KP govt expected to present a budget deficit of Rs60bn

The federal government has only paid Rs15bn to KP out of the Rs55bn net hydel profit owed to the province.

PESHAWAR: The Khyber Pakhtunkhwa (KP) government is likely to present a budget deficit of Rs60 billion due to non-payment of its dues amounting to billions of rupees by the federal government.

According to reports, due to the economic downturn, the federal government is unable to pay the province its full share of the Net Hydel Profit (NHP), due to which the KP government is expected to present a deficit in its budget for the fiscal year 2020-21.

As per the budget for fiscal year 2019-20, an estimate of Rs55 billion had been made for NHP to be paid to KP by the federal government. However, as of now, the federal government has paid only Rs15 billion to KP. 

According to sources in the Finance Department, the KP government will now have to present a budget deficit of more than Rs60 billion for fiscal year 2020-21.

Article continues after this advertisement

Earlier, KP has already taken a cut of Rs154 billion in the National Financial Commission (NFC) due to which the province is facing severe financial difficulties. 

According to sources the KP government intends to increase the budgets for health, education and public sector departments, while development budgets of other departments are likely to be reduced in the budget to be presented on Friday.

Due to the financial crunch the KP government is looking to cut the annual development program of various departments, which will result in termination of a number of important projects.

KP Finance Minister Taimur Saleem Jhagra told media that not only Pakistan’s budget but also the entire world’s budget has been affected due to Covid-19. He promised to present a better budget in the next year.

The KP finance minister informed that due to Covid-19 the KP government had incurred a loss of Rs160 billion during the last three months, prompting the KP government to resort to borrowing to minimize its budget deficit. 

“The net profit of electricity has not been paid by the federal government which has created a difficult situation for the KP government,” said Jhagra.

Sources in the Finance Department allege that the KP provincial ministers have formed various wings in different departments and have made recruitments in those wings against merit while giving the new recruits hefty salaries. On the other hand, despite such expenditures made by the ministers the uplift fund for the province has been slashed.

Additionally sources claimed that compared to its current share, KP’s share in NFC and NHP was higher when Pakistan People’s Party (PPP) and Pakistan Muslim League Nawaz (PMLN) were in power, despite the provincial government belonging to rival parties during their tenure.

- Advertisement -
- Advertisement -

Must Read

Footwear exports surge 23.7pc in 2MFY22

ISLAMABAD: The export of footwear from the country increased by 23.72 per cent to $26.787 million during first two months of fiscal year 2021-22...