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KP announces 15pc raise in salary, pension

Updated June 18, 2013
Khyber Pakhtunkhwa Finance Minister Sirajul Haq presentinf the pronvincial budget for the year 2013-14 in the KP Assembly on June 17, 2013.—APP Photo
Khyber Pakhtunkhwa Finance Minister Sirajul Haq presentinf the pronvincial budget for the year 2013-14 in the KP Assembly on June 17, 2013.—APP Photo

PESHAWAR, June 17: Khyber Pakhtunkhwa’s Finance Minister Sirajul Haq presented in the provincial assembly on Monday a Rs344 billion budget for the next financial year, with a deficit of Rs10.7bn.

The minister announced a 15 per cent increase in monthly salary and pension of government employees with an annual impact of Rs12bn. He proposed to increase the minimum pension from Rs3,000 to Rs5,000.

The budget proposes to raise the minimum wage in the private sector to Rs10,000 from Rs8,000 per month.

The budget estimates general revenue receipts at Rs297.99bn, against Rs245.9bn of the previous financial year.

The receipt estimates include the province’s share of Rs198.3bn from the federal taxes, Rs23.8bn on account of its share equivalent to 1 per cent of the federal divisible pool for the war on terror and Rs27.5bn straight transfers, including royalty on oil and gas, gas development surcharge and excise duty on gas.

The provincial government’s ability to achieve Rs297.99bn receipts will depend on the performance of the Federal Board of Revenue (FBR). The province recorded a shortfall of Rs33.5bn during the outgoing financial year because of a shortfall in FBR’s receipts. As a result, the province had a net deficit of Rs35.99bn under its account-1 that caters to employees’ salaries, pensions, development programme, capital receipts and expenditure, administrative budget and several other subjects.

The minister proposed an expenditure of Rs344bn.

The budget reflects the minimum common ground worked out by the Pakistan Tehreek-i-Insaf and Jamaat-i-Islami to implement part of their election manifestos, covering youths, health and education sectors, social welfare and austerity measures.

The government has decided to continue, as a special initiative, all job creation schemes launched in and after 2011-12.

Mr Haq said the government would launch a new soft loan scheme, titled ‘Khud Kafalat’. Interest-free loans of Rs50,000 to Rs200,000 will be offered through the Bank of Khyber and will be recoverable in easy instalments over three and a half years.

He said the government would launch a Rs2bn fund and it would be enhanced to Rs2.7bn by the end of the year.The budget proposed another microfinance scheme with a seed money of Rs1bn in 12 under-developed districts. Under the scheme titled ‘Masaa’dha’ (assistance), interest-free loans of Rs25,000 to Rs50,000 will be extended to the ‘downtrodden at their doorsteps’. The districts will be selected through a reliable survey.

A similar initiative with an investment of Rs500 million will be launched to give a monthly stipend of Rs2,000 for one year to jobless youths with a masters’ degree in arts or science. Unemployed youths with technical education and religious seminaries’ degrees equivalent to masters’ degree will also be eligible for the scheme.

The minister proposed to invest Rs120m to facilitate ‘creative’ and ‘innovative’ youths and businessmen to set up independent businesses. Under the scheme, business plans will be invited from interested individuals. The plans will be evaluated by recognised business schools, institutions and chambers of commerce. Fifty best proposals will be selected and for each of them a grant of Rs2m will be given in instalments for execution of the plan. The scheme will be supervised by the Bank of Khyber.

Against the estimated revenue of Rs297bn, an amount of Rs211bn will be for government’s expenditure – Rs125.24bn for employees’ salary and the remaining Rs85.8bn for non-salary expenditures of the provincial government’s line departments.

The pension bill will grow to Rs24bn from Rs21.581bn of the last financial year.

The administrative budget will consume Rs63bn against Rs55.28bn of the outgoing financial year.

A major chunk of Rs23.78bn has been allocated for the police department.

The provincial government plans to set up the Khyber Pakhtunkhwa Revenue Authority with a mandate to collect sales tax on services from the new financial year. The province anticipates a collection of Rs6bn on account of GST on services.

Another expected income of Rs6bn has been estimated under the head of net hydel profit in line with the province’s constitutional right.

The finance minister informed the assembly that the province had received nothing under the head of net hydel profit during the outgoing financial year.

He said the province would get Rs25bn as arrears of net hydel profit under an agreement signed with the centre four years ago.