KP faces budget deficit of Rs.22bn: Siraj-ul-Haq

PESHAWAR: Senior Minister Khyber Pakhtunkhwa, Siraj-ul-Haq has said that due to unilateral variation in total federal divisible pool of resources the already budget starved province is facing a deficit of Rs.22 billion.

Addressing a press conference here in the Cabinet Room of Civil Secretariat on Wednesday, he said that in the beginning of the financial year, the Federal Finance Ministry have estimated the total volume of divisible receipts at Rs.2475 billion under which the province was due to receive a share of about Rs.222.093 billion.

Siraj-ul-Haq, who also holds the portfolio of finance in Khyber Pakhtunkhwa cabinet said that budget was also prepared on the basis of the same estimates. However, he said payments during the current financial year remained below the target.

Similarly, he said federal government from time to time also cut down the target of total divisible receipts several times without taking provinces into confidence. He said that some time it was unilaterally fixed at Rs.2345 billion, Rs.2270 billion and at last at Rs.2229 billion.

The provincial finance minister said that the matter was also taken up in the meeting of National Finance Commission (NFC) held in Islamabad with Federal Minister for Finance, Ishaq Dar in the chair and stressed for immediate resolution of the matter.

It was brought in the notice of participants that under the formula of NFC, the share of the provinces in total divisible pool is 57.5 per cent and population basis the share of Khyber Pakhtunkhwa is 14.62 per cent while in head of war on terror its share in total divisible receipts is 1 per cent, which is 1.8 per cent of the total share of the province is still outstanding. Similarly, he said the total share of Khyber Pakhtunkhwa in federal divisible pool is 8.97 per cent of the receipts.

He said that federal finance minister has assured to take into consideration severe problems faced by the province. However, as the financial year is near conclusion. Therefore, further progress on the request of the province would be difficult.

Siraj-ul-Haq said that the provincial government under Finance Act 2013 have decided the imposition of Infrastructure Development Cess and for its implementation have finalized all legal and administrative measures. But, due to objections raised by federal government it could not be implemented.

In the recent meeting, he said federal government has assured that all outstanding matters would be resolved soon and all hurdles in the levy of Cess would also be removed with immediate effect, which he said help generate maximum receipts for the province.

In this connection, he said soon after the meeting the concerned authorities have been informed of progress while the provincial Department of Excise and Taxation and Federal Board of Revenue (FBR) had also been informed in written to removal hurdles in this regard with immediate effect.

He said that according to Arbitration Award in head of net profit on electricity it was decided that in case of untimely payment of the outstanding amount of Rs.110 billion, then 10 per cent annual mark-up would also be charged on it and on that ratio an amount of Rs.56 billion is due in that head on whose payment he said federal government had agreed and assured that necessary action in this regard would be taken after the budget and the payment would be made during next financial year.

The provincial finance minister further said that regarding the payment of other arrears relating to net profit on electricity a progress has already been assured.

He said that the KP province could have gotten the revenue the tone of Rs.14.6 billion per annum if the Excise Duty could have been implemented adding that KP is producing 40000 barrel oil per day, which is half of the total production.