PESHAWAR: With the next budget just weeks away, Khyber Pakhtunkhwa Chief Minister Pervez Khattak is understood to be considering to replace the finance secretary for refusing to borrow money for his discretionary grants.

Officials in the know claimed that the acrimony began during a meeting days before the chief minister’s visit to China and had built up so much that Mr Khattak had decided to replace finance secretary Ali Reza Bhutta.

They also insisted that a summary to that effect had already reached the chief minister’s table and that its approval was just a matter of time.

The officials said home secretary Shakil Qadir Khan was likely to succeed Bhutta.

Amid JI opposition, CM mulling Bhutta’s removal for refusing to borrow money for his discretionary grants

They however said the only hurdle to the finance secretary’s removal was the opposition of the Jamaat-i-Islami, the ruling PTI’s coalition partner holding the finance department.

The officials claimed that finance minister Muzaffar Said along with local government minister Inayatullah met the CM lately and conveyed the party’s ‘strongest reservations’ about his likely move.

They said the issue cropped up during the April 10 meeting of the hydel development fund (HDF) board.

The fund created in 1992 to develop the province’s hydel potential manages a portfolio of over Rs30 billion.

On March 7, the government promulgated an ordinance providing for the use of the HDF money for any ‘purpose it deems fit’.

The officials however claimed that the chief minister was asking for more HDF money to bridge the yawning gap between resources and his over-pitched and over-ambitious development programme.

They said there were also proposals to draw money from the HDF other than Rs15 billion that were prepared by the energy and power department.

The officials said Rs2 billion of the fund’s money had to go to the Billion Tree Tsunami programme.

Also, the budget documents also contained Rs12.2 billion from the commercial borrowing and the provincial government’s attempt to secure that amount from the employees’ pension fund. However, the pension fund board declined the loan’s request on at least two occasions.

The officials insisted that besides utilising the HDF money, Mr Khattak also wanted to secure loan against the consolidated fund, which is the provincial government’s main account.

They said the finance secretary also resisted the bid saying too much loans were likely to drastically reduce the fiscal space for the next government.

The officials said the chief minister desperately needed the amount to dish out as discretionary grants for the brick and mortar projects as the PTI government was gearing up for its last budget.

A source said when Mr Khattak asked for additional funds, the finance secretary replied that he had already released all funds meant for development and opposed the borrowing of money for the purpose, to the chagrin of the CM.

A participant told Dawn that Mr Khattak’s tone was harsh.

Sources said the chief minister later apprised PTI chief Imran Khan about his decision to remove Mr Bhutta.

They said the JI tried to reason with Mr Khattak asking him to allow the secretary to continue in office until the passage of the provincial budget.

Meanwhile, the officials said at a time when the government had looking for ways to secure funds, it had increased the size of its annual development programme.

According to them, the government has pitched its ADP at Rs161 billion, including Rs91 billion provincial component and Rs36 billion foreign assistance.

However, the revised ADP estimates submitted to the provincial assembly on Wednesday show that notwithstanding the province’s ‘not-so-steady’ revenue stream, its provincial component has gone up to Rs103.41 billion.

The revised allocation for total ADP has touched Rs175.354 billion mark.

With the finance department already facing a shortage of Rs12.2 billion on account of commercial loan contained in the budget estimates, the further addition of Rs14.95 billion increase in the size of the ADP has taken the budgetary gap to Rs27 billion.

The shortfall is likely to touch the staggering proportion in case the province’s tax machinery fails to achieve its targets and the province receives less in the federal transfers than expected.

During the current year, the finance department has released Rs5.82 billion to lawmakers across the province in lieu of discretionary grants.

When contacted, finance minister Muzafar Said expressed ignorance about the differences between chief minister and finance secretary.

He said the chief minister headed the government and therefore, he had the authority to transfer any officer.

“At present, there is nothing like the transfer of the finance secretary on (his) table,” he said.

The minister also denied that his party (JI) had tried to persuade the CM not to transfer Mr Bhutta until the budget’s announcement.

Published in Dawn, April 28th, 2017