The Balochistan budget

Resource rich Balochistan’s budget 2016-17, announced on Sunday by Chief Minister Nawab Sanaullah Zehri, has relied the lowest on its own revenue generation as a percentage of total revenue in comparison to the other three provincial budgets – a paltry 3.7 percent or in total terms 9.12 billion rupees.

The share of the province from the divisible pool – projected at 2,044.143 million rupees in 2016-17 by the federal government – is 9.09 percent according to the National Finance Commission award 2010 which gives a total of 185.8 billion rupees to Balochistan.

The remaining 60.2 billion rupees is the revenue of the province from its natural resources, including (i) royalties on oil; and (ii) development surcharge on gas with effect from 1st July 2002 that, as per the NFC award, reworked and the amount subject to a maximum of 10 billion rupees to be paid in five years in five equal instalments by the centre as grants to be charged to the federal consolidated fund.

Balochistan’s is a deficit (Rs 36.48 billion) budget with projected expenditure at 282.77 billion rupees and projected revenue at 245.23 billion rupees. Last year’s budget envisaged a deficit of 26 billion rupees and in percentage terms the rise in the deficit in 2016-17 is a whopping 71 percent.

Foreign development assistance as a source of revenue is the lowest for Balochistan amongst the four provincial budgets, 6.18 billion rupees, which is largely attributable to the ongoing insurgency as well as Taliban/Haqqani network operations which explains why 30.26 billion rupees has been earmarked for security – nearly 11 percent of total outlay.

This is a much higher amount than the 2.7 billion rupees budgeted last year and one would hope that it is adequate to end the law and order issues that have faced the province for decades and which are cited as the major reason for its failure to exploit is considerable mineral wealth.

Be that as it may, there have been a few reports that the Chief Minister is engaging in dialogue with the exiled Baloch leadership though that by itself does not lead to the conclusion that such talks are not under way.

In what was widely seen as a change in stance in November of last year the self-exiled leader of the Baloch Republican Party (BRP) Brahumdagh Bugti issued the following statement that raised hopes of a rapprochement, “Baloch Republican Party (BRP) is a democratic party and believes in resolving issues in a peaceful way.”

These hopes were dashed when in April this year Balochistan Chief Minister in the presence of Southern Command Commander Lieutenant General Aamer Riaz, Sardar Aslam Bezenjo, Nawab Muhammad Khan Shahwani and Sardar Kamal Khan Bangulzai, stated that the so-called leaders of the province resident in the UK and Switzerland had no mandate to decide Balochistan’s fate and that the civil and military leadership were on the same page and jointly working for a bright future of the people of the province.

Education is budgeted to receive 15 percent more resources than last year – 28.93 billion rupees – and health 17.37 billion rupees as well as 10 billion rupees on water supply from Pat Feeder to Quetta.

These are significant amounts given the low population of the province and reflect expenditure priorities that can be supported; however at the same time there are concerns as to how much of the budgeted amount would not seep out of the system through corruption in the aftermath of the physical remand of former Finance Minister Mir Khalid Langov and former Finance Secretary Mushtaq Raisani by National Accountability Bureau after more than 730 million rupees were found in cash in Raisani’s residence last month.

However, like the federal government the PML (N)-led Balochistan government is also relying on the China Pakistan Economic Corridor (CPEC) to boost development and provide jobs with special reference to Gwadar port. One would hope that the pace of the CPEC picks up and for that more supportive development funding from the federal and provincial governments is required.

Copyright Business Recorder, 2016