K-P, Balochistan budgets

Khyber-Pakhtunkhwa and Balochistan have both announced their budgets, and as expected, there has been significant belt-tightening brought on by the economic impact of Covid -19 and other revenue issues.

In K-P, the development budget declined by 0.3% from last year to Rs318 billion. However, that does not account for the fact that, due to the cash crunch, actual spending this year was Rs98.5billion less than budgeted. Interestingly, almost Rs86 billion of the development allocation for next year is foreign-funded. Of the total, around Rs39 billion in development funding is for education, including Rs30.2 billion for elementary and secondary schools. This is a credible investment in tough times — 300 new schools will be built, and 1,700-plus will see upgradation or uplift work. There is also work under way to improve the monitoring of schools with around 3,000 assistant-sub divisional education officers to be recruited to supervise government schools. Currently, one ASDEO monitors about 60 schools, which the government hopes to bring down to a more realistic eight-to-one ratio. Another Rs24 billion has been marked for health in the development budget, apart from a Rs18 billion allocation for water.

Balochistan, meanwhile, unveiled a Rs465.528 billion budget, with a deficit of Rs87 billion. Despite all of the factors, that 18% budget deficit is eye-catching. Realistically, it is hard to believe that at this time next year, the government will have gone ahead with such a large deficit. Remember, the federal government has already cut Balochistan’s allocation by around 10%, and this figure could well rise. Also, we worry that the eventual subjects of cuts would likely be the usual suspects — health and education. The provincial education budget is Rs64 billion, while health has gotten Rs38 billion. Only Rs118 billion will be spent on development expenditure, another figure where actual spending will likely be curtailed as the year progresses. Around Rs8 billion has been earmarked for coronavirus and other disaster response, and another Rs3 billion for the post-coronavirus relief programme.

While both provinces have put out ambitious budgets with well-intentioned investments in critical sectors, K-P’s seems to be more realistic, given the expectations of budget cuts.

Published in The Express Tribune, June 23^rd, 2020.

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