The provincial government lagged behind in implementing the budgetary plans the NWFP had chalked out for the 2001-02 financial year. It was an unusual year in many respects. The revenue receipts were short of the initially set estimates.
The development plan, other than the Khushal Pakistan Programme, remained a task too difficult to be implemented in toto. On the whole, the reduced payments on account of direct federal transfers made by the centre and non-payment of the net hydel profit share by the Water and Power Development Authority left the initially set budgetary plan of the NWFP government in shambles.
The fiscal distortions caused on account of heavy budgetary deficit rendered 2001-02 budget document of the provincial government useless and least dependable. Though the government failed in implementing its ‘three-year roll-over medium-term multi-sectoral reforms programme’, it kept fine-tuning the programme to get interest-free loan from the structural adjustment facility of the World Bank.
The government’s desire to attain financial stability by introducing economic measures, better management, reduction in province’s dependence on external resources through expansion in tax base and improvement in its own revenue dominated the activities of the provincial finance managers for most part of the fiscal year. How much they remained successful in attaining anything out of it appears to be a question which may follow lengthy answers from the concerned quarters.
The government had projected to raise about Rs44.1 billion total receipts for the year by posting its expenditure at Rs45 billion including Rs9 billion under the head of ‘unallocable’. Against the Rs14.328 billion net hydel share — projected under the NFC award — the province did not expect anything beyond Rs6 billion, a capped share amount it has been receiving for the last eight years. However, the province received only Rs1.71 billion during the 11 months and that too, not in toto. On the contrary, Wapda made book adjustment of Rs710 million against its claim of arrears payable by different departments, their attached wings, and semi-autonomous bodies of the provincial government. Never before, the utility had deducted at source from the net hydel profit of the Frontier province. Holding back the legitimate share of the NWFP by Wapda left negative impact on the development plan of the province. The government failed in arranging Rs3 billion from its internal resources to bridge the resource gap in its annual development programme.
The total size of the current year’s Annual Development Programme (ADP) — combining the Khushal Pakistan Programme, foreign funded schemes, development projects funded by the federal government and works to be funded through internal resources of the province — had been fixed at Rs7.98 billion of which Rs3 billion gap had to be bridged by the provincial government through its resources. Not only this, the provincial government failed in arranging funds and the budgetary deficit too, did not allow it to disburse the same among the newly set-up district governments for development, well in time. Financial support to the on-going development schemes came to an end as funds for the foreign-aided projects were released in March. The financial crisis experienced by the province had one dissimilarity from its past experiences as this time round, the district governments too, felt the financial squeeze. No amount of hue and cry raised by the public representatives could make any difference. Islamabad remained as non-responsive as ever. Even the military government could not make the NWFP’s voiced heard at the federal level.
After remaining without development funds for most part of the financial year, the district governments, 24 in number, appear to be facing a common dilemma. These have been directed to utilize, the Rs100 million released to each in March, before June 30, apparently a task near impossible for majority of the newly formed entities. Their failure to do so would deprive them of the funds.
The sitting government began work to execute the Rs6 billion Malakand-III power project by bringing it out from the cold storage and sticking to the previous government’s decision to execute the project by providing 50 per cent equity share and raising the rest through bank borrowings. Similarly, the federal government also gave green signal to start work on the Gomal-Zam dam which forms part of Wapda’s vision 2025. Serious reservations have been expressed against the viability of the dam with an estimated cost of more than Rs12 billion. The federal government appears determined to execute the project, in line with its hasty efforts to build new water storage projects, ignoring the objections that the reservoir of the dam would be able to store water for not more than 15 years due to heavy concentration of silt in its catchments area.
The provincial capital got a pleasant surprise on the allocation of funds for widening important and over-crowded roads. Though the road widening projects, being executed in Peshawar, have been well received on the part of the general public, the extent at which they caused cutting of old trees from the cantonment areas aroused concern of the environmentalists making them to ponder whether development by means of disturbing the green cover would be sustainable or not in a city which has been regarded by the Mughal Emperor, Baber, in his biography ‘Tuzk-i-Babri’ as the city of flowers.