The provincial government of Khyber Pakhtunkhwa has decided to bring the throw-forward of development schemes during the current financial year 2019-20 to 4 years. The development situation inherited by the new government had a throw-forward of more than 6.5 years, said the White Paper KP Budget for the financial year 2019-20.
The exercise was done with a view that the current review will also be done in each of successive budgets from the current financial year onward. Some of the work will require year-round engagement with Planning & Development (P&D) Department as well as line departments to make sure that development priorities of the government are funded unto completion in the current tenure.
Both Finance and P&D Departments were at the forefront of this effort and issued four key considerations, that from observation had not been adhered to in the recent past, and that were at the core of the final approval process of 2019-20 budget. The considerations are included the reduction in throw-forward for the existing development portfolio had to be maintained ideally at 3 years, and at no more than 4 years at any cost.
The new proposed portfolio of departments was also checked to ensure to be three years, with a one-third to one-fourth allocation. The impact of the new proposed projects was judged against at least three key questions. (a) Does the project impact the lives of the public or Pakhtunkhwa, or does it make a tangible contribution to the economic development of the province? (b) Does the allocation (at least 25% of the overall cost of the project) to be project reflect its stated importance? (c) Is this the best possible mode of delivery, and does it set the right precedents?
The fourth consideration was that while finalizing the development budget, departments also justified that they are adequately funding existing assets, before building new ones.
As result of this exercise, and overall fiscal reforms of the current government, the 2019-20 budget boasts a record development budget of Rs 319 billion, out of which Rs 83 billion is for tribal districts, Rs 154 billion is for settled districts and Rs 82 billion is Foreign Project Assistance.
In addition to this, the mix of allocation for ongoing VS/new projects has also shifted in favour of new schemes ie. from 90 percent allocation going to ongoing in 2018-19 to 63 percent in 2019-20 budget, as a result of ADP rationalization.
Meanwhile, the Khyber Pakhtunkhwa government has estimated current capital expenditure that primarily consists of debt repayment at Rs 9.7 billion for the current financial year 2019-20 that include repayment of foreign loans, loans & advances to provincial government employees and write of loans and advances to provincial government employees.
Presently there is no outstanding debt liability against the provincial government on account of federal loans (Cash Development Loans) as on 1st July 2019.
The foreign exchange loans are used for the financing of specified development projects under an agreement between respective governments. The re-lending terms and conditions of the loans to the provincial government are the same as agreed by the federal government with the loan providing agencies.
Most of the loans have embedded fixed interest rates; only 5 loans are on LIBOR terms (variable interest rate). Foreign debt, in terms of currency composition, is heavily denominated by US dollars which accounts for more than two-third of foreign debt stock. The total debt labiality on account of foreign debt is Rs 193.7 billion.
Comments
Comments are closed.