however, did not stop the cabinet from approving a 10 per cent rise in ad-hoc relief allowance for government employees along with a 50 per cent increase in the house rent allowance for employees — on the pattern of the federal government.

Published in The Express Tribune, June 29^th, 2018.