KP yet to decide on MoU with Centre for surplus budget

PESHAWAR: The Khyber Pakhtunkhwa government has not yet decided to sign an MoU with the federal government for the surplus budget, which is a pre-condition for an IMF loan agreement with Pakistan. The final decision on signing a surplus budget agreement for Rs175 billion will be made by the provincial cabinet. A provincial surplus is the amount provinces do not spend from funds transferred to them by the federal government.

A PTI government official has confirmed that the government has not yet decided to sign the MoU. However, the cabinet will decide to sign the MoU to facilitate an IMF loan in the next meeting. The federal government has asked the province to generate a revenue surplus of Rs175 billion in the current financial year.

“The provincial cabinet would decide whether to sign or not to sign the MoU for the IMF loan agreement. The government will consider, review and assess the financial situation and then make a final decision,” he said, adding that it was expected that the agreement with the IMF would be finalized in the current month but negotiations were still not completed. The IMF has demanded to do more.

When contacted, Muzammil Aslam, Adviser on Finance to Chief Minister, said the KP government had achieved the previous year’s surplus target of Rs100 billion and was confident that the new surplus target of Rs175 billion for the current year was achievable. However, the KP cabinet will soon deliberate on the crucial decision of signing the MoU for securing an IMF loan. He said the government was looking towards the release of funds from the federal government to achieve the surplus target.

As the federal government has set a revenue target of Rs12,900 billion, Aslam said now “we have to see how much revenue the federal government collects and how much the province gets”. He added: “If the federal government gives us the due share, the surplus target can be easily achieved because it is a realistic target.”