BUDGET 2020-21: Rs923bn KP budget focuses on health, tax relief.

Byline: Manzoor Ali

PESHAWAR -- The Khyber Pakhtunkhwa government on Friday unveiled the Rs923 billion budget for the financial year 2020-21 which focuses on improvement in the health sector and tax relief for businesses hit hard by the Covid-19 pandemic.

KP Minister for Finance Taimur Saleem Jhagra presented the budget in the provincial assembly. He told Dawn that fundamentally the biggest challenge in the wake of Covid-19 was to anchor fixed costs of the government. He said the cost of unfunded pensions was huge; Rs86bn allocation for pension in 2020-21 was one per cent back in 2005 that has now risen to 15pc.

'This is true at the Centre and in other provinces. I have put in a provision for borrowing; at this point we do not need to be shy of borrowing Rs47bn for development or social service spending,' he said.

Budget documents estimate the province's overall expenditure at Rs923bn, which includes Rs739bn for settled districts and Rs184bn for merged districts. Revenue estimates put the federal transfers at Rs477.5bn, which includes the province's share in the divisible pool, straight transfers and 1pc share from the divisible pool for war on terror.

Expenditure estimates for the next fiscal have been pitched at Rs923bn - Rs593b current revenue expenditure, Rs12bn current capital expenditure and Rs318bn development outlay. An amount of Rs360bn has been set aside for salary and pension and Rs88bn for current expenditures in the merged districts.

Rs318bn set aside for uplift projects, Rs124bn for health and Rs39bn for education; no increase in salary of govt employees; no new tax imposed; Rs24bn earmarked for tackling Covid-19

The documents note that the expenditure of Rs593bn was 12pc higher than last year's budgeted figure of Rs526bn.

Despite no increase in salary of government...