PESHAWAR: The Khyber Pakhtunkhwa finance department has pitched the outlay of the province’s next budget at Rs979 billion, which is nine per cent more than the current fiscal’s.
The 2020-21 Integrated Budget Call Circular, which the finance department issued lately, shows that the budget for both settled and newly-merged districts in the current fiscal is Rs900 billion.
The document noted that the additional fiscal space had been caused by the multiple measures rolled out by the provincial government, especially removal of redundant posts, increase in the retirement age from 60 years to 63 years, improvement of the province’s own source revenue generation, and lower cost of doing business.
It said the provincial tax and non-tax revenue was expected to go up by 5.6 per cent to Rs56 billion in 2020-21 compared with the current year’s estimates.
Dept proposes ADP rationalisation, cost-cutting, steps for better payments from centre
Calling for better fiscal space, the document proposes cost-cutting, rationalisation of ADP, increase in revenue generation and contacts with the federal government for better payments for the province.
It said the province’s current budget was growing at high pace leaving reduced space for development portfolio and the government had planned to enhance fiscal space by exploring new areas for revenues mobilisation and curtailing current expenditures.
In the document, the finance department said several measures, including pension automation, revision of pension rules, higher age of superannuation, full human resource audit, and abolition of redundant posts, had been taken to reduce costs.
It called for the rationalisation of the annual development programme.
The department said every department required to rationalise its ADP keeping in view the ultimate objective of ‘bringing down throw forward to three years and reduce thin spreading’.
According to it, the throw forward period for all ongoing schemes has been reduced to under five years by reviewing and reducing scope of work, while departments need to ensure that any new schemes proposed for inclusion in the ADP have the throw forward of less than three years.
The department also underscored the importance of resolving key financial issues with the federal government to increase the province’s fiscal space.
It said the province needed to rigorously pursue the federal government for transferring its share of divisible pool and payment of full net hydel profit arrears in a predictable and timely manner.
According to it, the federal government needs to be approached for the formulation of the new National Finance Commission Award to give due consideration and importance to the fiscal needs of merged districts.
In order to increase the province’s own revenue, the KPRA has already has been place under the administrative control of the finance department to streamline collection mechanisms.
The document said effective measures had been adopted to modernise the provincial taxation regime into an integrated framework and boost collection from various sources.
It tentatively pitched the province’s ADP allocations at Rs334 billion.
Of it, the provincial component will be around Rs115 billion, merged districts ADP Rs26 billion, accelerated implementation programme for merged districts Rs64 billion, district ADP Rs46 billion and donor-funded projects Rs82 billion.
The document said a budget steering committee had been constituted with the finance minister as its head and additional chief secretary (planning and development) and secretary finance as members to streamline the budget-making process.