Centre releases some of K-P’s net hydel profit dues

Provincial finance minister says new formula will be presented in next CCI meeting

PESHAWAR: After around five months, the federal government has finally released money owed to the province under the net hydel payment (NHP) dues. However, the full amount was not released and the province has been promised that it will get the balance in the next fiscal year.

This was disclosed by Khyber-Pakhtunkhwa (K-P) Finance Minister Taimur Saleem Jhagra on Monday while addressing a news conference at the K-P Revenue Authority (K-PRA) about the economic performance of the province. He was flanked by the K-P Information Minister Shaukat Ali Yousafzai and K-PRA Director General Tahir Orakzai.

Jhagra said that the centre was due to pay the province Rs50 billion this year under NHP payments. Despite an agreement between the provincial government and the federal government that the latter will release funds in monthly instalments, the government had initially fallen short of the payments. However, he said that the centre has now released Rs40 billion for the province.

The remaining Rs10 billion, however, will be released in the next fiscal year, he said.

“We are looking forward to a permanent solution for the net hydel profit issue,” he said, suggesting that K-P may raise the issue in the next meeting of Council of Common Interests (CCI) to find a permanent solution to the problem.

On the revenue side, Jhagra continued that the province has taken tremendous strides with the revenue authority managing to increase recoveries by 48% — the highest in the country.

“The K-PRA will soon issue its annual report showing the upward revenue growth it achieved in the province,” he said.

This increased revenue means that K-P was able to allocate more money for development projects in the last budget Jhagra said, adding that their allocation of Rs319 billion, which was higher than that of Sindh and slightly less than that of Punjab — the largest province of the country by population.

The provincial finance minister pointed to the better financial management of the province. In this regard, he stated that past provincial governments spent an average of 40% of all available funds on pensions and salaries and this figure had only increased over the past decade. By increasing the retirement age for civil servants from 60-years-of-age to 63-years-of-age, they managed to save around Rs20 billion.

To save a further Rs13 billion, he said that they have increased the early retirement age from 45-years-of-age to 55-years-of-age.

Jhagra, however, refuted reports that they have spent three times the budgeted sum on retirements

“There is no truth to such spending figures, and I urge that the central government increase the retirement age to 63 years for civil servants,” he said.

Furthermore, he said that the budgetary throw-forward for projects had increased to a whopping Rs548 billion in the fiscal year 2018-19. However, they have managed to cut that by Rs203 billion from 6% annually to 3.8%.

Jhagra explained that they did this by increasing project allocation from 8% to 25% which has seen them release Rs79 billion of the Rs108 billion allocated for the Annual Development Programme (ADP) for the fiscal year 2019-20.

Addressing concerns over the increase in retirement age and its impacts on
fresh hiring’s, Jhagra said that the provincial government has announced plans to hire as many as 30,000 people.

On the expenditure front, he said that project allocations in the next financial year will be made given the performance of each department while projects will be prioritised based on their need. This will be outlined in a comprehensive development plan submitted to the departments and districts.

Jhagra also made a case for K-P to get a larger slice of the National Finance Commission (NFC) award given that the erstwhile federally administered tribal areas (Fata) have also been merged with the province and its overall population has swelled.

“The new NFC Award …should be based on the new census report and should increase,” the finance minister said.

Moreover, he said that the executive allowances of cabinet members will also be tied to their efficiency. The CM’s directorate has also been eliminated, contributing to savings of the province.

When asked about increasing the allowances of the secretariat from 30% to 50%, Jhagra replied in the affirmative.

Commenting on the anger of some lawmakers from the treasury benches, he stated that it only proves that the provincial finance department is on the right track.

“Federal Finance Minister Abdul Hafeez Shaikh also does not compromise on his tasks and he also says "no" to the demands of treasury members,” Jhagra countered. 

Published in The Express Tribune, December 10^th, 2019.