AIRLINK 74.75 Increased By ▲ 0.46 (0.62%)
BOP 4.97 Increased By ▲ 0.02 (0.4%)
CNERGY 4.34 Decreased By ▼ -0.03 (-0.69%)
DFML 39.75 Increased By ▲ 0.95 (2.45%)
DGKC 85.80 Increased By ▲ 0.98 (1.16%)
FCCL 21.25 Increased By ▲ 0.04 (0.19%)
FFBL 34.17 Increased By ▲ 0.05 (0.15%)
FFL 9.66 Decreased By ▼ -0.04 (-0.41%)
GGL 10.40 Decreased By ▼ -0.02 (-0.19%)
HBL 113.59 Increased By ▲ 0.59 (0.52%)
HUBC 137.12 Increased By ▲ 0.92 (0.68%)
HUMNL 11.60 Decreased By ▼ -0.30 (-2.52%)
KEL 4.83 Increased By ▲ 0.12 (2.55%)
KOSM 4.62 Increased By ▲ 0.18 (4.05%)
MLCF 37.75 Increased By ▲ 0.10 (0.27%)
OGDC 139.65 Increased By ▲ 3.45 (2.53%)
PAEL 25.43 Increased By ▲ 0.33 (1.31%)
PIAA 20.68 Increased By ▲ 1.44 (7.48%)
PIBTL 6.60 Decreased By ▼ -0.11 (-1.64%)
PPL 122.50 Increased By ▲ 0.40 (0.33%)
PRL 26.60 Decreased By ▼ -0.05 (-0.19%)
PTC 13.98 Increased By ▲ 0.05 (0.36%)
SEARL 58.33 Increased By ▲ 1.11 (1.94%)
SNGP 67.15 Decreased By ▼ -0.45 (-0.67%)
SSGC 10.26 Increased By ▲ 0.01 (0.1%)
TELE 8.46 Increased By ▲ 0.06 (0.71%)
TPLP 11.12 Decreased By ▼ -0.01 (-0.09%)
TRG 64.45 Increased By ▲ 1.64 (2.61%)
UNITY 26.55 Increased By ▲ 0.05 (0.19%)
WTL 1.45 Increased By ▲ 0.10 (7.41%)
BR100 7,842 Increased By 31.5 (0.4%)
BR30 25,366 Increased By 216.4 (0.86%)
KSE100 75,138 Increased By 181.3 (0.24%)
KSE30 24,164 Increased By 80.9 (0.34%)

PESHAWAR: The government of Khyber Pakhtunkhwa is considering using salaries, pensions, non-salary and development expenditure’s fund for overdraft purposes, says White Paper on KP budget for fiscal year 2022-23.

It says that KP Government has four accounts in State Bank of Pakistan for its operation. These are Account-I i.e., the provincial level account, Account-II used for state trading and food, Account-III used for Zakat and Account IV used for district level.

Account-I is the main account used to pay salaries, pensions, non-salary and development expenditure. For the purposes of accounting, State Bank of Pakistan considers the balance of Account-I and Account-IV for overdraft purposes. Whenever the combined balance of Account-I and Account-IV reaches zero, State Bank of Pakistan provides the government with ways and means advance to continue its operations. This financing facility is charged with an interest by the central bank.

In this connection, Finance Department has started consultations with the State Bank of Pakistan to consider Account-II balance for overdraft purposes as it is government money. This account has on average Rs 11 billion at any moment through the financial year. Accounting for this money can greatly boost the cash cover available with the government and help to prevent more than Rs 100 million in overdraft charges. However, if the State Bank of Pakistan disapproves of this consolidation of funds, then the government of Khyber Pakhtunkhwa will move these funds to a commercial account for profit generation.

The provincial government has also introduced a Project Implementation Policy with the governance paradigm of the country and its provinces to create fiscal and functional spaces for any executing agency (Line Department, or otherwise), to implement intervention in a more direct and focused manner. Over the years, projects have also seen an organic evolution. From standard brick-and-mortar projects, aimed at construction or infrastructure, to service-delivery oriented projects; there is a visible cognitive shift in understanding how projects can be used more optimally for achieving development outcomes. However, the existing Project Implementation Policy just focused on the human resource without enabling clauses for crucial project management elements such as market-based hiring, financial, asset and procurement management, project appraisal and establishment of a project management unit.

This proposed Project Implementation Policy is envisaged as an enabling instrument that sheds light on all the management, procurement and appraisal related aspects of the project. It also encompasses competitive hiring in human resource management and hence, allows much more flexibility than the existing and redundant project implementation policy. Ultimately, the policy aims to support projects as high impact development tools, as opposed to financial burdens for their sponsoring or executing agencies.

The Designated Accounts (DAs) are various accounts of the KP Government, carrying over Rs.100 billion, of the provincial government in commercial banks and hence, significantly lowering the working capital available at the disposal of the Finance Department at any moment during the fiscal year.

The government of Khyber Pakhtunkhwa has been meticulously working on analyzing the current fiscal space and designated accounts. After several sessions of consultations and analysis conducted by the Finance Department and the Internal Support Unit, a significant amount was highlighted in lying around Das and mechanism was devised to bring this money under the umbrella of the Finance Department through unification of Treasury Single Account-I and Treasury Account-II.

The cabinet of Khyber Pakhtunkhwa government has approved Cash Management Policy and Framework 2020 during January 2021. Under this policy, the Designated Accounts supported through the funds allocated in the provincial budget shall be closed, and the balances parked in these accounts shall be transferred back to Treasury Single Account (TSA-I). The Designated Accounts maintained by the Departments through own source revenue shall be consolidated in TSA-II.

So far , the Cash Balances in Government Bank Accounts (Account 1, 2, 3, & 4) in SBP are consolidated on daily basis and large number of Designated Accounts supported through Provincial Budgetary Funds are being closed and converted on Asaan Assignment Accounts. Similarly, a policy of operations of Das required for operational reasons is developed and circulated by the Finance Department. The outflow of funds from SBP accounts are restricted to minimum, except those supported by various Acts of the Provincial Assembly.

A computerized system for online reporting and cash forecasting is developed by KPRMP, which will be implemented during 2022-23 while the issue of monthly fortnightly and daily consolidation of balances of Das by SBP is in progress.

Copyright Business Recorder, 2022


Comments are closed.