PESHAWAR: In an unprecedented move, the Khyber Pakhtunkhwa government released 100 per cent development funds for the approved ongoing projects on the first day of the financial year 2021-22 on Thursday.

The released funds meant for both settled and merged tribal districts totalled Rs165 billion.

Addressing a news conference at the Civil Secretariat here, finance minister Taimur Saleem Jhagra and spokesman for the government Kamran Khan Bangash said for the first time in the history of the country’s financial management, a government had released development funds altogether.

Mr Jhagra said the release of the entire allocated funds would help change the country’s financial management approach.

“For the first time in the country’s history, 100 per cent allocations have been released for the ongoing development projects reflected in budget books,” he said.

The minister said the government had released the entire provincial development budget for both settled and merged districts on Thursday.

Minister says move to change financial management approach; province also receives Rs25bn net hydel profit

He said the initiative had addressed the frequent complaints of the government departments about the shortage of funds.

Mr Jhagra said up to 45 per cent of development funds were released in June.

“When you have to spend about half of development budget in a month, it will definitely affect the quality of spending,” he said.

The minister said it was a revolutionary step and would evenly spread the development spending throughout the financial year and ensure the funds’ utilisation in snowbound areas, where construction activities came to a halt in the winter season.

He said the initiative would also create an atmosphere of competition between government departments and it would the prerogative of the chief minister and provincial government to re-appropriate the funds of those departments, which failed to spend their allocations.

Mr Jhagra said the government’s decision to release 100 per cent funds for the ongoing projects would shift the responsibility to the government departments, which would no longer be able to complain against the finance department about non-provision of funds.

He also said the federal government had paid a tranche of Rs25 billion in lieu of the net hydel profit arrears.

The minister said the opposition parties, in budget speeches, had raised a hue and cry over the delay in payment of NHP arrears.

“Prime Minister Imran Khan’s Pakistan is a fair Pakistan and it was reflected in his speech on Wednesday,” he said.

Mr Jhagra said Chief Minster Mahmood Khan had always promised to go to any extent to protect the rights of the province.

He said NHP was the province’s biggest source of revenue and last year, the provincial and federal governments had agreed on the regular monthly payment of Rs3 billion under an institutional mechanism.

The minister said the province received Rs3 billion NHP regularly under the arrangement.

“At the end of the last fiscal, our NHP arrears amounted to Rs36 billion. The federal government, in light of the commitments of Prime Minister Imran Khan and federal finance minister Shaukat Tareen, has made an extraordinary payment of Rs25 billion to our province on the first day of the new fiscal,” he said.

Mr Jhagra thanked the federal finance minister and said when decisions were made to institutionalise the federal and provincial governments’ relations, they had good impact on bilateral financial management.

He said it was the biggest NHP release in the history and such moves improved the centre-province relations.

“The credit for this decision goes to the prime minister,” he said.

The minister said the federal finance minister had also promised to clear the other arrears of over Rs10 billion in two installments.

He said the developments showed the dynamism of the provincial government’s financial management on one hand and the fairness of the centre’s conduct towards the province on the other.

Published in Dawn, July 2nd, 2021