KP faces budget shortfall of Rs517b

The Khyber Pakhtunkhwa (KP) has encountered a significant budgetary shortfall of over Rs. 517 billion in the financial year 2022-23, resulting in a concerning reduction in the provincial budget. Additionally, the province is expected to face a deficit of Rs4 bn.

Hamayatullah Khan, the Advisor to Khyber Pakhtunkhwa Chief Minister on Finance, disclosed that the current fiscal year’s budget could reach Rs. 815 bn, to be presented by June 30. However, the province must address a loss of up to Rs. 4 bn, which the provincial government will have to cover. The primary cause behind this budgetary loss and reduction is attributed to the federal government’s failure to make timely payments, leading to incomplete disbursement of funds for the province’s expenditures.

The PTI-led government had initially proposed a budget of Rs. 1.332 trillion for the fiscal year 2022-23. According to Hamayatullah Khan, this budget is now expected to be revised to Rs. 815 bn, marking a historic shortfall of Rs. 517 bn. In light of the situation, the provincial government has decided to approach the Prime Minister once again to secure the necessary funding from the central government, which currently amounts to Rs. 80 bn.

Hamayatullah Khan further revealed that out of the allocated Rs. 62 bn for the power sector in the ongoing year, only Rs. 5 bn has been received. Moreover, there are outstanding dues of Rs. 280 bn based on AGN Kazi’s formula.

Furthermore, funds for district expenditures have not been forthcoming, and the tribal belt’s share from the National Finance Commission (NFC) is limited to 5%, which should have amounted to Rs. 257 bn in the budget. Additionally, the three percent NFC allocation for the tribal area, totaling Rs. 294 billion, has not been provided.

Highlighting the way forward, the special aide to the KP Chief Minister stated that the caretaker government has approved the Charter of Economy for Khyber Pakhtunkhwa, urging all political parties to unite and approach the federal government to demand the province’s rights.