MUZAFFARABAD: The coalition government in Azad Jammu and Kashmir (AJK) unveiled its deficit budget for the financial year 2024-25 on Tuesday, amounting to Rs264.033 billion, with over 83 per cent allocated for recurring expenditures.

Presenting the budget in the Legislative Assembly, presided over by Speaker Chaudhry Latif Akbar, Finance Minister Abdul Majid Khan said Rs220.033bn had been earmarked for recurring expenditures and Rs44bn for development projects.

He said the government expected to generate Rs201.17bn from internal and external resources. This included Rs75bn from tax revenue (income and other taxes), Rs105bn from AJK’s share in the federal variable grant, Rs19.17bn from internal proceeds, Rs1bn from water usage charges, and Rs1bn from capital receipts (loans and advances).

Though the minister did not explicitly state how the government would cover the Rs18.863bn gap between income and expenditures, he expressed confidence that better and transparent utilisation of fiscal resources would help ensure savings, “as seen in the current year”.

Rs44bn earmarked for development projects

“During the current year, we were faced with a deficit of Rs23.597bn in our recurring budget, but an effective control on expenditures helped us scale down the recurring budget from Rs190.47bn to Rs165.1bn on the one hand and increase our income from fixed target of Rs166.45bn to Rs177.25bn,” he said, adding: “The government saved Rs12.15bn which reflected its austerity and good governance.”

Much of the minister’s speech focused on the annual development programme and lacked new ideas.

Of the Rs44bn development budget, Mr Khan said 62pc of it would be spent on the ongoing projects and 38pc on new projects. He added that 63 projects were expected to be completed by the end of the current year, with a target of 161 projects for the next year.

Pertinently, the development budget is provided by the federal government as a ‘development grant’. Last year, the federal government had committed Rs30bn for development work in AJK, but the coalition government had announced a development budget of Rs42bn, claiming that it would generate the remaining Rs12bn from its own resources.

However, the current year’s revised budget presented by the minister during his speech revealed that the development budget was restricted to Rs25.835bn.

Mr Khan’s speech lacked information on whether the federal government had committed Rs44bn for next year’s budget or if the AJK government was contemplating replicating last year’s contention.

When asked by Dawn, a senior official of the AJK planning and development department declined to share any substantial information in this regard, saying “some issues were yet to be settled”.

The printed version of the finance minister’s budget speech included a chart of development budget allocations amounting to Rs44bn.

Major allocations included Rs14.9bn for communication and works, Rs4.8bn for education, Rs3.2bn for hydropower generation through Power Development Organisation and Rs1.6bn for electricity department, Rs3.7bn for local government and rural development, Rs3bn for health, Rs2.465bn for physical planning and housing, Rs2.035bn for ‘governance/miscellaneous,’ Rs1.4bn for research and development, Rs1.15bn for rehabilitation, land administration and management (mainly for acquiring land and allied development work on Kashmiri refugees’ colonies in Pakistan), Rs900 million for agriculture and livestock, Rs800m for forestry/watershed, and Rs700m for tourism.

The finance minister announced an increase in the pay and pensions of government servants.

Published in Dawn, June 26th, 2024