- Through a ‘widely-circulated’ letter, the KP govt expresses its inability to create budget surplus
- Miftah takes umbrage at the letter
Federal Finance Minister Miftah Ismail has expressed his disappointment over a letter that he received from Khyber Pakhtunkhwa Finance Minister through which the latter has expressed his province’s inability to create budget surplus due to the devastation wrought by floods in the province.
Addressing a press conference last midnight, finance minister said he had spoken to the KP Finance Minister Taimur Saleem Khan Jhagra who assured him (Miftah) that this letter was not sent to the IMF (International Monetary Fund). He said he invited Jhagra for a discussion on Monday and would give the province required funds for the FATA merger, etc. Miftah said he was disappointed by Pakistan Tehreek-e-Insaf (PTI) leader Fawad Chaudhary’s statement in this regard. He said the KP Finance Minister has written to him for resolution of long-standing issues of the province.
Miftah said the IMF might have taken note of this letter, “which is everywhere in media.” He added: “This is very surprising. When entire Pakistan is flooded, the provincial government is writing this letter which could have been written ten days later. What is the point of writing this letter? Does he [Jhagra] want to put Pakistan and Pakistan’s economy at stake? You [the KP government] are doing such politics when there are unprecedented floods and your’re doing it when the IMF board is going to take up Pakistan’s case.”
He accused former Finance Minister Shaukat Tarin of nudging the provincial governments of Punjab and KP to write such a letter.
Earlier, Khyber Pakhtunkhwa Finance Minister Taimur Saleem Khan Jhagra conveyed to Finance Minister Miftah Ismail of the province’s inability to generate budget surplus for the ongoing fiscal year due to the destruction caused by the floods and previously unresolved financial issues by the Center.
In a letter dated 26 August 2022 addressed to Finance Minister Ismail, Jhagra stated that this letter is a follow-up to his letter of July 6 this year to him (Miftah) on the same topic.
“When we last met, the federal government committed to resolve the province’s financial issues.” He added that in return, as committed, he obtained the authorization of the Chief Minister, for the province of Khyber-Pakhtunkhwa to sign on to the MOU and did so within 24 hours. “We did this in the greater national interest. However, in contrast to this, in the intervening period of almost two months, we have been unable to get time to meet either the minister or the secretary, even once. Let me remind you of the criticality of the issues.”
The provincial finance minister added that “perhaps most importantly, to resolve the budget allocations for ex-FATA, which, in the absence of an updated NFC award, are decided at the discretion of the federal government; (a) to resolve the issue of current budget allocations for ex-Fata, which are insufficient to cover even the monthly salary costs of existing employees; (b) to finance the transfer of the Sehat Card Programme for the residents of ex-Fata, in which the federal government has chosen to unilaterally deprive the six million residents of ex-Fata of health insurance; (c) to ensure adequate budgeting to cater to the needs of TDPs (Temporarily Displaced Persons) moved into out of districts camp because of operations against militancy followed by; (2) to commit to monthly NHP transfers based on the MoU signed between the federal government and the Government of Khyber-Pakhtunkhwa in 2016. Incidentally, this MOU was signed during the previous PML-N and; (3) for the federal government to immediately revive the National Finance Commission (NFC), so that these issues can be resolved more permanently: (4) for the federal government to also commit to immediately engage and resolve other financial issues with the Government of Khyber-Pakhtunkhwa.
“These include but are not limited to; clearing outstanding liabilities to the Pakhtunkhwa Energy Development Organization (PEDO); resolving the issues of energy wheeling; resolving the issue of WACOG, and the availability of natural gas to the province in line with Article 158; the financing of PESCO to develop transmission and distribution infrastructure in the province; and the commitment of the federal government to not delay execution of provincially funded PESCO and TESCO projects; and not substituting the federal excise duty with the petroleum levy without provincial consent, as this amounts to unilaterally reducing the size of provincial transfers from the total quantum of federal collections.”
He further stated that as per estimate that the overall impact of not resolving these issues is actually to create a Rs100 billion unfunded liability in the Khyber-Pakhtunkhwa budget.
Jhagra said that now the monsoon flooding that the province is currently facing has wreaked destruction in Swat, DI Khan, and Tank making the situation even more challenging, “but that may over the course of the next few hours and days, make the damage from this year’s flooding greater than the super-floods of 2010. The cost in terms of rescue, relief, rehabilitation, and building back is likely to run into the tens of billions.”
He concluded that “in these conditions and without the resolution of the issues highlighted previously, for the province of Khyber-Pakhtunkhwa to actually leave a surplus will be next to impossible.”
* Through a ‘widely-circulated’ letter, the KP govt expresses its inability to create budget surplus * Miftah takes umbrage at the letter
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