The Tale of Two Kashmirs

One rich, getting more aid per capita than any other state of India, and the other poor getting less from the Government of Pakistan


PaK Assembly tables Rs 47.33 bn budget for 2010-11



Tariq Naqash

MUZAFFARABAD: Finance Minister Pakistan Administered Kashmir Raja Nisar Ahmed Khan Friday presented Pakistan Administered Kashmir’s deficit but tax free budget for 2010-11.

The budget with a total outlay of Rs 47.332 billion is in sharp contrast to earlier reports that the total spending would hardly exceed Rs 35 billion due to reduced allocation by the central government for developmental activities.

The budget proposes Rs 36.157 billion for non-developmental expenditures and Rs 11.174 billion for development activities. Interestingly, the central government has so far indicated to provide only Rs 6.174 billion for developmental activities, including a foreign aid of Rs 658 million.

PaK is expected to generate Rs 11.672 billion from its internal resources, Rs 750 million from water uses charges of Mangla, Rs 4.5 billion as its 80 per cent share in taxes generated by the AJK Council from the PaK territory, Rs 6.68 billion as share in the federal taxes and the deficit between income and recurring expenditures, to the tune of Rs 12.555 billion, would be met by central government.

Earlier, as speaker Shah Ghulam Qadir gave floor to the finance minister to deliver his budget speech, an opposition lawmaker stood on a point of order and accused the government, among other things, of ignoring the opposition during preparation of the fiscal policy document. The opposition lawmakers kept on chanting noisy slogans amid desk thumping for about 10 minutes and then staged a boycott.

The finance minister acknowledged that the provinces had faced cuts in their budgets on account of central government’s financial constraints but PaK had never been subjected to cuts and instead its budget had always seen at least 10 to 15 per cent increase.

“However, this time round we have faced a divergent situation, possibly because of reduced share of federal government in the national cake under the new NFC award,” he said.

“This house is not oblivious to the problems and challenges we are coping with but nevertheless we are getting along. However, if we are given our share in net hydel profit, federal taxes, Jammu Kashmir State property and other income resources, we may not be in need of grant-in-aid and our government is sincerely struggling to get these rights,” the minister added.

He pointed out that Islamabad had earmarked Rs 10.752 billion for PaKs development budget for current year through ‘block allocation’ and apart from that Rs 6.493 billion had been separately allocated for PaK in the federal PSDP. However, in a sharp departure from the past practices, ‘block allocation’ and share in the federal PSDP had been merged into each other after reduction by 34 per cent and 62 per cent, respectively. Notwithstanding the cut, the last instalment of ‘block allocation’ to the tune of Rs 1.815 billion was yet to be released, he said. Furthermore, a special grant of Rs 245 million announced by Pakistan Prime Minister Syed Yousuf Raza Gilani for PaK lawmakers had also been deducted from the ‘block allocation,’ he added.

Practically, Khan said, Rs 4.71 billion had been released as ‘block allocation’ in the current year which had badly affected the entire development programme.

Regarding the next year’s block allocation, he said that although the Annual Plan Coordination Committee had agreed to provide Rs 7.55 billion, the National Economic Council (NEC) scaled it down to Rs 6.174 billion.

“The President, Prime Minister and Finance Minister of Pakistan have assured that they would provide more funds for PaK’s annual development programme; we are however left with no choice but to propose Rs 11.174 billion as the volume of our next ADP which includes a deficit of Rs 5 billion,” he said.

Regarding the non-developmental budget, he said the PaK government required Rs 35 billion for the current year but the federal finance division had agreed for Rs 29 billion which was far less than PaK’s needs.

Listing the raise given by the federal government in salaries and allowances of serving and retired employees as well as police personnel and judicial officers, the minister said PaK needed at least Rs 7 billion more to meet these expenditures. The deficit of the non-developmental expenditures would therefore rise to 12.555 billion from the existing Rs 5.555 billion which will have to be picked by the central government, he added.

Regarding the development budget, he asserted that special emphasis had been laid on communication, local government, education, health, hydropower generation and tourism sectors. However, as the development budget also faced deficit, actual allocations were less than the ones proposed by the minister.

Earlier PaK cabinet approved the budget at its meeting chaired by Prime Minister Raja Farooq Haider.