K-P budget to conform to IMF requirement

Global money lender had set condition of surplus provincial budgets last year

PESHAWAR:

Khyber-Pakhtunkhwa (K-P) government has signed an agreement to keep the provincial budget surplus for the next fiscal year in lien with the IMF requirements.

As per the agreement the budget will be Rs95 billion surplus.

Sources told The Express Tribune that caretaker government has already started work on the four-month budget and a proposal of exempting tribal districts tax-free for another two years is also under consideration. The final decision will be taken by the caretaker cabinet.

There will be no new tax in the provincial budget and fresh recruitments, sale and purchase of new vehicles for the government departments, and renovation and beautification of the official residences will remain banned.

“The total size of the four-month budget is expected to be at Rs550 to 600 billion while the size of the annul development budget (ADP) will be Rs268. The ADP funds will be only allocated for the ongoing projects,” said an official of the finance department, adding the provincial government employees will also get a raise in salaries as well as pensions.

It may be mentioned here that the IMF had set a condition last year that the provincial budgets will be kept surplus and this condition will be fulfilled this year too.

The caretaker provincial cabinet reviewed the IMF condition and approved it during its June 8 meeting.

The agreement has been sent to the federal government. As per the agreement the caretaker government is bound to keep the next fiscal budget Rs95 billion surplus. Last year the PTI government in K-P also approved the agreement it as a result the budget was Rs117 billion surplus.

Experts questioned the logic behind presenting a surplus budget in the face of Rs200 billion deficit the province is facing.

Talking to the journalists, Advisor to CM on Finance, Himayatullah said that the government is seriously considering the proposal of exempting ex-Fata and Pata from taxes for another two years.

Previously these areas had been exempted from taxes for five years under section 5 of 25th amendments.

Published in The Express Tribune, June 11^th, 2023.