PESHAWAR: The Khyber Pakhtunkhwa government has demanded of the federal government to address the tribal districts and Sehat Card funding issues and ensure the transfer of net hydel profit on a monthly basis to enable it to sign the sought-after memorandum of understanding with it on fiscal responsibility.

The centre had agreed with the International Monetary Fund in the recent Memorandum of Economic and Fiscal Policies (MEFP)about the signing of a MoU by all provinces for the provision of around Rs750 billion‘cash surplus’.

KP finance minister Taimur Saleem Jhagra, in a letter to his federal counterpart Miftah Ismail on Wednesday, noted that the centre had shared the MoU on fiscal responsibility with the province, which would be placed before the provincial cabinet in due course of time.

He said for the signing of the MoU, the province needed the centre’s commitment on some of the issues, which were critical to the provincial government.

Monthly hydel profit transfer also sought

Mr Jhagra said the federal government should confirm the transfer of the Sehat Card programme for the residents of tribal districts to the provincial government along with the funding.

“These arrangements will continue until the National Finance Commission Award is revised or alternate formal mechanisms are in place to ensure that divisible pool funding for the tribal districts’ flows to the province,” he said.

The minister also said the federal government should confirm arrangements to increase the ex-Fata budget for the financial year 2022-23 to cover the ‘actual minimum cost’.

He said it was disappointing for the province that the budgetary allocation for tribal districts set by the federal government was done without any formal or informal engagements with it.

“The development budget was unabatedly reduced for the first time since the merger of the region with the province, and even more critically, the current budget was reduced from Rs77 billion to Rs60 billion,” he said.

Mr Jhagra said the amount was around Rs25 billion short of the minimum projected one leaving a potential budgetary deficit rather than a surplus.

He said if the province’s funding of the universal health insurance for ex-Fata residents was considered, the tribal areas’ budget would have a Rs30 billion deficit.

The minister said in the absence of an Updated NFC Award, Pakistan was in peculiar position as a federation.

“KP accepted the responsibility for mainstreaming merged areas through the 2018 merger on behalf of entire federation. However, the lack of national will for an updated NFC Award means that not a single rupee of the areas’ NFC Award share or the commitment tied to the merger of transferring of up to three per cent of the divisible pool to finance the development of the terrorism- hit region flows directly to the province as part of its share of the divisible pool,” he said.

Mr Jhagra also urged the federal government to commit the monthly NHP transfers based on the MoU signed by it and KP government in 2016.

He said the federal government should immediately revive the NFC Award as the current award was based on 1998 census and calculated on the basis of population and areas not including tribal districts.

“The MoU targets and conditions will be subject to the full extent of KP’s budgeted receipts of Rs1.332 trillion being received or generated by the province,” he said.

Published in Dawn, July 2nd, 2022

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