Khyber Pakhtunkhwa government asks Centre to resolve financial issues before next NFC

Amid the growing financial deficit and constraints, Khyber Pakhtunkhwa government has asked the Federal government to ensure timely payment of net-hydel profit, and resolution other financial issues, before constitution of next National Finance Commission. It was also reiterated to make all out efforts and raise voice for due financial rights with support of political leadership of various parties.
"KP is being faced with enormous financial constraints due to increasing financial deficit, hovering around Rs 22billion, if the Centre would continue its delaying tactics in payment of net hydel profit, and other financial liabilities to KP, then the financial situation would get further weaken there, says KP Senior Minister for Finance Siraj-ul-Haq, while talking to media persons here on Wednesday.
Flanked by provincial secretary finance, director information, and other official of finance department, the Minister informed that the meeting of National Finance Commission, held under Finance Minister Senator Ishaq Dar in chair, which the all respective finance minister, including him attended it, wherein a seventh six-month report from July-to December (2013-14) approved.
During the meeting, he said KP financial issues and constraints, have discussed in wake of delay in payment of NHP and other financial dues and rights, Siraj-ul-Haq said. According to NFC formula, he said it was decided that provinces will get 57.5 percent of the vertical division of revenues, while horizontal distribution, KP would have received share around 14.62 percent as per NFC Award, while one percent on head of war against terrorism, which also outstanding with the Centre. In the total share in revenues receipt, he said the KP share is around 8.97 percent.
Before the start of current financial year 2013-14, KP Minister said the Federal Finance Ministry had estimated a total revenues receipt for KP, at Rs 2475billion, according to that estimation the Centre is liable to pay KP an amount of Rs 222.093billion. He said the KP current financial budget 2013-14, was prepared in light of estimation of the Ministry of Finance.
During the financial period 2013-14, he said the Federal government has issued less payment to Khyber Pakhtunkhwa and bring deduction the estimated revenue share, time-to-time without making consultation with the provinces. Owing to which, he said KP is facing a fiscal deficit of Rs 22billion, and situation would get worst if the centre not ensure payment timely to the province.
According to decision of arbitration commission, the Minister said the Centre is liable to pay Rs 110billion every year, with mark-up of 10 per cent annually. With the mark-up ratio, he said, is totalling an amount of Rs 56billion, so the federal government assured to payout this amount as well. In this regard, he said the Centre would call secretaries-level meeting after the presentation of Federal budget, to take necessary steps for resolution of financial matters of KP. The payments, he said, the Federal government will ensure in the next financial year 2014-15.
Under the constitution article 161 (1) (b), he said the excise duty is applicable on raw oil, but the federal government has failed to implement it, despite the passage of three-years. Of the total production of raw oil in the country, he informed that KP is producing around 40,000 barrel of oil every month, if the federal government would pay Rs 1000 per barrel as excise duty to KP, then it can approximately generate additional revenue of Rs 14.6billion. After the efforts of the provincial government, he said that Centre has assured after the overview all aspects and necessary implications, the amount would payout to the provinces. In this regard, he said a meeting will be held in July 2014.
The Minister informed that a sum of Rs 296.997million has been released in first-quarter of the financial year 2013-14, while in second quarter Rs 448.590million, and in third quarter releases of amount Rs 758.820million will be ensured within two to three days.
Siraj-ul-Haq said the provincial government had decided to collect infrastructure development cess through finance Act 2013. For this purpose, he added, it has completed all constitutional and administrative implications and matter. He, however, said the Federal government has assured the KP to remove all hurdles in implementation of infrastructure development cess, after which the province would have in position to generate hefty of revenue, as estimated Rs 2billion per annum. Due to better financial management, he said Federal government has awarded a bonus of Rs 1.5billion for first nine month of the current fiscal year 2013-14, as per decision of Council of Common Interest (CCI).