Revenue, foreign aid targets missed

PESHAWAR: The Khyber Pakhtunkhwa government’s revised budgetary estimates for the outgoing year show that the government has not only failed to get its due share from the federal government but also failed to achieve its own tax and non-tax revenue targets and to fully receive foreign aid.

According to an analysis of the non-governmental Centre for Governance and Public Accountability, the PTI-led government in Khyber Pakhtunkhwa estimated a sum of Rs371.3 billion to be received as federal transfers in 2015-16.

The amount is 76 per cent of the total budget of Rs487.9 billion for the year 2015-16. These transfers included federal tax assignment, one per cent divisible pool for war on terror, straight transfers, net profit from hydel power generation, and arrears on net hydel profit.

The analysis showed that that provincial own revenues receipts for the year 2015-16 were estimated at Rs54.4 billion or about 11.15 per cent of the total budget estimates.

This included provincial tax receipts of Rs22.6 billion and provincial non-tax receipts of Rs31.8 billion, while capital receipts were estimated at Rs15.25 billion which is 3.1 per cent of the total budget and included recoveries of loans and advances and recoveries of investment of hydel development fund.

The development receipts were estimated at Rs46.9 billion which is 9.6 per cent of the total budget and included foreign project assistance of Rs32.9 billion.

In his budget speech, the finance minister also presented revised estimates for outgoing year.

The revised budget estimates for the year 2015-16 shows that the revenue receipts were revised downward from Rs487.9 billion to Rs431 billion.

While the provincial government did not revise downward the federal tax assignment receipts, it heavily revised transfer of net profit from hydel power generation and arrears of net hydel profit.

Receipts of net profit from hydel power generation is now revised to Rs9 billion from Rs17 billion, while the receipts from arrears of net hydel profit is revised to Rs25 billion from Rs51.9 billion.

Similarly, the KP government also failed to achieve revenue targets in case of its provincial own revenue receipts.

The provincial own tax revenue receipts which were estimated at Rs22.6 billion is revised downward to Rs14.3 billion.

The provincial own non-tax revenue is now revised downward from an estimate of Rs31.8 billion to Rs11.2 billion.

The foreign project assistance which was estimated at Rs32.8 billion has been reduced to 16.8 billion, by almost by 50 per cent.

“This shows that government failed to get its due share from the federal government, failed to achieve its own tax and non-tax revenue collection targets and failed to receive the foreign project assistance. All this resulted in putting a huge cut amounting to Rs40 billion on the development spending in the province which is in dire need of social and infrastructure sector improvement,” it said.

CGPA programme manager Malik Masood said the provincial government needed to concentrate on achievement of its own tax and non-tax revenue targets in the coming fiscal year.

He said the government’s inability to receive the KP’s net and arrears of net hydel profits from the federal government was a cause of serious concern despite so much negotiation with the federal government.

The CGPA manager said the provincial government needs to actively engage with bilateral and multilateral donors to realise the promised foreign project assistance for the development of the province.

“The biggest responsibility of the provincial government is to increase own tax and non-tax revenue receipts to create fiscal space for more development,” he said.

When contacted, finance minister Muzafar Said insisted that the downward revisions of estimates occurred due to the overvaluation of revenues in the budget-making process.

He said the outgoing year’s budgetary estimates were not realistic and the government organisations were also not competent enough to generate funds to meet the target.

He said the government had worked out the recently unveiled budget in light of the experience and were hopeful of meeting the targets next year.