PESHAWAR, June 13: Financial management exercised by successive NWFP governments during the five-year term of the current National Finance Commission (NFC) award is likely to cast heavily on the Frontier province, senior government functionaries and financial experts apprehend.
Interviews conducted to officials holding high-level positions and financial experts from the private sector reveal that the successive provincial governments’ policy of introducing more and more austerity measures after every passing year, during the current NFC award’s five-year term primarily due to resource constraints, have not only badly affected the effectiveness of the provincial government’s departments and agencies, all the more the bids to reduce the size of the non-developmental budget remains a far cry.
Economic measures applied to curtail expenses on account of stationary, POL, ban on new recruitment, abolition of provincial government’s posts falling vacant and ban on creating new posts, even where required have badly affected the government departments’ efficiency and effectiveness.
Senior government functionaries apprehend that successive governments’ bids to control even the most essential expenses of the organs of the civil administration and their failure to improve the annual current revenue receipts of the province had risked the province’s financial interest in terms of its share in the federal transfers.
As per the actualized financial accounts of the provincial government, NWFP’s current expenditure stood at over Rs30 billion in the 2000-01 financial year, apparently less than the Rs47.9 billion current expenditure level permissible to the province as per the current NFC award’s fiscal projections.
The NWFP draws over 90 per cent of its annual current revenue receipts from the federal government and Water and Power Development Authority, leaving little financial independence for the province whose own provincial receipts have also failed to register substantial growth during the last five years.
However, independent financial experts believe that the provincial finance managers have adopted the easy path by resorting to spend much less than the actual requirements of the provincial government leaving the multi-billion rupee infrastructure in a shambles, at several places, and affecting the very performance and effectiveness of the government departments, their attached wings and semi-autonomous bodies.
“There is a general perception among the authorities concerned of the federal government that the NWFP has ample budgetary cushion because of which the successive provincial governments managed to kept on gradually bringing down the current expenditure,” said the sources, adding “this thinking on the part of the federal government’s finance managers may well appear to be very dangerous for the province.”
If the new NFC award, believed an economist having remained associated with the provincial government for quite some time, made the current expenditure figures’ of the four provinces as baseline for setting bench-marks under the same head for the next five years then the NWFP would certainly be at a loss.
According to Islamabad-based official sources, whereas Sindh and Punjab had recorded substantial increase in their respective current expenditures during the last five years by spending more with the help of overdraft taken from the State Bank, the NWFP preferred to keep its expenses at a level which the current NFC award had suggested for it for the 1997-98 financial year.
Besides, delayed payments made by Wapda to the NWFP — which has become a permanent feature for the five financial years — is also likely to weaken the NWFP’s case before the new NFC.
The province has been receiving a major chunk — Rs4 billion and above — out of its Rs6 billion annual capped share amount of net hydel profit during the last two months for the last three consecutive financial years.
“This has also made the province’s case very weak,” said the economist, adding that it gave the impression that the province could survive even without the money over and above the Rs6 billion capped share amount.
As per the current National Finance Commission, the NWFP is supposed to get over Rs57 billion as net hydel profit share during the five financial years starting form the 1997-98 financial years. However, against that the province is likely to get only Rs30 billion at the rate of Rs6 billion per annum — the capped share amount.