As financial mismanagement of Azad Jammu and Kashmir Council –the highest linking forum between Pakistan and AJK, brings the state government to its knees, the federal government has decided to release funds immediately to the cash-starved state government.
The government of Azad Jammu and Kashmir (AJK), which is largely dependent on the federal government for running its financial affairs, is facing a deep financial crunch.
The federal government was scheduled to pay the AJK government Rs20.4 billion for the current fiscal year 2013-14 in Rs1.7 billion equal monthly tranches. The state government was hoping to acquire the entire sum of Rs1.7 billion in advance for the current month.
The Ministry of Finance has agreed to release Rs850 million in advance before August 15, according to a senior official at the ministry.
In a meeting with Finance Minister Senator Ishaq Dar here on Tuesday, Prime Minister AJK Chaudhry Abdul Majeed sought the immediate release of Rs1.7 billion for salaries of government employees and day to day affairs of the government.
In addition to the Rs20.4 billion, the AJK Council has also sought Rs3 billion in grants to meet development expenditures. According to officials, the AJK Council has withheld AJK government revenues for last many months, creating problems for the state government.
The state revenues are deposited in the AJK Council account, which transfers 80% of the deposits to the state government while retaining the rest of the sum.
The increasing role of the AJK Council in the affairs of the state and its decision to even initiate the development projects is creating problems for the state government, the officials added.
The AJK Council is headed by the Prime Minister of Pakistan with the Prime Minister of AJK as its vice-chairman. Five federal ministers and six elected members of the AJK Assembly are the members of the AJK Council.
According to a statement by the Finance Ministry, prime minister AJK apprised the finance minister that AJK was facing a financial crunch and needed immediate financial assistance.
The finance minister said that the federal government was conscious of the difficulties being faced by the people of AJK and approved the release of Rs850 million as an advance to AJK. If the financial difficulties continued, the federal government would release the remaining Rs850 million, the officials said.
Senator Ishaq Dar said that the present government was striving hard to reset the economy so that it can be put on a path of sustainable growth.
The federal government transfers about two-third of its tax revenues to provinces and special areas including AJK, Gilgit-Baltistan and the Federally Administrated Tribal Areas. This leaves it with only a third of the revenues to meet expenditures on defense, debt servicing and running its own affairs.
The AJK Prime Minister Chaudhry Abdul Majeed said was that he was fully conscious of the financial constraints being faced by the government of Pakistan and supported the initiatives taken by the PML-N government to stabilise the economy.
Published in The Express Tribune, August 14th, 2013.
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