K-P faces daunting task of budget making

Govt expected to announce a six-month budget

PESHAWAR:

The Khyber-Pakhtunkhwa (K-P) government is facing significant challenges in finalizing the upcoming fiscal budget due to severe financial constraints.

Official sources told The Express Tribune that despite repeated attempts to approach the federal government for assistance, no progress has been made, leaving the provincial government with no choice but to delay the budget until after the federal budget announcement.

Officials reveal that the K-P government is grappling with dire financial hardship, with the federal government owing an estimated Rs150 to 200 billion.

Despite discussions during the prime minister’s visit to Peshawar and meetings with federal finance officials, no positive outcomes have emerged.

Reluctance from the federal government to provide the outstanding dues has left the provincial government in limbo, making it impossible to commence work on the next fiscal budget.

While an initial sketch of the budget exists, the lack of clarity regarding resources from the federal government poses a significant challenge.

The provincial budget will be dependent on federal receipts, leaving officials in the dark about the extent of financial support they can expect. Consequently, the caretaker provincial government is currently planning a four-month administrative budget, with drafts also being prepared for six-month and one-year budgets. This contingency allows the government to continue functioning if elections are delayed.

The K-P budget for the fiscal year 2023-24 is projected to be Rs1,500 billion, marking an increase from the previous year’s Rs1,332 billion.

However, due to limited available resources, it is expected that the caretaker government will initially allocate a smaller four or six-month budget, estimated at around Rs500 to Rs600 billion.

The province anticipates receiving Rs800 billion from the federal government under the federal tax assignment, but the allocation of Rs100 billion for development and Rs24 billion for tribal districts remains uncertain given the financial crisis.

Crisis background

Caretaker Chief Minister Muhammad Azam Khan has repeatedly expressed his unwavering commitment to overcoming the prevailing financial crisis in the province.

He emphasized that the provincial government is making extensive efforts to address the situation effectively. Chief Minister Khan highlighted that K-P is currently facing a significant financial burden, with substantial outstanding dues owed by the federal government through various federal transfers.

These dues amount to billions of rupees, further complicating the financial challenges faced by the province. In light of this, the provincial government is actively engaging with the federal authorities to resolve these outstanding financial obligations.

The CM observed that the erstwhile Fata had been merged into K-P but the share of newly merged districts in NFC was never provided.

“In order to resolve the financial issues of the province, a number of letters have been sent to the prime minister and federal finance minister,” he shared.

He said that he had requested the political leaders in a joint session the other day for their cooperation to get the legitimate rights of the province.

 

Published in The Express Tribune, June 5^th, 2023.