KP budget

The Khyber Pakthunkhwa government has announced its budget for the financial year 2019-2020. With former Fata now integrated in the province, KP Finance Minister Taimur Saleem Khan Jhagra did not miss the opportunity to note that this was a historic budget for the ‘new Pakhtunkhwa.’ The total budget will be Rs900 billion, with a development outlay of Rs236 billion. Much like the Sindh and Punjab budgets, it expects a surplus revenue of Rs45 billion. This has allowed the KP government space to propose a 10 percent ad-hoc relief allowance for low-grade provincial employees. It has also reduced the salaries of the chief minister and cabinet by 12 percent – in its commitment to austerity. Pensioners will get a 10 percent increase and the minimum wage has been increased in accordance with that in other provinces. The finance minister has said that the budget has managed to control government expenses and increase revenue, and has also noted that the budget includes a special package for the merged tribal districts, which will get around Rs162 billion of the overall outlay.

What is interesting is that the development outlay of Rs319 billion is just slightly lower than Punjab’s Rs350 billion and Rs34 billion higher than Sindh. Given that both of those provinces have much higher populations, the development outlay for KP is certainly remarkable, especially as a percentage of the total budget. KP’s budget is much less than the other two provinces, but it has managed to allocate a much larger percentage for development schemes. Whether it will be spent or not remains to be seen, but it is certainly ambitious. The minister has also said that the KP government had made an additional Rs95 billion available for development through cutting the cost of running government departments. This is a significant amount that is a credit to the KP government. The cabinet has, controversially, proposed to increase the retirement age to 63 as well as early retirement to 25 years of service. This will be a space to watch, but the KP government claims the move will save Rs20 billion per year. Moreover, the KP government insists that cutting government running costs will not come at the cost of a freeze on hiring. If anything, the provincial government expects to hire 47,000 new staff in the next year from both the 'settled' and tribal districts. The government is also planning an ambitious programme to recruit graduates from universities as teachers as government school teachers as well as promote Green Growth. On paper, the KP government seems to have has outdone its bigger provincial partners.