Of all the provincial budgets, KPKs was the most waited. It was a bit of anti-climax that the senior minister who belongs to the coalition partner Jamaat-e-Islami, presented the budget instead of a PTI face - yet the speech sounded coming straight from the PTIs economic team.
The KPK budget received good press largely, but it was not without a few shortcoming and disappointments. The PTI-led coalition disappointed especially on the taxation front, contrary to its earlier claims of increasing dependence on direct taxation and yielding higher tax from agriculture income. Though, the agriculture sector in KPK pales in comparison to those of Punjab and Sindh, it should surely yield more than a mere Rs22 million targeted for FY13.
That said the government has ensured speedy documentation of agriculture land records to be completed within six months. The budget White Paper also mentions the agriculture income tax target to be in line with the concerned authoritys potential - the KPK government needs to up the ante. Surely, an over dependence on indirect taxes - as high as 83 percent - is not what the PTI had promised and envisioned.
The pleasantries - all of them are on the expenditure side, with education and health sectors leading the way. The PTI has stayed true to its words in this regard declaring education and health emergency in the province, budgeting substantial amount for the social welfare.
But the numbers are to be analysed carefully, as a smart change in accounting standards makes the education budget look six times fatter. In essence, the bulk of Rs72.6 billion budgeted for education under the current revenue expenditure, is the salary expense, which was previously treated under a separate head of account.
Be that as it may, there is growth and a really impressive one as development spending on education has doubled to nearly Rs30 billion. Not only is this unprecedented in the provinces history, it even compares to the development education budget of the big brother Punjab.
To put it into perspective, Punjabs development education budget is just Rs2 billion more than KPKs. Total development spending on health and education in KPK is a healthy 48 percent of the Annual Development Plan - speaking volumes of PTIs priorities. Special programmes have been announced for women on both education and health fronts, and adequate amount has been budgeted.
While the KPK government seems to have done wonderfully well on the social side, it would still remain dependent on materialization of foreign assistance. The revised budget estimates for FY13 reveal a shortfall of Rs24 billion from the budgeted foreign assistance, which was the chief reason why the province made a deficit of Rs36 billion.
For spending on education and health to reach the desired level and for the budget to be in surplus, the foreign assistance must materialise. If it does not happen, it should be learnt the hard way of increasing the provincial revenue generation capacity.
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KPK Budget - key numbers
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Revenues
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Rs (bn) 2013-14 B 2012-13 R
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Federal Tax assignment 198 161
War on terror receipt 24 19
Straight transfers 27 20
GST on Services 6 4
Provincial receipts 9 8
Arrears on hydel 25 25
Foreign projects assistance 35 11
Total Revenues 344 261
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Expenditure
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Rs (bn) 2013-14 B 2012-13 R
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General Public service 60 126
Public order & safety 30 30
Economic Affairs 18 12
Health 19 8
Education 73 11
ADP 83 72
Foreign project assistance 35 11
Total expenditure 344 297
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Source: KPK Budget Document
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