ISLAMABAD: The Finance Division has told a standing committee of finance that the share of AJK government in the divisible pool is 3.64 percent after AJK prime Minister complained that inflated electricity bills triggered protest in the Azad Jammu & Kashmir.
AJK Prime Minister Chaudhry Anwar-Ul-Haq, who on the invitation of the lately held Finance Standing Committee of the Senate turned up in the committee and stated that AJK has been adding 2,660 MW of electricity to the National Grid against its total requirements of 360 MW. Haq added the people of AJK are getting inefficiencies and mismanagement of DISCO in their electricity bills against electricity being produced in AJK. He also stated that no one is taking responsibility of Rs400 billion AJK dues on account of net hydel profit.
The Finance Division informed the committee in writing through an Office Memorandum OM that a new financial arrangement was reached between the government of Pakistan and government of Azad Kashmir in 2018. As per arrangement, the government of the AJ&K is entitled to receive variable grant in lieu of share from FBR taxes. The variable grant has been worked out based on multiple indicators as adopted in the NFC Award. The percentage so worked out is 3.64 per cent.
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The variable grant for the AJ&K government will be based on the provincial share in the divisible pool taxes and revenue deficit grant as provided in the financial arrangements of 1992 shall be discontinued.
The federal government also expects that government of the AJ&K will gear up its efforts for full exploitation of potentials available in the collection of tax and ensure income budgeting of the current expenditures realistically and will exercise utmost financial discipline and austerity on the analogy of the federal government.
With the enhanced variable grant and water user charges, sufficient resources would be available with the AJ&K government tor utilisation towards developmental activities in the area.
AJ&K government will exercise full financial autonomy by remaining within the resources availability position no additional grant shall be provided by the federal government for current expenditures.
The meeting was informed that federal government is providing for current and development expenditure of AJK government and Rs70 billion for current expenditure has been allocated for the current fiscal year against Rs59 billion allocated for the last fiscal year. Of Rs70 billion, allocated on account of current expenditure for the current fiscal year, Rs10.5 billion has been released as of August 2023, the meeting was further told.
Copyright Business Recorder, 2023
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