PHOTO: AFP
Budget documents showed that the government has estimated its expenditures for the year to be around Rs855 billion. Of this, the government intends to spend Rs693 billion on the settled districts and Rs162 billion on the newly-merged districts.
Revenues
The budget documents showed that in the next financial year, the provincial government hopes to receive Rs740 billion from the federal government under various heads and payments.
Of this, Rs453.2 billion will come in the shape of federal tax assignments, Rs54.5 billion will comprise the 1% of the divisible pool on the war against militancy.
Moreover, K-P expects to receive Rs25.6 billion as royalties for oil and gas and other surcharges. Estimated net hydel profits (NHP) have been set at Rs21.2 billion and arrears of Rs34.5 billion. It also expects an unspecified sum for NHP under the AGN-Qazi formula.
During his budget speech, Jhagra complained that the province has never received its full share under the formula.
“Our calculations show that this year, our share under the formula will be Rs129 billion. Instead, we get only Rs21.1 billion,” Jhagra said. He urged the federal government to pay the arrears and to start paying the NHP dues on a monthly basis like other transfers.
Moreover, he called on Prime Minister Imran Khan and federal ministers for water and power to sit down and find a solution to the issue.
“There are many ways to find a solution, it is time to sit down and find one right now,” he said.
The province also hopes to generate around Rs53.4 billion through its own resources, including provincial tax and non-tax revenues. A further Rs82 billion are expected to come as foreign aid.
Besides, the province hopes to get 151 billion in grants for the tribal areas.
Expenditures
Laying bare the fiscal problems of the province Jhagra said that they had tried to reform the entire budget exercise by reducing the amount of money spent on keeping the wheels of government turning and allocating money in areas where the province needs it most and where it has an advantage.
While presenting a total outlay of the province’s current expenditure at Rs536 billion, Jhagra said that Rs256 billion will be used to pay salaries.
The provincial finance minister said that this was equal to the figure allocated under the same head last year. He explained that they were able to do this by first offering to cut salaries of cabinet ministers by 12%, two per cent more than the step taken by the federal government.
“When it comes to sacrifice for Pakistan, this province and its leadership will be one step ahead,” he said.
Thereafter, he said that senior government officers of the basic pay scale (BPS) grade 20 and above had decided to forego any increase in salary along with civil servants in other positions with significant allowances. A 5% ad-hoc increase had been authorised for civil servants in BPS-17 through BPS-19 while a 10% increase had been allowed for civil and public servants of BPS-16 and below.
Further, Jhagra claimed to have saved Rs20 billion by pushing for increasing the retirement age to 63-years-of age. He dispelled misconceptions that doing so would either affect employee promotions — by realigning promotions to performance — or put a halt to new recruitments —he said that the provincial government aims to recruit some 40,000 people in the next fiscal year.
The finance minister contended that this measure was taken in line with international practices and with regards to the rising life expectancy in the country.
In his budget speech, Jhagra stated that they have introduced simplicity and austerity measures in the budget for developing a sustainable economy and reaching self-sustainability.
He stated that they had allocated extra funds in the areas, where the return to the masses and the provincial government would be of extra nature and special development packages have been included in the current fiscal year.
The provincial finance minister said that his government has set a revenue target of Rs53.4 billion for the fiscal year 2019-20. Noting that their measures had helped raise non-telecom revenues by 49% in the last fiscal, they aim to increase their overall revenue targets to Rs100 billion by 2023, when the tenure of their government ends.
For this purpose, he said that they are broadening the tax base and revamped the tax schedules in line with standards proposed by the United Nations. For this reason, tax rates lower than 15% has been placed on 28 of the 58 taxable services in the province, up from nine services previously.
Expressing reservations on calculations regarding the volume of financial aid from foreign donors, he said that they estimate a total outlay of Rs82 billion.
Development
Further, he said that they have reduced the throw-forward of project timeframe from six years to 3.9 while funds allocated for projects will be not less than 25% of their total cost.
Despite reservations from various corners, he said that they have allocated a record Rs319 billion for development projects in the province. So much so that Rs1.1 billion has been specially allocated for lesser developed districts of the province.
The government has allocated Rs319 for the development projects in the province, including Rs236 billion for development in the settled districts while Rs83 billion have been allocated for the erstwhile federally administered tribal areas (Fata).
Jhagra said that the Khyber-Pakhtunkhwa (K-P) government aims to set aside Rs108 billion for provincial annual development programme while Rs46 billion will be transferred to the local governments. The government also hopes to get Rs82 billion in foreign assistance and loans for development projects in the settled districts.
Published in The Express Tribune, June 19th, 2019.
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