MUZAFFARABAD: Azad Jammu and Kashmir (AJK) has been hit by serious financial crises after the overdraft obtained by the government from the State Bank of Pakistan (SBP) has exceeded its limit of Rs4.5billion, a meeting learnt here on Wednesday.

The urgent meeting was convened by chief secretary Sikandar Sultan Raja after the overdraft became Rs 4.8billion and the SBP stopped clearance of salary cheques and spending on development projects.

After the AJK Secretary Finance Malik Mohammad Sadiq briefed the meeting on the fiscal situation, the chief secretary directed the participants to prepare concrete and comprehensive proposals to overcome the crisis, according to an official handout.

The chief secretary expressed serious concern over the difference between the development and recurring budget in AJK, after he was told that only 17 per cent of total budget was meant for developmental activities, as compared to 74 pc for the recurring expenditures, mainly the salaries and the perks and privileges of the official machinery.

He directed that the funds meant for the projects sponsored by the federal government under its public sector development programme or the foreign donors should not be diverted elsewhere to show decrease in the budget deficit.

Asking the heads of departments to meet their revenue targets for the ongoing fiscal year, he said since the creation of new and up-gradation of existing posts had been banned in view of the fiscal crunch and the directions of the federal finance division, all departments should ensure realisation of the ban in letter and in spirit.

Published in Dawn, April 14th, 2016