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ISLAMABAD: Finance Minister of Khyber Pakhtunkhwa Taimur Saleem Jhagra has stated that over Rs120 billion of the Khyber Pakhtunkhwa government has been withheld by the federal government, which creates fiscal constraints for the provincial government.

During an interaction with media, KPK Finance Minister Jhagra said that the federal government has not provided Rs 60 billion on account of net hydel profit and Rs 30 billion current budget for merged districts. Additionally, he said that development budget has only been released Rs 5 billion against the allocation of Rs 53 billion for merged districts.

He said that the way pension bill is increasing; it would be major problems for the provinces and federal government. He said provincial government has taken step of participatory fund in this regard and has also increased early retirement age from 46 years to 55 years. We have also proposed to the federal government to increase the retirement age to 65 years from 50 years as it would lessen the burden of pension bill. He said that KP pension bill is expected to increase to Rs 300 billion from existing Rs 107 billion as the country’s pension bill was increasing 20 to 24 percent.

He said that the federal government has reduced grants for temporarily displaced persons (TDPs) to zero from Rs17 billion.

Additionally, he said that ex-FATA’s budget was reduced after the merger and federal government discontinued Sehat Sahulat Programme for Newly-Merged Districts from June 30, 2022, which is now funded by KPK.

Federal Government’s Sehat Sahulat Programme catered to around one million families in newly-merged districts (NMDs) (excluding Khyber and Bajaur districts), he said, adding that the integrated Sehat Card plus programme includes an annual premium cost of Rs3,000 per family and covers 1.5 million families, including Khyber and Bajaur districts.

The estimated cost of integrated Sehat Card Plus for NMDs is Rs4.5 billion, the minister said and added that federal government reneged on commitment to transfer PSDP funding of Rs5 billion to Khyber-Pakhtunkhwa and indicated that the province should foot the bill for integrating an additional 1.5 million families into its Sehat Card Plus programme.

Development grant initially reduced from Rs54 billion to Rs50 billion, then revised to Rs55 billion after provincial government’s agitation. Only Rs5 billion has been released so far in current fiscal year.

Khyber-Pakhtunkhwa has consistently received less than its due share of federal tax assignment and one per cent war on terror, as per the 7th NFC award Rs25.35 billion against Rs26.37 billion and actual transfer on account tax assignment Rs211.03 billion against share of Rs219.40 billion.

Under 7th NFC award allocated 14.62 per cent share of provincial divisible pool to Khyber-Pakhtunkhwa as well as one per cent grant due to war on terror. The shortfall against due share of total Federal Board of Revenue (FBR) collections amounts to Rs22.43 billion and no amount on account of net hydel profit payment was disbursed to the province since the present coalition government during eight months at the federal level.

He said that non-payment of NHP to Khyber-Pakhtunkhwa has been creating fiscal problems for the province as its arrears has increased to Rs61.216 billion with indexation arrears Rs21.6 billion, arrears of fiscal year Rs11.902 billion and regular NHP for July-November 2022 Rs12.218 billion besides Rs16.638 billion for the remaining period of December-June 2023. He also expressed the apprehension that the FBR revenue collection is growing at 15 per cent to 16 per cent in the current fiscal year against 30 per cent last year may reduce the province's share from divisible pool taxes considerably.

Copyright Business Recorder, 2022


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