K-P pre-empts Centre to unveils surplus budget

Pays, pensions up; property tax down; roads, dams, power houses included in development projects

PESHAWAR:

Breaking from parliamentary tradition, the Khyber-Pakhtunkhwa (K-P) government has presented a surplus budget for the upcoming fiscal year in the provincial assembly, even before the announcement of the federal budget, a move unprecedented in the country's history.

Finance Minister Aftab Alam unveiled the Rs1,754 billion budget for fiscal 2024-25 [July-June], boasting a surplus of Rs100 billion. Additionally, a supplementary budget of Rs2.9 billion was presented for the outgoing fiscal year 2023-24.

The budget forecasts provincial revenues at Rs1,754 billion and expenditures at Rs1,654 billion. Notable allocations include Rs416.3 billion for the Annual Development Programme (ADP), a 10% increase in salaries and pensions, and a minimum wage raise to Rs36,000 per month.

Minister Alam emphasized the budget's emphasis on social protection, peace, employment opportunities, and economic development, aligning with Chief Minister Ali Amin Gandapur's directives.

For the upcoming fiscal year, the province anticipates Rs1,212.036 billion from the federal government, comprising Rs902.5 billion under the National Finance Commission (NFC) Award and 1% of the divisible pool on the war on terror, alongside royalties, surcharges on oil and gas, and net hydel profits.

Additionally, Rs31.55 billion will be generated through other receipts, with Rs259.92 billion from merged districts, Rs130.59 billion from foreign projects assistance, and Rs26.41 billion in development and non-development grants under the federal Public Sector Development Programme (PSDP).

To enhance the tax net without increasing taxes, the government has implemented reforms in sales tax, property tax, tobacco tax, and cess, among others.

“The government has decided to improve the tax net instead of increasing the taxes, and for that purpose, several steps have been taken, including reforms in sales tax, property tax, tobacco tax, cess and other taxes,” Alam said.

The government decreased sales tax ratio on different online services, including the tax on hotels from 8 to 6 %, binding them to use Restaurant Invoice Management System. Similarly, a fixed sales tax rate has been proposed for wedding halls.

Under the property tax head, the amount on per-kanal for factories has been reduced from Rs13,600 to 10,000, tax on commercial property reduced from 16% of the monthly rent to 10%, and 5% for private businesses related to the health sector, and provincial tax on transfer of properties cut from 6.5 to 3.5%.

The government earmarked Rs362.7 billion for the education sector, including Rs35.8billion for higher education and Rs326.9billion for elementary and secondary education; Rs12billion for Ehsas Noujawan, Ehsas Rozgar and Ehsas Hunar programmes to provide opportunities to 100,000 youth.

Rs10 billion was earmarked for Chashma Right Bank Canal project to bring 300,000 acre of barren land under cultivation; Rs228.8 billion for health sector; Rs140.6 billion for peace and order; Rs60.5billion for roads and infrastructure, Rs8.1 billion for social welfare; Rs2billion for minerals, Rs7.5 billion for industry, Rs9.6 billion for tourism, Rs28.6 billion for agriculture, and Rs30.8 billion for energy sector.

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The current expenditure for the settled districts for the fiscal year 2024-25 was estimated Rs1,093.087 billion, and Rs144.62 billion for the merged districts. The development expenditures amounted to Rs416.3 billion for both settled and merged districts.

The development expenditure included Rs120 billion for the provincial ADP, Rs24 billion for district ADP, Rs36 billion for merged districts ADP, Rs79.29 billion for Accelerated Implementation programme (AIP), Rs130.59 billion for foreign project assistance and Rs26.41 billion for federal PSDP.

Presenting the budget, the finance minister said that 5,000 new houses would be constructed under the Ehsas Own House Programme, for which Rs3 billion had been allocated. He announced the launching of the Tank, Chodran and Daraban dams.

The also announced the construction of the Dir-Dera I Khan Motorway under the public private partnership mode, construction of road to link Dera Ismail Khan with Hakla Motorway and 470 megawatt Lower Spat Gah project.

The minister stated that a 911 initiative was being launched in the home affairs department with an allocation of Rs8.11 billion. The project of Heritage Field School and Tourism Helpline 1422 is also being initated, while 235 megawatt Battakundi-Naran Hydropower Project was being started in Mansehra.

The government allocated Rs14.05 billion for the forest sector. Under the Green K-P policy, the Billion Tree Plus project was being launched, in which the national park demarcation and wildlife protection projects would be included.

“The budget 2024-25 is not just a budget document rather it is a roadmap for the development and prosperity of the province and reflection of the government's strong resolve to uphold social justice, gender equality,” the minister said.

There is a tradition in Pakistan that provincial budgets are presented after the federal budget. However, it was for the first time in the history of the country that a provincial government budget preceded the federal budget.

“The Khyber Pakhtunkhwa government’s budget is a violation of the Constitution, the spirit of the Federation of Pakistan and the established procedure,” Federal Minister for Kashmir Affairs Amir Maqam said, while commenting on the K-P budget announcement.

“The sources of income have not been determined, yet the budget has been made. The [K-P] budget is based on expectations, devoid of any solid planning, economic strategy and public welfare and relief. Presenting budget before the federal budget is unrealistic and just a political stunt,” he added.

Maqam criticised the Pakistan Tehreek-e-Insaf (PTI) government, which had started its third term in the province, saying that the PTI made K-P the most indebted province of Pakistan in 10 years. He warned that such move could harm the federation.

(WITH INPUT FROM APP)