QUETTA, June 22: The Balochistan government is seeking a complete write-off of Rs19 billion overdraft it has with the State Bank of Pakistan.

The issue will be raised with the Central Bank’s governor when she visits Quetta in the near future.

“Our finances are in bad shape,” Balochistan Finance Minister Mir Asim Kurd told a post-budget press conference here on Sunday.

Balochistan Finance Secretary Mahfooz Ali Khan said the conversion of Rs19 billion overdraft into a loan payable on easy terms would also be acceptable.

“We are paying Rs700 million penalty on this overdraft every year at the rate of four per cent,” he said and added that its conversion into a soft loan would save the provincial government from penalty burden.

Mr Kurd said the government was expected to pay back the entire portfolio of cash development loans from an Asian Development Bank credit, which would ease the burden further.

The finance secretary said a big portfolio of cash development loans had been swapped with relatively less expensive loans from the World Bank and Asian Development Bank.

One of the disturbing trends of the budget, the secretary said, was the growing amount of throw forward of development schemes which had now reached Rs55 billion.

“It was brought down to Rs35 billion a few years ago by taking up quick completion of the schemes,” he said, adding that the throw forward was enhanced due to increasing prices of construction material, including steel and cement.

“The Balochistan government is now giving priority to completion of the 224 development schemes which are in final stages of completion. Then will follow other schemes.”

He said the reconstitution of the National Finance Commission and its proceedings at a quick pace was a top priority item on the federal government agenda after budget approvals are dealt with on the federal and provincial levels.

“We have nominated Gul Faraz Khan as our representative in NFC,” he said.

He explained that the provinces were now getting 47 per cent of Rs11,500 billion federal divisible pool of taxes, if subvention grants were taken into account.

“There are three pools for distribution of funds among the provinces. One is subvention pool, which is given to all four provinces in different ratios. The second is one-sixth of sales tax given to provinces after abolition of the zila tax and octroi on two different criteria. The third pool is given entirely on population basis.”

“Population is expected to cease to be the only criterion for distribution of resources among the provinces in the next NFC award,” Mr Mahfooz Ali Khan said.

He said the prime minister who in a meeting with a delegation of the Balochistan government had dropped hints that the next NFC award would be composite that would give due weight to all relevant factors for distribution of resources and would not rely on population only.

“We have not given up the project of setting up a Balochistan Bank,” the finance secretary said.

He said the success of the Bank of Punjab and Sarhad Bank was because the two provincial governments had enough funds to put in these banks.

“If and when the viability of Balochistan bank is established,” he said, “the proposed bank project will be taken up as a public-private partnership. The Balochistan Bank should also do business in Karachi, Lahore and Islamabad and other places.”

Mr Kurd said that there were 10,000 vacancies in the Balochistan government. He said the government had approved 2,424 new vacancies for the next financial year.