ISLAMABAD: Newly elected Prime Minister of Azad Jammu and Kashmir Anwarul Haq on Saturday met Finance Minister Ishaq Dar and reiterated the demand for the release of stuck-up funds promised by the centre for budgetary support for the current fiscal year.

The reluctance of the centre to release committed funds has put the AJK government in a tough situation to deal with the brewing financial crisis. Former AJK premier Tanveer Ilyas also met Mr Dar on Feb 25 but failed to convince him to release the funds.

A well-placed source privy to the meeting told Dawn on Saturday that the finance ministry had released Rs5 billion each for AJK, Khyber Pakhtunkhwa and Gilgit-Baltistan under the head of development funds.

Dar remains non-committal in a meeting with PM Anwarul Haq

The source said that Mr Haq also met Prime Minister Shehbaz Sharif to secure commitment for the release of funds. The meeting with Mr Dar was a follow-up but the AJK premier failed to secure any assurance for the release of the budgetary funds related to increases in salaries and pensions, releases of development grants and a subsidy amount on wheat flour.

The PMLN-led coalition government in Budget 2022-23 reduced the recurrent budget of the AJK government by Rs15bn against the committed amount of Rs74.32bn. However, the PTI government agitated against this unlawful reduction. As a result, the federal government agreed to take the burden of an increase in salary and pensions.

As per agreement with the federal government, the financial impact of an increase in salaries and pension is Rs15bn for employees of AJK. Despite several requests, the finance ministry has yet to release this amount to AJK.

According to the source the newly appointed AJK premier also apprised the finance minister of the AJK’s economic health in the wake of non-releases of the committed amount. “We urgently need Rs11bn from the centre to pay salaries and pensions,” the source said, adding that Mr Dar was non-committal in the meeting.

On the development grants, the finance ministry has released only Rs14.2bn in the first 10 months of FY23 against the total amount of Rs28.5bn. This amount did not include the inflation factor, which would add another Rs7bn to the total Annual Development Plan for 2022-23.

The AJK government has requested the finance ministry for Rs26bn over and above the released amount to fulfil its budgetary requirements.

AJK government allocated Rs3.8bn to provide subsidised wheat flour in FY23. However, Pakistan Agricultural Storage & Services Corporation (Passco) has provided imported costly wheat pushing up the subsidy amount by Rs10bn. At the same time, AJK is still awaiting the 4G auction proceeds amounting to Rs5bn from Pakistan Telecommunication Authority.

Published in Dawn, May 7th, 2023