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Khyber Pakhtunkhwa budget

June 09, 2012

IF the purpose of the 18th Amendment was to improve service delivery by devolving these responsibilities to the provinces then that purpose is clearly in jeopardy. For yet another year, the Khyber Pakhtunkhwa government has announced a budget that channels resources into current consumption while health and education languish. Moreover, revenue mobilisation has been brought down by Rs70m with the revenue target at Rs7.88bn. Salaries of government employees will rise by 20 per cent, and 8,300 more government jobs will be created. Likewise, the Annual Development Plan will rise to Rs97.4bn, an all-time high. Some of the government’s pressures are understandable. The salary increase is made necessary by a similar announcement by the federal government in its budget. The provincial government cannot allow too large a difference between the salaries of its officials and those of the federal government, and is therefore constrained to follow suit.

But what was the point of announcing a ‘laptop scheme’ of Rs1bn? And what good sense is there in budgeting this as a ‘pro-poor’ measure? Schemes for the poor are allocated a paltry Rs5.2bn, of which one-fifth is already eaten up by the ‘laptop scheme’. This is not in keeping with the spirit of the 18th Amendment. Neither is the lack of capacity to absorb incremental resources highlighted by the Rs9bn of unutilised foreign grants from last year’s pool of Rs16bn. The idea behind devolving services to the provinces was to improve service delivery by bringing the delivery mechanisms closer to the intended recipients. Instead it seems social services have become the victims of neglect given the political priorities of provincial governments. A four per cent allocation for education is to be lauded, but much more effort is required in this area. We understand it is election year, but a focus on governance cannot be allowed to waver on that account.