Financial crisis threatens K-P universities

Report shows that budgets of Rs6.56b in 2021-22 were slashed to Rs4.74b in 2023-24.

PESHAWAR:

Higher education is a rich cultural and scientific asset that prepares students for future challenges besides promoting economic, technological, and social change in society.

Despite the enormous significance of higher education in the country’s socioeconomic development, the majority of public sector universities in Khyber-Pakhtunkhwa (K-P) were currently facing a financial crisis, which adversely affected the process of learning and research studies, besides negatively impacting students’ enrolment in MS, MPhil, and PhD programmes in the province.

Out of the total 34 public sector universities, including 24 general and 10 specialised in engineering, technology, agriculture, medical, animal husbandry, and management sciences, seven public sector universities, including UET Peshawar, Gomal University DI Khan, Agriculture University Peshawar, University of Science and Technology Bannu, Shaheed Benazir Bhutto University Peshawar, and University of Shangla, were facing a significant financial crunch due to pension liabilities and depleting budget balances.

The K-P Universities 2021-24 Report has revealed that the initial balances of budgets of 34 public sector universities and HEI’s, which were Rs6,560 million in 2021-22, decreased to Rs5,316 million in 2022-23 and were further slashed to Rs4,740 million in 2023-24.

Read Punjab, K-P risk ‘financial shutdown’

The decrease in the opening balance budgets of these universities has not only created serious financial challenges but has also encompassed financial fluctuations and economic stagnation for research studies, salaries, and pensions.

During the last three years, the provincial grant to public sector universities, which was Rs3,962 million in 2022-23, was slashed to Rs3,276.125 million during 2023-24, and only Rs1,231.897 million was recorded during 2021-22.

The financial crisis in most universities has been further deepened after non-payment of the promised annual provincial grants of Rs3,000 million, negatively impacting the universities’ abilities to maintain infrastructure, support academic programmes, research studies, and ensure quality in education disciplines.

However, the federal grants to K-P universities had witnessed substantial growth; Rs10.13 billion in 2021-22, Rs10.91 billion in 2022-23, and Rs10.95 billion in 2023-24. But 18 universities in K-P have faced a decrease in federal grants during 2022-23 and 2023-24.

Similarly, no provincial grant was received by University of Agriculture Peshawar in 2021-22 and 2023-24, University of Buner and UET Peshawar during the current fiscal year. Moreover, University of Engineering and Applied Sciences Swat, University of Chitral, Abdul Wali Khan University Mardan, Institute of Applied Sciences and Technology Haripur, and Gomal University DI Khan had received no provincial grants during 2021-22.

Despite the provision of Rs20 billion in grants to old universities, the situation was still dismal, and regular support from the HEC was imperative to stand the recently established universities on their own feet in K-P.

In the last three years, the annual receipts of these universities were Rs46 billion, while annual expenditures remained Rs41 billion. Despite reforms and interventions, K-P’s universities saw only modest revenue growth of Rs7 billion in 2021 and Rs2 billion in 2022, thus falling short of the mandatory progressive targets.

“The poor health of the majority of universities was exposed by the report needs the attention of all stakeholders,” said Professor Dr Muhammad Naeem, former Chairman Economics Department, University of Peshawar.

He said 20 out of 34 universities were likely to face budget deficits at the close of the current financial year while 27 universities allocated over 50% of their budgets to establishment expenditures, needing realignment of priorities on a war footing basis.

“The opening of new universities in far-flung areas for political purposes has negatively impacted research studies besides MS/MPhil and PhD programmes.”

“Closure of financially unstable universities was no solution to problems rather the government needs to divert financial resources to strengthen it,” he said. “The main duties of universities are to conduct research. However, the poor allocation is hampering research works at most new universities,” he said, adding in fiscal year 2023-24, the total expenditure of all 34 universities reached Rs41 billion against which only Rs1 billion was earmarked for research initiatives, which was like salt in flour.”

Published in The Express Tribune, October 8^th, 2023.

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