A 417-billion-rupee question

As the IGP agonised over the lack of resources, the Prime Minister asked: Where have the 417-billion-rupees gone?

The people of K-P as well as the rest of the country were shocked at the massive scale of destruction and casualties caused by a terrorist attack that blatantly targeted the police, a mosque, and an area falling in the red zone of Peshawar. Prime Minister Shehbaz Sharif described it as “the most distraught incident” since APS. According to an Al Jazeera report, “This is a highly secure area, but as you see there is no facial recognition, no fingerprint recognition, no ID cards that allow you in or out. It’s just that police stop you, they take a look at you and allow you in.” The IGP of the province threw up his hands in despair, admitting a security lapse.

The Prime Minister wondered why standard things like a safe city project, forensics and DNA labs were not available. As the IGP agonised over the lack of resources, the Prime Minister asked pertinently: Where have the 417-billion-rupees gone? This woke up some leaders of the party that ruled the province for nearly ten years. A former provincial adviser directly concerned with the subject, lamented that the federal government had denied the province its rightful share of resources. The ex-speaker of the National Assembly grumbled about the historic neglect to fully implement the AGN Kazi formula on the net hydel profits. He also complained about the slow disbursement of resources under the FATA development plan and the failure to accommodate the promised share of the merged tribal districts in the next NFC award. Similar noises were made by the former state minister for parliamentary affairs.

These are the usual concerns raised by each K-P finance minister in their budget speeches, whatever the political affiliation. However, what the Prime Minister was talking about was money allocated and fully disbursed, but not utilised for its stated purpose. One of the challengers did mention it but then went on to claim, falsely, that the money was for the rehabilitation of the tribal districts and not for counterterrorism and safety measures. Clause 3(2) of the 7^th NFC award of 2010 states in no uncertain terms: “One percent of the net proceeds of the divisible pool of taxes shall be assigned to Government of Khyber Pakhtunkhwa to meet the expenses of war on terror.” Clause 3(3) makes it clear that vertical distribution formula between the federal government and the provinces applies to 99%. In other words, the federal government and the other three provinces together contributed to the expenses of war on terror (ToT) to be incurred by K-P. While the amounts stated at the time of the budget are projected, the releases are based on actual collection and are made automatically by the State Bank every month as per the formula. There is no federal government involvement in this transfer. To complain that the release is less than projected makes no sense.

The figure of Rs417 billion relates to actual releases from July 1, 2010 to December 31, 2022. From Rs14.6 billion in FY11, the ToT rose to Rs59 billion in FY22. It is budgeted at Rs68.6 billion in FY23. A corresponding increase in police and security spending is not visible. All we see is a belated allocation of half a billion in the current budget for Peshawar safe city. In FY22, a supplementary grant of Rs519.3 million was approved for CCTV cameras and a host of other items. Fresh police recruitment and equipment purchase get Rs4.15 billion. But the 417-billion-rupee question remains.

Published in The Express Tribune, February 10^th, 2023.

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