Peshawar: Advisor to the Chief Minister of Khyber Pakhtunkhwa on Finance and Inter-Provincial Coordination, Muzzammil Aslam stated that according to the federal government, there has been a 15% decline in the production of major crops, which includes a 30% decline in cotton production alone. As a result, an additional five billion dollars will need to be spent on cotton imports. Similarly, due to the drop in wheat production, 3 billion dollars will be spent on wheat imports. Overall, the decrease in agricultural output will force Pakistan to import goods worth $10 billion, representing a loss of Rs 2,800 billion to the country and its farmers.
He said the government had claimed that the inflation rate was 4.5% or 4.7%, but it is now admitting that inflation will rise to 7.5% next year.
Muzzammil Aslam noted that Pakistan’s GDP this year was Rs 114 trillion, and next year it’s expected to increase to Rs 129 trillion. Despite this, only Rs 1 trillion has been allocated for development expenditures, and the federal government is not launching any new projects. Likewise, no new projects have been allocated to the provinces.
Of the Rs 1 trillion development budget, Rs 120 billion is from savings that were not provided as fuel subsidies, which are being used to build roads in Balochistan. This means that the actual Public Sector Development Program (PSDP) is only Rs 880 billion.
He further stated that under the “Uraan Pakistan” program, discussions were held on sports, water, and the environment, and Rs 65 billion was initially allocated to higher education. This has now been slashed to Rs 45 billion—without any consultation with the provinces.
Aslam pointed out that the government had earlier said that projects which are more than 75% complete would be prioritized, yet two road projects in Khyber Pakhtunkhwa that were over 90% complete have been deleted, which he called a clear injustice and raised during today’s meeting.
He questioned, “If the government claims inflation is being brought down to 1%, why is the interest rate still at 11%” He said that Rs 2 to 2.5 trillion in savings from interest payments this year should be redirected to development projects—but it is not happening.
He said that according to the Planning Ministry, 118 development projects have been scrapped, while the government is claiming that the growth rate will be 4.2% next year, with inflation at 7.5%. Exports will not increase significantly, but imports will rise, and $39.5 billion in remittance has been estimated.
Regarding allocations, he said out of Rs 1 trillion PSDP, Khyber Pakhtunkhwa will receive only Rs 540 million, while Balochistan will get Rs 120 billion plus Rs 20 billion more. Sindh has been allocated Rs 47.1 billion, Gilgit-Baltistan and Azad Kashmir Rs 37 billion and Rs 45 billion, and the merged tribal districts only Rs 70 billion, of which only Rs 34 billion has actually been disbursed this year.
He added that this year, Punjab’s development budget is Rs 1 trillion, Sindh’s is reportedly Rs 1.1 trillion, while Khyber Pakhtunkhwa’s total development budget is Rs 433 billion. The federal government is not providing Khyber Pakhtunkhwa with its due share for the merged tribal districts, which is unjust.
He said that Khyber Pakhtunkhwa has spent Rs 20 billion from its own funds on development in the merged districts, and around Rs 40 billion on current expenditures, which the federal government has not reimbursed.
Muzzammil Aslam said that this year alone, Khyber Pakhtunkhwa will receive Rs 300 billion less from the federal government. So far, Rs 42 billion less has been received under the NFC award, and the federal government has collected Rs 1 trillion less in taxes till May, meaning KP will receive Rs 90 billion less this year.
He demanded that the federal government issue the NFC award for the former FATA merged districts and immediately provide the share based on population, or at the very least, fulfill the allocations announced in the budget.
He concluded by stating that because the current government has not formed in Khyber Pakhtunkhwa and the merged districts, they are being denied funds—which is unfair. He emphasized that KP has complied with the IMF conditions, and even the federal government has acknowledged this.
