IMF programme: No budget surplus if dues not cleared, KP CM adviser warns Centre

• Aslam laments slowed-paced clearance of dues by Centre.
• Difficult to mange surplus budget without electricity profit, he says.
• CM's adviser calls for new NFC award, province's share accordingly.
  

PESHAWAR: A top Khyber Pakhtunkhwa government official warned Prime Minister Shehbaz Sharif-led federal government that it cannot expect the province to be able to fulfil its surplus budget commitment if its dues are not cleared.

The Centre should not expect KP to be able to deliver on its surplus budget promise if it doesn't provide the funds, Adviser to Chief Minister on Finance Muzzammil Aslam said while speaking to Geo News on Saturday.

The provincial government had unveiled a Rs1,754 billion annual budget for the fiscal year 2024-25, with a surplus of Rs100 billion in May earlier this year.

The budget projected Rs 1,654 billion in expenses and anticipated receiving a total of Rs1,754 billion under different heads during the fiscal year 2024-25, including Rs1212.036 billion from the federal government under Federal Tax Assignment, 1% of the divisible pool on the war on terror, straight transfer under the head of royalties and surcharge on oil and gas, windfall levy and net hydel profit.

However, the provincial and the federal governments have since been at loggerheads over the issue of clearing of the former's dues by the latter with KP CM Ali Amin Gandapur even threatening to march on Islamabad.

Furthermore, the province hasn't yet decided to sign a memorandum of understanding (MoU) with the PM Shehbaz's government for the surplus budget — a pre-condition for the $7 billion loan agreement agreed upon between Islamabad and the International Monetary Fund (IMF), The News reported on July 11.

It is to be noted that a provincial surplus is the amount provinces do not spend from funds transferred to them by the federal government.

Last month, the KP cabinet said that it would agree to the proposed budget surplus of Rs178 billion only if the federal government fulfils its commitment to resolving the financial issues of the province, the publication added later.

Commenting on the issue of the KP's dues, Aslam said that the federal government should've disbursed Rs400 billion for the merged districts, however, only Rs70 billion were allocated jointly in the budget and the Accelerated Implementation Programme (AIP) and the Centre would update on how much of this will actually be given to the province on June 30, 2025.

He also lamented that despite a 37% and 50% increase in Gilgit Baltistan and Azad Jammu and Kashmir's (AJK) budget, respectively, the PM Shehbaz's government didn't jack up the budget for tribal districts.

We have clearly told the federal government that you're doing wrong, he said.

On the issue of salaries, he noted that when the Centre was urged that the funds should be given in proportion to the increase in salaries, they were told that the matter would be considered next year as they have already talked on the issue with the IMF.

"If the net profit of electricity and royalties are not received, it will be difficult to manage the surplus [budget]," Aslam said while complaining of slow-paced clearance of the province's dues by the Centre for the past two years.

Furthermore, highlighting that the estimated income has been set at Rs93 billion, compared to last year's Rs70 billion, the official called for a new National Finance Commission (NFC) award and the KP's due share according to it.

However, he added, the federal government was opposing the new NFC.