PESHAWAR: The alarming increase in the financial bill for salary and pension and the decreasing trend in development fiscal space have worried the Khyber Pakhtunkhwa finance managers.
Official documents show 89 per cent increase in the salary bill of the employees, while pension bill has increased by 106 per cent which is leaving little space for development.
The growing gap between the expenditures and development fiscal space has become daunting challenge for the PTI government, which is presenting record sixth consecutive budget in the province.
The provincial cabinet will meet here on Monday to give approval to the annual budget 2018-19.
Finance Secretary Shakeel Qadir Khan will give presentation to the cabinet about the new budgetary estimates of the province. After cabinet’s approval, the budget will be presented in the assembly.
Proposed bill carries increase in taxes and duties on services
According to official documents, estimated expenditure in the budget for 2018-19 is reflected Rs618 billion. The total budget consists of current Rs438 billion, Rs109 billion share of the province in ADP and Rs71 billion foreign projects assistance.
The finance department’s estimates show that the salary bill is gradually going high with 1607 per cent increase since 2001-2.
The total size of the salary bill was Rs15 billion in 2001-2 that stands at Rs256 billion in 2018-19.
Similarly, the pension bill is also showing upward trend that was Rs3 billion in 2001-2 and presently touches the figure of Rs60 billion. According to the estimates, the size of the pension would jump from Rs60 billion in 2018-19 to Rs170 billion in 2027-28.
The persistent shortfall in the federal transfers has worried the provincial government for less release from the centre.
The province received Rs405 billion against actual amount of Rs426 billion from the centre in the previous financial year, showing 21 per cent shortfall.
Similarly, the province received Rs337 billion against its share of Rs380 billion in the year 2016-17.
In a chat with journalists, Provincial Minister for Finance Taimur Saleem Jhagra said that the previous 10 years data showed that increase in revenue of the province had gone to the salaries of the employees instead of spending the same in the development sector.
“We need to promote self-employment to decrease salary budget and pension to create space for the expenditure in the development sector,” he said.
He added that KP’s own revenue stood at Rs10 billion while the revenue of Sindh and Punjab was more than Rs100 billion annually.
“I will try to introduce technology in the revenue collection that will not only increase revenue but will also bring transparency,” said the minister.
The document shows that Rs29 billion has been spared for the districts’ annual development programme out of the provincial ADP.
The government has planned creation of 6,584 posts in different provincial departments including 3,188 in police department.
The finance department will seek consent of the cabinet to initiate the process of cost cutting in the current and development budget as well as suggesting measures for revenue enhancement.
In this connection, the proposed finance bill carries increase in taxes and duties on services etc. For this purpose, the excise and taxation department has identified few potential revenue generating services that would be reflected in finance bill.
The government anticipates Rs1.53 billion income in this regard.
The finance department has proposed complete ban on creation of posts except the ones required for completed developmental projects.
The document shows that there shall be complete ban on treatment abroad on the government expenses, on purchase of new vehicles except ambulances, earth moving machineries, fire trucks, tractors and non-luxury police vehicles etc.
Published in Dawn, October 15th, 2018