PESHAWAR: The Khyber Pakhtunkhwa government is facing a severe financial crisis and is on the verge of default.
The caretaker government is facing a deficit of 110 billion rupees this month in terms of salaries, pensions, development budget and non-salary budget. Only 13 billion rupees have remained in the provincial treasury of the province.
The Finance Department has refused to give advance salary and pension for the month of April to government employees on the occasion of Eid.
An emergency meeting of the Caretaker Cabinet has been called to discuss the issue of distribution of Eid advance salaries and pension.
50% of the ADP released, amounting to Rs 35 billion, has been partially de-punched due to non-availability of funds. Moreover, the payment of subsidy of 20 billion rupees of flour and provision of monthly non-salary budget for essential services is also due, the total amount of which is 9.6 billion rupees per month.
The federal government owes 238 billion rupees to the Khyber Pakhtunkhwa government. NFC arrears are Rs 19 billion, net hydel arrears are Rs 62 billion, FBR cross input tax is Rs 8 billion, the total difference of the merged territories after merger is Rs 144 billion, and gas and oil The royalty is about 5 billion rupees.
Finance Secretary Muhammad Ayaz confirmed to this writer that the KP government is making regular payments under NFC but so far the double salaries of this month have not been paid apart from the accumulated arrears.
He said that we are facing difficulty in payment of salaries, today we have requested only this one agenda item in the provincial cabinet meeting to decide whether we should pay the salaries before Eid or next month. On the 1st of
The Secretary has sent a note to the Chief Secretary, asking the Finance Department to allow the payment of salary/pension for the month of April 2023 on the first working day of the following month, not before Eid. The note states in the light of the provisions of Note of Rule 217 of the Federal Treasury Rules (Volume 1) that if a religious festival such as Eid-ul-Fitr falls in the last 10 days of the month of Eid-ul-Azha, the salary/pension shall be paid in that month. Employees and pensioners need to make advance distribution five days before the festival date. This year, Eid-ul-Fitr is expected to fall on 21st or 22nd April 2023.
The provincial treasury has been under severe pressure for the past one year. This can be inferred from the fact that 50% of the ADP issued has been partially de-punched due to non-availability of funds. Additionally, payment of Rs 20 billion flour subsidy, and monthly non-payment of essential services such as MTIs (Rs 3.3 billion), health cards (Rs 4 billion), peace and order (Rs 1 billion), provision of free Provision of salary budget. A total of Rs 9.6 billion per month is also due for textbooks (Rs 1.3 billion).
“Account-I balance was Rs 13 billion and the total salary/pension wage bill is around Rs 45 billion per month. The next tranche of federal transfer expected in mid-April is expected to be around Rs 20-25 billion,” the note said.
The secretary said that the consideration of payment of advance salary/pension during April would push the provincial government into default, even if flour subsidy and non-salary payments were somehow deferred.
The Finance Department is not in a position to pay advance salaries and pensions. It was suggested that due to the exceptionally difficult financial situation, the Finance Department may be allowed to pay the salary/pension for the month of April 2023 on the first working day of the following month and not before Eid.
