ISLAMABAD: Advisor to the KP Chief Minister on Finance, Muzzammil Aslam, said that instead of cutting its own expenses, the federal government is reducing the funds of the provinces. He stated that Rs. 5,147 billion in non-tax revenue also goes to the federal government.
Advisor to CM KP further stated that the federal government has estimated Rs. 19,238 billion in total income, though that target is never achieved. Out of that, Rs. 8,200 billion is to be given to the provinces, leaving Rs. 11,072 billion with the federation. The federal government’s claim that the provinces receive 41.5% share under the NFC is completely dishonest and false because the Rs. 5,147 billion in non-tax revenue goes entirely to the federation and is not shared with the provinces.
He further said that the federal government’s expenditure this year is Rs. 17,593 billion, of which, in principle, 15–20% should be allocated for development, but in reality, only Rs. 1,000 billion has been earmarked for development projects. It is now being reported that, due to lack of funds, the federal government plans to reduce the development budget by Rs. 300 billion, bringing it down to Rs. 700 billion. “How can anyone expect economic improvement in such circumstances?” he remarked.
During the press conference at the Khyber Pakhtunkhwa House in Islamabad, Muzzammil Aslam stated that Rs. 8,207 billion of the government’s expenditure is going towards interest payments. Although Pakistan’s interest rate has come down from 22% to 11%, the government’s funds are still being consumed by debt servicing due to flawed policies.
He added that, compared to the provinces, the federal government has the fewest employees, yet its pension bill this year is Rs. 1,055 billion.
Muzzammil Aslam said that the federal government wants to reduce provincial funds because its own expenses are too high, but due to poor policies, its system is incapable of improvement.
He added that due to a single wrong decision regarding IPPs (Independent Power Producers), the country has already paid Rs. 5,100 billion.
He questioned why the losses caused by the federal government’s flawed policies should be borne by the provinces and the public.
Muzzammil Aslam said that in the last four years, the federal government has borrowed Rs. 35 trillion, out of which Rs. 4 trillion was not spent on development projects. “We are borrowing to pay interest; how can that improve the economy?” he asked.
He stated that over the past 78 years, Khyber Pakhtunkhwa’s total debt stands at Rs. 775 billion, but in the last 18 months, the province has saved Rs. 300 billion. If this saving is offset against the debt, the province’s debt burden could be reduced by 40%.
The advisor added that Pakistan’s total debt is Rs. 78 trillion, and if arrears are included, it amounts to Rs. 94 trillion.
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He said that in the last three months, foreign direct investment (FDI) amounted to $447 million, while profits of $751 million were repatriated abroad. “On one hand, investment doesn’t come in, and on the other, whatever comes in leaves the country as profit. Various companies are exiting Pakistan,” he added.
He added that the federal government has floated the idea of the 27th Constitutional Amendment, while the meeting of the 11th NFC (National Finance Commission) was scheduled for August.
