Keeping in view the next general election, the coalition government of Khyber Pakhtunkhwa presented on Saturday a Rs249.151 billion balanced budget for 2011-12, one-third of which is to be spent on the Annual Development Programme (ADP).
Finance Minister Mohammad Humayun Khan presented the budget in the provincial assembly amid an unusual calm as the opposition did not cause any problem.
The budget proposed no new levy, but an increase in the rates of taxes and water cess and bringing private professional colleges into the tax net will increase the cost of different services.
Relief in penalties on late registration of vehicles and reduction in sales tax on services from 17 to 16 per cent in line with the federal budget are part of the budgetary proposals.
Apart from an all-time high Rs85.141 billion ADP, the provincial government announced self-employment schemes for skilled people, stipend for outstanding students, technical education programmes and continuation of some ‘pro-poor’ plans. The schemes will cost Rs4.5 billion.
Discretionary funds of MPAs have been doubled to Rs20 million to let them undertake maximum development schemes.
A new provincial department for rehabilitation and reconstruction will be set up and 6,992 posts created.
In line with the federal government’s announcement, salary and pension of government servants has been raised by 15 to 20 per cent. Conveyance allowance has been extended to employees of grades 1 to 15 across the province. Earlier, only employees serving in Peshawar district were entitled to the allowance.
The budget outlay is almost 16 per cent lower than the current year’s budget mainly because borrowings from commercial banks for procurement of wheat and grains have not been made part of the estimates.
According to budget documents, the provincial government intends to generate Rs87.706 billion against the head. The size of the budget including this figure is Rs336.857 billion.
It envisages revenue receipts of Rs232.788 billion, compared to Rs200.7 billion revised estimates for the current financial year — an increase of 14 per cent.
Of the general revenue receipts, a major chunk of Rs149.988 billion is to be received from the federal divisible pool under the National Finance Commission award.
The province’s share in funds specified for offsetting the impact of the war on terror has grown by almost Rs4 billion to Rs18.022 billion.
According to the revised estimates for 2010-11, the province has secured the second Rs25 billion instalment of net hydel profit arrears in accordance with a commitment by Prime Minister Yousuf Raza Gilani.
A similar projection has also been made for the next financial year in addition to the provinces royalty on hydroelectric power generation capped at Rs6 billion.
Straight transfers (royalty on oil and gas) appear to be a growing source of income as the province estimated the receipt of Rs14.649 billion by the end of this month against an initial estimate of Rs9.368 billion.
An amount of Rs13.806 billion has been projected in the budget and officials expect the figure to rise after an expected increase in gas tariff.
The budget proposals envisage Rs7.349 billion as the province’s own receipts through tax and non-tax measures against this year’s revised estimate of Rs6.937 billion.
This indicates that the province’s own contribution to its budget has plummeted to less than three per cent, raising serious questions about the abilities of both tax and non-tax collecting agencies.
The budget envisages a current revenue expenditure of Rs149 billion —almost seven per cent higher than the revised estimates for this year.
Of the expenditures, the police budget tops all the sectors at Rs18.81 billion.
Education and health jointly get Rs13.12 billion, irrigation Rs2.34 billion, technical education Rs1.23 billion, housing and communications Rs2.32 billion, pension and insurance Rs16 billion and district salaries Rs50.82 billion.
The province will spend Rs10.6 billion on debt serving and Rs2.5 billion as subsidy on wheat. The size of the ADP is 19 per cent larger than the development budget for 2010-11.
Of the Rs85.141 billion, Rs69.028 billion will be generated from the provinces’ own resources and Rs16.112 billion foreign component. The programme comprises 1,035 projects — 632 ongoing and 403 new.
A major portion of the funds has been earmarked for ongoing schemes to ensure the completing of maximum projects during the year.
The pro-poor schemes to the launched include the Pakhtunkhwa Hunermand Scheme which envisages provision of small loans of Rs50,000 to Rs300,000 to skilled people through the Bank of Khyber.
The Satoori da Pakhtunkhwa (stars of Pakhtunkhwa) scheme aims at giving a monthly stipend of Rs10,000 to Rs15,000 to outstanding students of matriculation and intermediate for two years.
A special capacity building programme for nurses of public sector hospitals will cost Rs500 million.
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