ISLAMABAD, Nov 28: The federal government has decided to help Balochistan overcome its financial problems by providing some ‘special funds’ immediately, said Prime Minister's Adviser on Finance Dr Salman Shah.

“Initially, we are doubling Rs100 million funding for every district of Balochistan under the special Khushhal Pakistan Programme,” he said.

Talking to Dawn here on Tuesday, he said the overall financial inflows of Balochistan would be improved so that it could meet its urgent financial liabilities.

“The centre will provide necessary support to Balochistan to improve its financial health,” he said.

Dr Shah, however, urged the provincial government to gear up its development activities to justify more assistance from the federal government.

Balochistan is facing serious debt trap and taking new loans to service old debts as its overdraft has touched highest ever -- Rs16 billion this month and interest repayments exceeded Rs250 million per month.

About Rs16 billion overdraft taken from the central bank, he said that he was meeting the officials concerned to look into the issue.

Dr Shah said that subventions for Balochistan under the revised National Finance Commission (NFC) award had been considerably enhanced. "Then we are offering them additional funds to carry out development projects across the province,” he added.

The vicious circle of loans in terms of overdraft and the federal government as cash development loan (CDL) is said to have forced the provincial government to freeze its current expenditure and development programme almost at the last year’s level. The overdraft is causing regular bleeding of over Rs250 million per month as repayment of loan and interest to ward off legal default.

"But this is a temporary upheaval and it should not cause any alarm,” Dr Shah said.