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ISLAMABAD: Provincial government of Khyber Pakhtunkhwa said on Sunday that it may not be in a position to create surplus budget of Rs 116 billion because federal government has reduced development and current budget for FATA district and consequently the province would have to bear the cost.

This was stated by provincial Finance Minister of KP Taimour Khan Jhagra while addressing a press conference along with Kamran Bangish Minister for Higher Education Commission on Sunday.

Finance Minister said that the province budget would be in deficit by Rs 100 billion following Rs 24 billion reduction in current and Rs 10 billion in development budget of the FATA districts by the federal government, besides pending arrears of Rs 60 billion of NHP.

He further stated that the federal government has discontinued Rs 5 billion allocation of Sehat cards for FATA districts from July 1 2022. The federal government wanted the province to create a surplus of Rs 117 billion for the current fiscal year as part of Rs 800 billion when its own budget would be in deficit by Rs 100 billion if the federal government does not resolve these issues.

“We wanted to be in a position to sign MoU with the federal government because agreement with international monetary fund (IMF) is important for the country but for that federal government has to resolve five to six big issues of the province.

He questioned that how the provincial government can create surplus budget if these issues of Rs 60 billion arrears of NHP, Rs 25 billion current expenses of FATA districts, as well as, Rs 5 billion for Sehat Cards coverage are not resolved. Otherwise, he said that the provincial government has to pick up these expenses from its own budget which means its budget would be in deficit by Rs 100 billion.

KP govt presents Rs1,332bn budget

Jhagra said that the provincial government wanted to work with the federal government on budget surplus and other conditionalities of the IMF programme and a letter was also written to the federal Finance Minister Miftah Ismail on June 29 2022 in this regard but did not receive any response.

He said that discontinuation of Rs 5 billion Sehat Cards unilaterally by the federal government for the people of FATA districts was illegal because in PC-I people of FATA are included and it was also agreed by the former finance Shaukat Tarin that funds for Sehat cards would be transferred.

He said that the provincial government was not getting any allocations from the NFC for FATA districts and if the federal government wanted the provincial government to take responsibility of anything it has to provide funds for it as well until the new NFC Award.

He said that federal government share in development budget for FATA district was reduced when there was 20 percent increase in federal divisible pool resources and current budget for running of hospitals and schools in tribal areas was slashed from Rs 77 billion to Rs 60 billion when the federal governed increase salary bill of the federal government salary bill was increased from Rs785 billion to Rs 954 billion and pension Rs 480 to Rs 609 billion.

He deplored that on one hand the federal government does not have Rs 20 billion for current budget FATA districts and Rs 5 billion for Sehat cards while on the other it increased salary and pension bill of federal government by Rs 300 billion.

Copyright Business Recorder, 2022

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