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June 21, 2021

KP budget

 
June 21, 2021

The Rs1.1 trillion budget that the Khyber Pakhtunkhwa government presented on June 18, 2021 for the next fiscal year, appears to be overwhelmed by its pension and salaries allocations – amounting to Rs466 billion. The government has set the minimum wage at Rs21, 000 while government employees – who were expecting at least a 20 percent raise in their salaries – have received a raise of 10 percent. Surprisingly, the reduction in registration fee for vehicles to a nominal amount of just one rupee is mind-boggling. The government is likely to lose good amounts from this head which could have been used for the benefit of the lowest income stratum which does not own vehicles.

The Rs10 billion basket for providing food to the poor and offering wheat subsidies is a good move, but it needs a high level of transparency in its administration. The provincial government deserves some appreciation for not forgetting the pandemic affected people, as it has earmarked another Rs10 billion for providing succour to businesses and individuals adversely affected by the knock-on effects of Covid-19. But the point of concern remains that just Rs371 billion will be spent on development. It was good to see that the budget session did not experience any untoward incident as happened in the national and Balochistan assemblies. The provincial legislature deserves some praise for their patience and attentive listening when the Minister for Finance delivered his budget speech. This democratic practice other assemblies should also follow as it is of vital importance for the survival of democracy in Pakistan.

The claim by the provincial health minister that the PTI government has provided universal health insurance to all citizens of the province is music to one’s ears but needs substantial evidence to prove its point. A lot depends on the expected receipt of Rs559 billion from the federal divisible pool. The province is also likely to benefit from Rs74 billion from net hydro profit on electricity generated in the province. A disappointing feature is that just Rs75 billion is expected to be generated from the province’s own revenue. The province will also get Rs188 billion from the centre in lieu of federal grants for the merged districts. Overall, the new budget is a mixed bag of bad and good news, and the government must make sure that all its promises are fulfilled.