KP govt unveils Rs1.1 trillion tax free, relief-oriented budget

| Rs371b allocated for ADP | Widows pension increased by 100pc | All-out efforts for providing relief to masses: Mahmood

PESHAWAR   -   The Khyber Pakhtunkhwa government on Friday unveiled a tax free and relief- oriented, largest ever, budget for financial year 2021-22, with a total outlay of Rs 1.1trillion, allocating Rs 371billion for next Annual Development Programme.

While presenting the annual budget for next fiscal year on the floor of the Provincial Assembly, Khyber Pakhtunkhwa Minister for Finance, Taimur Jhagra claimed that no new tax was imposed in the fiscal budget and maximum relief would be provided to the masses.

He said the budget expenditures for next financial year is estimated at Rs 1118 billion, in which Rs 199 billion allocated for the merged tribal districts, Rs 371billion for Annual Development Programme, and Rs 100 billion for merged tribal districts Annual Development Programme.

The special budget session was chaired by Speaker Mushtaq Ahmad Ghani, which was attended by Khyber Pakhtunkhwa Chief Minister Mahmood Khan besides other provincial Ministers.

Pension expenditure has increased by 100 per cent in the last few years, said Minister of Finance Taimur Jhagra while addressing the budget speech here in the Khyber Pakhtunkhwa Assembly.

Giving detail of the pension expenditure, he said that it was only 1 per cent of the budget in 2004-05, now it is 13.8 per cent this year. The pension system is being reformed to reduce extra expenditure, Jhagra added.

The Minister informed that minimum age for retirement in the province was kept 55 years and service limit is 25 years, which ultimately will save a huge amount of Rs 12billion annually.

He said by reforming the pension rules and reducing the number of pension beneficiaries will save an additional Rs One billion annually, and the pension of deceased employees will be given to their widows, parents or children.

He also said that the widows pension is being increased from 75 to 100 per cent and provincial government is making further reforms for contributory pensions.

The Finance Minister Taimur Jhagra in his speech said that minimum monthly wage of labourers in the province has been raised to Rs 21,000.

Similarly, out of a total Rs 371 billion ADP, the Khyber Pakhtunkhwa government earmarked a huge amount of Rs 270.7 billion for settled districts and Rs 100.3 billion for merged tribal districts for financial year 2021-22.  

Likewise, an amount of Rs 648.3 billion earmarked for settled districts and Rs 99 billion for merged districts in total allocation of Rs 747.3 billion for current budget expenditure.

Jhagra claimed that the present budget was based on five main points include a record increase in salaries of government employees, development budget, devoted services to people, increasing Khyber Pakhtunkhwa’s own resource revenue and introduction of goal oriented reforms and innovation in the overall governance system.

The Minister further said that two innovative approaches ‘development plus budget’ and ‘service delivery budget’ were being introduced under which Rs 500billion would be spent on former focusing mega projects such as Sehat Plus Cards, provision of furniture to government schools and increase in medicines budget to public sector hospitals, while Rs 424 billion out of Rs 747 billion would be spent on the latter with priorities to payment of salaries of doctors, nurses and teachers besides provision of medicines to hospitals and ambulances and fuels to Rescue1122.

About the generation of income and revenue during 2021-22, the Finance Minister said that Rs 1018billion revenue and income target was set for FY that would be achieved from different financial resources, duties and taxes.

He also said that Rs 475.6 billion would be collected through federal taxes, Rs 57.2 billion through federal divisible pool of 1 per cent share under terrorism affected province, Rs 26.5billion under Gas and Oil royalty and surcharge (direct transfer), Rs 74.7 billion under net hydel profit (according to an MoU 2015-16) and arrears.

In the budget speech, the Minister said that a sum of Rs 75billion for provincial tax and non-tax revenue, Rs 85.8billion through foreign development assistance (for settled areas) and Rs. 3.3billion (for merged areas), besides Rs. 187.7billion under special assistance grant for merged areas and Rs. 132.5billion from other revenue resources.

About details of budget expenditure during financial year Jhagra said that a total of Rs. 374billion would be spent on salaries including Rs 60billion in merged areas and Rs. 314billion in already settled districts.

Similarly, an amount of Rs 92.1billion would be utilised for payment of pension.

Besides salaries, an amount of Rs 203.9billion would be spent for operation and maintenance expenditures, emergencies and district expenses including Rs 38.9billion for merged areas and Rs. 164.9 billion while Rs. 74.4billion for other current expenditures.

A total of Rs 244.6billion proposed for expenditures under provincial Annual Development Program including Integrated Implementation Programme (IIP) for merged areas, he said ,adding, that Rs 17.4billion earmarked for ADP including Rs 2.4billion for merged areas and Rs. 85.8billion for settled districts while a record Rs 19.9billion to be obtained from Federal government PSDP, says the budget document.

According to the budgetery document, the salaries of all government employees except those who didn’t get special allowances are being increased by 37 per cent including 20 per cent increase in Functional or Sectoral Allowance, 10 per cent increase in Adhoc Relief Allowance, and 7 per cent in house rent for those employees who don’t benefited from government’s accommodation scheme.

Jhagra said that 100 per cent increase in pension expenditure was made during the last couple of years and the share of pensions, which was only 1 per cent in 2003-04 has now jumped to record 13.8 per cent of total budget in 2021-22.

To overcome the pension expenses, he said two proposals including an increase in upper age limit of government employees i.e. 55 years for early retirement or completion of 25years service were under consideration that would save an amount of Rs 12 billion per year.

The Minister also announced that provincial govt will give interest-free loans ranging from Rs 20,000 to Rs 1 million, to 25,000 youth.

He said that the total outlay of the budget of the third largest province of the country population-wise is Rs1.118 trillion, with record development budget of Rs 371billion for next fiscal year.

He informed that Rs 199 billion are allocated for the merged districts, previously known as FATA, while Rs 919 billion have been set for the rest of the province.

Similarly, for the Prime Minister’s Ehsas Programme and Universal Health Insurance coverage, Rs 10billion allocated for wheat subsidy, Rs. 10billion proposed for food baskets for poor people, Rs 10billion for revival of business of corona affected Small Medium Entrepreneurs (SMEs), Women, Minorities and Youth through the Bank of Khyber.

Likewise, Rs. 10.4 billion allocated for FY2021-22 to bridge the gap between developed and under-developed districts of the province under Rs 61billion district development project, besides Rs 2.6billion earmarked for honoraria to Khateebs of about 20,000 mosques across the province.

To increase economic activities and revenue, the Khyber Pakhtunkhwa government proposed to decrease the tax ratio on 12 categories items and extend the lowest tax ratio on 17 categories items under the Khyber Pakhtunkhwa Revenue Authority (KPRA) and exempted the agriculture sector from agri tax obtained by the Board of Revenue for next financial year, the document said.

Similarly, exemption viz a viz decrease in registry and CVT taxes announced to provide relief to people associated with construction industry, besides cancellation of professional tax, reduction of fee for vehicle’s registration to one rupee and free re-registration, mentioned in the budget book.

In the budget speech, the Minister for Finance Taimur Jhagra said that the rate of property tax was further reduced to benefit those who regularly pay taxes besides facilities of free archives, libraries, and hostels for students of higher education and free admission to students seeking admission in primary and secondary government’s schools announced.

Similarly, small farmers were exempted from land taxes.

Chief Minister Khyber Pakhtunkhwa Mahmood Khan has termed the provincial budget for financial year 2021-22 as a balanced, pro poor and a historic budget and said that this is the largest-ever budget in the history of Khyber Pakhtunkhwa, adding, that all the sectors have been fully focused in the budget which on implementation, would bring about a new era of development in the province and visible positive change in the lives of the masses.

He said this was a tax-free budget as no new tax had been levied rather historical exemptions were given to different sectors ,adding, that despite difficult financial situation, the provincial government did not compromise on the developmental portfolio, and Rs 370 billion have been allocated for the developmental projects which is 33pc of the total budget.  

He said that special focus has been given to the ongoing developmental projects of public welfare so as to complete these projects well in time for which 80pc of the developmental budget has been allocated.

In a statement issued here regarding the budget for the financial year 2021-22, the Chief Minister said that all possible efforts had been made to provide maximum relief to the common man in the budget.  

He added that enhancement of development portfolio, reforms in provincial taxes, increase in the salaries of government employees and pensioners, relief to farmers, honorarium for Aaima-Karam, enhancement of education and health sector budget, increase in the monthly wages of daily wagers, subsidy for providing wheat flour on cheaper rates to public, food basket programme for deserving people were some important relief initiatives proposed in the budget.  

He said that Rs 20 billion had been allocated for food basket programme and wheat flour for subsidy.

The Chief Minister said that social sector has been the top most priority of PTI government from the very first day ,adding, that budget of education, health, drinking water and other social sector has been increased manifold in the new year budget.  

He termed the Sehat Card Plus Scheme a flagship project of the provincial government and said that various initiatives have been proposed to make it further comprehensive ,adding, that free liver transplant had been included in the scheme whereas free Blood Transfusion is also being covered in the scheme.  

Similarly, Mahmood Khan added that under the Sehat Card Plus scheme in merged areas, annual coverage has been increased from Rs 0.6 million 1.00 million per house hold.

He said that despite the difficult financial situation, significant increase has been made in the budget of various sectors ,adding, that as compared to the last financial year, Elementary & Secondary Education budget has been increased by Rs. 24 billion, Health budget by Rs 22 billion, Police budget increased by Rs 12 billion, Tourism & Sports sector budget increased by Rs 11 billion and Local Government budget increased by Rs 6 billion in the new year budget.

The Chief Minister congratulated the Provincial Minister Taimur Saleem Jhagra and his entire team for preparing a balanced and historic budget.

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