MUZAFFARABAD, June 20: Azad Jammu and Kashmir’s Rs49.59 billion deficit budget for the next financial year was presented before the Legislative Assembly here on Wednesday.

Termed by Finance Minister Chaudhry Pervaiz Ashraf a “balanced and people-friendly document,” the budget proposed Rs40.05 billion for recurring expenditures and Rs9.547 billion – 19 per cent of total budget – for developmental activities.

The entire opposition boycotted the proceedings, accusing the government of disregarding its mandate.

The minister claimed that the budget had been prepared in keeping with suggestions from people from different segments of society, including the opposition. The government, he said, had inherited huge fiscal problems; nevertheless, it had initiated a number of major projects with assistance from the federal government and by enforcing strict financial discipline.

“The basic obligation of this government is to struggle for liberation of Kashmir. We make a pledge that the Kashmir issue will be highlighted across the globe and not only political, moral and diplomatic support to the struggling Kashmiris will be continued but our blood will also be part of their sacrifices,” he vowed.

Apart from that, the AJK would be converted into a modern welfare state by stopping the wastage of its national resources and enforcing financial discipline, he added. But he stopped short of outlining specific measures to achieve this goal, including enforcement of much-needed austerity drive.

Regarding the estimated income during 2012-13, Mr Ashraf informed the house that Rs15.31 billion would be generated from AJK’s internal resources, such as excise duties, electricity etc, Rs840 million from water use charges of Mangla Dam, Rs7.4 billion as (80 per cent share of the) taxes generated from the AJK territory by the AJK Council manned Income Tax Department Rs11.4 billion as AJK’s share in federal taxes.

The difference (deficit) of Rs5.1 billion between the income and recurring expenditures (Rs40.05 billion) would be met by the central government, he said.

The minister announced that the government would give 20 per cent salary raise to its employees on the pattern of the federal government.

He said the federal government had decided, in principle, to give a “bailout package” to help the AJK government overcome its financial problems.

Regarding the reconstruction in earthquake-affected areas, Mr Ashraf said that over Rs32 billion was required in the current year but Erra had got Rs10 billion from the federal government of which Rs2.571 billion was released to the AJK.