The Khyber Pakhtunkhwa government has meticulously deceived its public for three years by terming interest into what they call incentive bonus from the federal government for better fiscal management.
The Jamaat-e-Islami headed finance department has been taking interest from the federal government on KP developmental funds stored in the state bank but to keep the public in dark and hold their trust they have termed it incentive bonus for better fiscal management and keeping the better cash and balance in expenditures of the province. The finance department officials call it ‘interest’ which the federal government pays to KP for using its money stored in the State Bank.
An official of the finance department who requested not to be named said that what the government calls incentive bonus is the money the government receive as mark-up from the federal government for its unutilized developmental funds kept in the State Bank of Pakistan.
“The interest thing is not alarming or a matter of concern. What is important here is the huge amount, which if timely utilised in developmental schemes, could have brought more benefits to the province than the mark-up,” said the official.
The provincial finance minister Muzaffar Said himself called it Incentive Bonus in his post budget briefing to the media in the cabinet room. He state in his speech, “This year we continued our good performance and we got massive incentive bonus of Rs 4.377 billion which is more than the other province.”
The federal government, in order to meet its budget deficit, has been using the KP developmental funds money from the state bank for the past three years and in return is paying an interest at a 10.5 per cent mark-up.
Following the three year long trend, this year the government has placed Rs 2 billion in its general revenue receipts for the year 2015-16 expected to be received from federal government as incentive on surplus cash balance.
An official of the planning and development department told that the KP government has a historic trend of spending the developmental funds in the third and fourth quarter of the fiscal year thus the money remains untouched by the provincial government for at least half of the year.
“Only the running projects funds are utilised from the commencement of the year while the new projects take time in approval, tendering and completion of paper work,” said the official. “The government thinks it got the money as incentive bonus but this is only what the finance department calls it.
In reality it shows the failure of the government to utilise its developmental funds and give relief to the public. The finance department uses it to get rewards this year the department has more Rs5 million summery to the CM for honoraria for the department staffers,” said the finance department official.
Qaumi Watan Party (QWP) parliamentary leader Sikandar Sherpao also raised the issue on the floor of KP assembly during the budget session when he was analyzing the budget document. Sherpao said that the expected Rs 2 billion as incentive on surplus cash balance for the next year means the government is not prepared to utilize its developmental funds and instead it wants to get mark-up over it by keeping it in the bank.
Finance Minister Muzaffar Said was not available for comments on the issue.