Daily Times

The Khyber Pakhtunkhwa government presented a Rs 249.151 billion budget for 2011-2012 on Saturday. On the surface the budget looks balanced as total revenue and total estimated expenditure is the same. In his budget speech, Khyber Pakhtunkhwa’s finance minister said that over Rs 87 billion were earmarked for food trading but he clarified that previously the amount allocated for food trading was shown as part of the total outlay, which was unrealistic. Thus, over Rs 87 billion were not included in the budget’s outlay as it was neither part of the revenue nor expenditure. Theoretically this amount is used for purchasing food crops and there is a difference between outlay and recovery. Since some food items are subsidised, recovery is low.

On the other hand, there is much emphasis on the Annual Development Programme (ADP). One-third of the province’s budget will be spent on the ADP. A usual aspect of the 2011-12 ADP is that it consists of 1,035 projects out of which 632 are ongoing while 403 are new. Due to the incapacity and inefficiency of implementation, more than 600 projects are still ‘ongoing’. Such delays lead to high costs. All provinces, including Khyber Pakhtunkhwa, need to focus on efficiency so that these high costs can be avoided and fiscal space created for new projects. Khyber Pakhtunkhwa has reduced the capital value tax on the sale and purchase of property from 4 to 2 percent “to give relief to the poor” as per the finance minister. Property is mostly owned by rich people, so it does not make sense how reduction in capital value tax on property will help the poor. Instead of reducing it, increasing this tax might have benefited the poor more. It is important that the rich pay their taxes instead of putting the burden of taxes on the common man.

Khyber Pakhtunkhwa is the biggest victim of the war on terror. It is because of this that the province’s share in funds specified for this war have grown by almost Rs 4 billion to Rs 18.022 billion. Terror attacks do not just take human lives, they also hit the security structure and the province’s infrastructure. Because of security concerns, there is a negative impact on investment and industry. The government has made a good decision to increase the budget in this regard. Like all provinces, Khyber Pakhtunkhwa has more money now because of the NFC Award. The Award has financially empowered all provinces. It is time that the provinces handle their own development needs and not rely on the federal government more than is absolutely necessary. *