Khyber Pakhtunkhwa’s Finance Minister Taimur Khan Jhagra Friday withdrew the commitment of his province to run a surplus in the current fiscal year, a move that could potentially weaken Pakistan’s case for the resumption of the International Monetary Fund (IMF) program.
In a letter written to Finance Minister Miftah Ismail, a copy of which is available with ProPakistani, the provincial minister says that the federal government had committed to resolving major financial issues of Khyber Pakhtunkhwa (KP).
1. This imported govt doesn't need enemies. Their own party hierarchy & their chamchas in the press are enough to sabotage their own…
Why would the KP govt or I write to the IMF? Please read the letter I wrote to the Federal Finance Minister for yourself. pic.twitter.com/NTaPGoniym— Taimur Saleem Khan Jhagra (@Jhagra) August 26, 2022
Jhagra further highlights that “In return, as committed, I obtained the authorization of the Chief Minister, for the province of Khyber Pakhtunkhwa to sign on to the memorandum of understanding (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 2 months, we have been unable to get time to meet either with the Minister or the Secretary, even once. This despite repeated requests.”
The provincial minister also listed some of the key issues that remain pending. The issues listed include:
- Issue of budget allocations for ex-FATA.
- Commitment to monthly net hydel profit (NHP) transfers based on the MoU signed between the federal government and Khyber Pakhtunkhwa in 2016.
- Revival of National Finance Commission (NFC).
- A commitment from the federal government to immediately engage and resolve other financial issues with Khyber Pakhtunkhwa.
In his letter, Jhagra further says that the estimated overall impact of not resolving these issues will create a Rs. 100 billion unfunded liability in the Khyber Pakhtunkhwa budget.
He says that the recent flooding has caused destruction in the province and the damage from the floods is greater than that of the super-floods of 2010. He adds that the cost in terms of rescue, relief, rehabilitation, and building back is likely to run into the tens of billions.
“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,” Jhagra concludes.
Later, in a tweet, the provincial minister dispelled the notion that the province has written a letter to the International Monetary Fund (IMF) in this regard.
It is pertinent to mention here that back in July, the Khyber Pakhtunkhwa government signed the MoU regarding fiscal responsibility after the federal government agreed to address its issues.
The center had agreed in the Memorandum of Economic and Fiscal Policies inked with IMF to present a MoU duly signed by provinces for the provision of cash surplus by them.
