PESHAWAR: Hamstrung by severe revenue constraints, Khyber Pakhtunkhwa is facing a shortfall of Rs32 billion in the net hydel profit receipts and the deficit is going to rise to Rs52 billion that...
PESHAWAR: Hamstrung by severe revenue constraints, Khyber Pakhtunkhwa is facing a shortfall of Rs32 billion in the net hydel profit (NHP) receipts and the deficit is going to rise to Rs52 billion that would pinch the province at the end of the current fiscal.
Briefing reporters on Wednesday on financial management of the province to meet its budgetary obligations, Secretary Finance Department Shakeel Qadir Khan said the monthly shortfall of the province from the NHP arrears head was Rs8 billion.
Touching upon the revenue situation of the province, Shakeel Qadir pointed out that deposits in the Account-1, the designated account of the province, were Rs24 billion with which the provincial government had to meet its prioritised financial obligations.
He elaborated that the payment of salaries to employees was their first priority and the monthly salary bill of the provincial government came to Rs18 billion.
“We have to defend the salary component. While our second priority is the non-salary expenditures through which the wheel of the whole public affairs is kept running,” he remarked.
He explained the third priority that may bear the brunt of any resource constraint would be the development sector.
“Our major worry is the pension head that has now swollen to Rs53 billion,” Shakeel Qadir said. “We have planned to engage a mechanism to do away with the liberal pension regime that was prone to anomalies,” he maintained.
The secretary Finance added that after the development sector the pension head was the major “cast centre” in the budget.
Flanked by Secretary Information Qaiser Alam, the secretary Finance said at the moment the province was managing its finances well and there would hardly be any issue with the payment of salaries and non-salary expenditure as the Finance Department was regulating it on a daily basis.
However, he said that the point of worry for the financial managers of the province was the shortfall in the inflow of funds on account of NHP arrears that had risen to Rs32 billion in the first quarter of the current fiscal year.
He said the reason for the sluggish inflow of NHP arrears was delay in the disposal of the tariff petitions of the National Electric Power Regulatory Authority (NEPRA) and Central Power Purchasing Agency, which couldn’t be disposed of in time. He added that due to this delay the budget revenue gap had widened to Rs32 billion.
Shakeel Qadir said that initially Khyber Pakhtunkhwa was financially stable compared to other provinces, but this stability stood on weak footings as overall shortfall in the NHP receipts that included Rs16.8 billion of the previous fiscal arrears and Rs35 billion projected in the current budget would come to Rs52 billion. He said this deficit would pinch the province at the end of current financial year.
Shakeel Qadir said that recently they were informed by the Finance Division that an amount of Rs172 billion of the provincial government was deposited in the private banks, which should otherwise have been in the Account-1.
He said the provincial government had been informed that its cash balance would have also been better if the amount was in the Account-1.
He maintained that Rs90 billion of the amount included the pension fund, GPI fund and Hydel Development Fund (HDF), which has been invested in different products.
He said the Finance Department was striving to track down the remaining Rs80 billion. He made it clear that no financial embezzlement had been unearthed in the process so far.
He said the amount was kept in these accounts while profit had been approved on it.
Shakeel Qadir said the number of the designated accounts in the private banks was around 6,500, while in the Bank of Khyber alone 4,500 such accounts had been detected.
He maintained that only through the knowledge of these accounts the government had saved Rs6 billion as some of the departments that had sizeable amount of development funds had placed demands for further funds.
However, he said that they were in a position to predict that how much amount they would retrieve from these accounts.
Shakeel Qadir said that details of the accounts had been retrieved from the State Bank of Pakistan and the amount in these accounts would be discovered fully.