PESHAWAR: The Khyber Pakhtunkhwa government on Thursday accused the centre of pushing the province into bankruptcy by withholding its due share in federal transfers and net hydel profit as well as allocations for the merged tribal districts.

Addressing a news conference here, provincial finance minister Taimur Saleem Jhagra said the federal government’s actions had so far denied the provincial government around Rs120 billion from its due share.

He said the situation was unacceptable to the province. “We have slowed down our development and non-salary spending for next four to six weeks to raise balances in province accounts in order to address the financial challenge,” he said.

The minister said the slowdown was also aimed at ensuring uninterrupted spending for the flood rehabilitation across the province.

Minister claims provincial govt denied Rs120bn from its due funding share

He added that the province had also allocated Rs10 billion for the purpose.

Mr Jhagra said since its formation, the federal government hadn’t paid even a penny to the province in lieu of NHP share that amounted to Rs61 billion.

He added that the last PTI-led federal government had provided the provincial government with Rs68 billion NHP for July 2020-March 2022 period, but not a single penny had been received by the province since the ouster of the PTI government in April this year.

The minister said the analysis of the federal transfers showed that the centre had released less than the province’s due share in the taxes collected by the Federal Board of Revenue.

He said during the financial year 2020-21, the federal government had transferred Rs418.07 billion to the province out of its due share of Rs429.6 billion leaving the province short of Rs11.7 billion.

Mr Jhagra said the province’s federal transfers were Rs1.5 billion short of the due share in 2021-22 and Rs14.75 billion in the current fiscal.

“Federal transfers for every month of the current fiscal total Rs3.5-Rs4 billion short of our due share,” he said.

Regarding allocations for tribal districts, the minister said the provincial government had spent nearly Rs20 billion in the erstwhile Fata from its own resources.

He said the tribal districts’ budget had been curtailed by the current Pakistan Democratic Movement government in the centre unlike the continuous past hikes.

Mr Jhagra said development budget of tribal districts hadn’t been increased during the current fiscal.

“The [Prime Minister Shehbaz Sharif-led] PDM government did not release Rs8.5 billion of development funds and Rs12 billion of current expenditure in the last quarter of last fiscal forcing us [province] to spend money from our own resources,” he said.

The minister also complained that the federal government unilaterally suspended the Sehat Card free healthcare programme for tribal districts costing the province Rs4 billion in the current fiscal.

He said the allocations for current expenditure in 2022-23 were Rs26 billion short of the entire expenses.

“The merged tribal areas’ current expenditure is likely to be around Rs86 billion, which has to be borne by the federal government,” he said.

Mr Jhagra said the current federal government even did not allocate a single penny for the rehabilitation of internally displaced persons.

“The centre has so far released only Rs5 billion development funds this year, while the province has spent Rs3 billion from its own resources,” he said.

The minister said there was a likelihood of tax collection by the FBR taxes being less than anticipated, so that would cause a deficit of Rs60-Rs65 billion for the province.

He said the province had not even received a penny from Rs10 billion announced by the prime minister for flood relief operations in the province.

Mr Jhagra said to address funding shortage, the provincial government had already decided to move the court to claim due funds besides holding talks with the centre for the amicable resolution of the issue.

He also said the province was moving towards the ‘single treasury accounting’.

The minister said the province was trying to divert up to Rs100 billion from the province’s commercial accounts into its accounting system to improve balances to avoid overdraft, which hindered its ability to spend money.

He added that it was the way to bridge the funding gap by Rs30-Rs 40 billion in the short term.

Mr Jhagra said the federal government was not fulfilling its responsibilities regarding the province’s rights over its resources guaranteed by the Constitution.

He said the centre had deliberately pushed 40 million people of the province to the “way of financial harm.”

The minister said a meeting would take place today (Friday) to discuss legal course regarding the denial of the province’s resources by the centre.

Published in Dawn, November 11th, 2022