With budget cuts, UoP runs into financial troubles

Varsity officials say high pension bill has forced them to take loans from banks to pay salaries

PESHAWAR: One of the oldest universities of the province today faces an unprecedented financial crisis owing to a cut in funding from the higher education body, and it now finds itself in a position where it cannot even release the full salaries of its employees.

To bridge the shortfall, the varsity’s administration has had to take loans from local banks to pay its employees.

A financial report of the varsity available with The Express Tribune showed that in the budget for the fiscal year 2019-20, both, the Higher Education Commission (HEC) and the provincial government had placed cuts on grants for the University of Peshawar (UoP). As a result, the varsity had put all development projects on hold while it struggled to even pay salaries.

The HEC had asked the federal government to provide it with Rs103.5 billion for education-related programmes in the country. Instead, the federal government only approved Rs59 billion, just over half of the grants demanded. As a result, the body has had to cut grants it provides to universities to manage the meager budget.

Similarly, the provincial government also slashed funds for higher education institutions in the province, in part due to the larger number of varsities it now has to balance on its books. According to the Khyber-Pakhtunkhwa (K-P) government budget documents, the government had allocated some Rs13.93 billion for the higher education sector in the fiscal year 2018-19 but released only Rs10.56 billion. It has, however, allocated a slightly lower sum of Rs13.89 billion for the fiscal year 2019-20.

University administration sources confirmed that after the cuts in grants, the varsity had run up a budget deficit of Rs700 million. Asked about the major expenditures of the varsity, he said that more than two-thirds of their budget goes into paying pension of retired employees.

“We were expecting some Rs1.4 billion from HEC but were only provided Rs1.2 billion, a deficit of Rs155 million last year,” the source said.

He explained that their expenditure on providing pensions to some 1,500 employees was Rs1.094 billion.

“Out of the 1,500 pensioners, we are catering to some 262 pensioners from the Islamia College, who should be given back to the college as they have also been granted the status of a university,” the official said.

UoP Spokesperson Ali Imran confirmed that the varsity was currently facing a major financial crisis. He added that they have communicated this issue to the relevant officials in the provincial government.

Published in The Express Tribune, August 3^rd, 2019.