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Tuesday March 19, 2024

Austerity measures in KP to continue, cut in development budget likely

By Riaz Khan Daudzai
September 21, 2018

PESHAWAR: The Khyber Pakhtunkhwa government is likely to follow in the footprints of the federal government and continue with the austerity measures that it adopted during the first quarter of the fiscal year.

The austerity drive would continue during the remaining two quarters of the current financial year 2018-19.

The sources in the Finance Department told The News there is an understanding both in the official circles and the ruling political leadership in the province that the austerity measures proposed during the budget for the first quarter of the current financial year need to continue as the PTI-led federal government too has embarked on a campaign of austerity.

The measures will, inter alia, include a complete ban on creation of posts except those required for completing the development projects.

The ban on treatment abroad on provincial government’s expense will also remain in place.

The government would also be asked to go with the ban on purchase of new vehicles except ambulances, earthmoving machinery, fire trucks, tractors, non-luxury police vehicles, single cab-pick-up 4x4 and 4x2, 3 door jeeps, trucks, buses, prisoner vans, motorcycles, water bowser trucks, recovery/rescue vehicles and rescue/lifesaving boats.

Besides, participation in workshops, seminars and training abroad involving provincial funds would be banned during the current fiscal.

According to a document of the Finance Department, the proposed development outlay would also face a cut of around 23 percent. Compared to the last Annual Development Programme (ADP), a lesser amount of Rs48.6 billion would be allocated in the current ADP.

The Pakistan Tehreek-e-Insaf (PTI)-led administration in the province would hardly deviate from the budgetary estimates lined up by the bureaucracy that has already prepared the budget for the current fiscal.

The documents show that the province would spend Rs598 billion during the current financial year including Rs439 billion current expenditures and Rs159.4 billion development outlay.

The province in its current financial year budget has planned to spend Rs253 billion on salaries, Rs60 billion on pensions and Rs126 billion on non-salary expenditures.

The province is spending 27 percent of its budget on development and 73 percent on current expenditures.

It has estimated to spend Rs73.3 billion on provincial ADP projects and Rs29.3 billion on district ADP. Its ADP is also expected to receive Rs56.8 billion for spending on the Foreign Project Assistance (FPA) projects.

In the last fiscal year, it had set aside Rs208 billion for the ADP. However, it was later revised at Rs194.9 billion while it actual ADP stood at Rs117.4 billion at the end of the financial year.

The total budgetary estimates also include Rs198.9 billion approved earlier by the caretaker cabinet for the July-October quarter of the fiscal. The first quarter estimates include Rs53.1 billion development and Rs145.8 billion current expenditures.

The budget projections show that the total revenue would pitch at Rs598 billion, including Rs469.9 billion federal transfers.

The federal transfers will consist of Rs360.5 billion tax assignment, Rs22.3 billion straight transfers and Rs43.3 billion as the war on terror subvention. The province is also likely to receive Rs28.8 billion as Net Hydel Profit (NHP) and another Rs15.0 billion as NHP arrears during 2018-19 fiscal.

The projected provincial tax and non-tax revenue for the fiscal year has been estimated at Rs41 billion, showing a decrease of nine percent over the last financial year province’s own revenue of Rs45 billion.

The overall receipts of the province would also include Rs86.6 billion of capital receipts, recoveries from the Hydel Development Fund (HDF), cash balance savings, domestic borrowings and FPA funds.

The Finance Department has also devised funds release mechanism under which 50 percent funds allocated to ongoing schemes of a sector will be released progressively at the start of the financial year.

Out of the released 50 percent funds, the administrative department will ensure adequate releases to the on-going due for completion schemes and to the schemes pertaining to snow-bound areas (either due for completion or not) through intra-sectoral re-appropriations.

Subsequent releases to each sector will be made on provision of utilization certificate of at least 75 percent of already released funds or justification to be provided by administrative department for non-utilisation/low utilisation on the case-to-case basis.