TABLE OF CONTENTS TABLE OF CONTENTS CHAPTER DESCRIPTION PAGE GENERAL ABSTRACT 20132013----20142014 General Abstract of Revenue s & Expenditure for the Year i 2013-2014 Budget at a Glance ii Summary Position of Revenues for the Year 2012 -13 & iii 2013-2014 Summary Position of Expenditure for the Year 2012 -13 iv & 2013-2014 20122012----20132013 AN OVERVIEW 1 Current Revenue Expenditure 1 2 Sectoral Expenditure 4 3 Provincial Revenue Receipts 16 4 Capital Receipts and Expenditures 22 5 Local Government Act 2012 29 GROWTH AND DEVELOPDEVELOPMENTMENT 6 Hydro Electric Power Potential 32 7 Revenues from Oil and Gas 37 8 7th National Finance Commission 44 PUBLIC FINANCIAL MANAGEMENT 9 Public Financial Management (PFM) 48 10 Bank of Khyber 60 11 Funds Management 66 12 Annual Development Programme 2013-14 71 www.financekpp.gov.pk TABLE OF CONTENTS TABLE OF CONTENTS ANNEXURES DESCRIPTION PAGE I CDL Liabilities as on 01-07-2013 109 II Detail of Premature Debt Retirement 110 III Foreign Exchange Loan Liabilities as on 01-07-2013 111 Disbursement of Loans in R/o of Ongoing Foreign IV 113 Projects Share as on 30-06-2013 V General Revenue Receipts 114 VI Current Revenue Expenditure 117 Development Budget by Sector for the Year 2012-13 VII 119 & 2013-14 Annual Development Programme Since 1971-72 on VIII 124 ward Growth in Current Revenue Budget & Revenue IX 125 Receipts Since 1974-75 on ward Grant Wise General Abstract of Current Budget for the X 127 Year 2013-14 www.financekpp.gov.pk FOREWORD White Paper reflects the Provincial Government’s policies and presents an overview of the financial position of the Provincial Government. It provides a summary position of revenues from all sources (Revenue & Capital) and estimated expenditure of all the departments. It also presents a comparative analysis of the estimates for the Financial Year 2013-14 with those of Financial Year 2012-13 along with detailed analysis of the Annual Development Program. It is envisaged that the inside provided by this document, will enable the reader to formulate an informed opinion about the Budget Estimates. 2. While formulating budget for the Financial Year 2013-14 due concentration has been emphasized on effective and efficient resource allocation, need based prioritization of spending, performance and monitoring. The budget for the Financial Year 2013-14 has been devised to promote Economic Growth and Development in the Province. The budget has been prepared in consultation with all stakeholders to seek their guidance in the preparation of a business friendly budget. 3. In order to improve the service delivery outcomes and strengthen the Public Financial Management system of the province, the Output Based Budgeting under MTBF shall continue in all provincial departments. The Output Based Budget unlike traditional incremental budgeting allocates resources to strategic priorities of the government and links departmental outcomes, outputs, targets and indicators. 4. It gives me immense pleasure to highlight the success stories of District Conditional Grants Programme that was extended to six districts. The overarching objective of introducing Conditional Grants is to improve Service Delivery in Education and Health Sectors at the grass root level and tie operational budget with better results. In Budget Estimates 2013-14 Rs. 1.00 billion are allocated for successful continuity of the programme. www.financekpp.gov.pk 5. In order to achieve a sustainable improvement in the coverage and quality of frontline public service delivery through the active involvement of local communities, the Govt. of Khyber Pakhtunkhwa approved “Community Driven Local Development Policy and Frame Work”. Community Driven Local Development initiatives operates on the principles of local empowerment, participatory governance, greater downward accountability and will be initiated in six districts of Malakand Division in cooperative with European Union’s budget. 6. The budget support funds, for the next Financial Year is based on the vision and strategic directions of the new government, especially of the Honorable Chief Minister, Khyber Pakhtunkhwa, Mr. Pervez Khattak and Minister for Finance, Mr. Siraj-Ul-Haq. I am thankful to them for their support and guidance at every step of the budget formulation. 7. I avail this opportunity to acknowledge the dedication and hard work put in by the Officers/officials of Finance Department to accomplish the time bound uphill task of budget preparation. I am grateful for the unrelenting support provided by the line departments, in the compilation of the white paper, and other budgetary documents. (SAHIBZADA SAEED AHMAD) Secretary Finance Government of Khyber Pakhtunkhwa 17 th June, 2013 www.financekpp.gov.pk GENERAL ABSTRACT OF REVENUES AND EXPENDITURE 2013-2014 (Rs. In Million) Budget Budget REVENUES Estimates EXPENDITURE Estimates 2013-14 2013-14 A-General Revenue Receipts A-Current Revenue Expenditure Federal Tax Assignment 198,269.368 General Public Service 59,694.034 1% of Divisble Pool for 23,823.481 Civil Defence 59.449 War on Terror Straight Transfers 27,495.741 Public Order and Safety Affairs 30,028.891 GST on Services (Provincial) 6,000.000 Economic Affairs 17,524.015 Provincial Own Receipts 8,559.263 Environmental Protection 29.571 (Tax & Non Tax) Net Profit from Hydel Power Generation 6,000.000 Housing and Community Amenities 4,293.132 Arears of Net Hydel Profit 25,000.000 Health (Excluding Health Education) 19,108.777 Hydel Power Own Generation 2,361.256 Recreation, Culture and Religion 737.289 Education Affairs and Services Population Welfare Programme 477.000 72,687.935 (Including Health Education etc) Social Protection 6,836.907 Total-A 297,986.109 Total-A 211,000.000 B-General Capital Receipts B-Current Capital Expenditure Recoveries of Loans & Advances 250.000 Repayment of Loans 8,710.000 Loans and Advances 6,290.000 Total-B 250.000 Total-B 15,000.000 C-Development Reciepts C-Development Expenditure Operational Shortfall 10,763.891 ADP including operational shortfall 83,000.000 Foreign Projects Assistance 35,000.000 Foreign Projects Assistance 35,000.000 Total-C 45,763.891 Total-C 118,000.000 Total Revenues (Account-I) 344,000.000 Total Expenditure (Account-I) 344,000.000 Receipts and Recoveries Capital Expenditure 98,000.000 98,000.000 (Account-II) (Account-II) www.financekpp.gov.pk i BUDGET AT A GLANCE (Rs.In Million) Budget Revised Budget Description Estimates Estimates Estimates 2012-13 2012-13 2013-14 A - GENERAL REVENUE BUDGET General Revenue Receipts 279,492.000 245,925.696 297,986.109 Revenue Expenditure 191,600.000 195,000.000 211,000.000 Net Revenue Account (Deficit/Surplus) 87,892.000 50,925.696 86,986.109 B - CURRENT CAPITAL BUDGET General Capital Receipts 250.000 250.000 250.000 Current Capital Expenditure 13,942.000 13,942.000 15,000.000 Net Capital Account (Deficit/Surplus) (13,692.000) (13,692.000) (14,750.000) C-Surplus for Development (A+B) 74,200.000 37,233.696 72,236.109 D - ADP FINANCING ITEMS Operational Shortfall - - 10,763.891 Foreign Project Assistance 23,258.000 10,759.510 35,000.000 Other Grants - 4,137.416 - Total ADP Financing Items 23,258.000 14,896.926 45,763.891 Resources for Development 97,458.000 52,130.622 118,000.000 Development Expenditure 97,458.000 88,130.610 118,000.000 Total Resources (A+B+C+D) 303,000.000 261,072.622 344,000.000 Total Expenditure (A+B+D) 303,000.000 297,072.610 344,000.000 Net (Deficit/Surplus) (Account-I) - (35,999.988) - General Capital Expenditure (Account-II) 87,786.372 31,184.966 98,000.000 Less Receipts and Recoveries (87,786.372) (31,184.966) (98,000.000) Net (Deficit/Surplus) (Account-II) - - - ii www.financekpp.gov.pk SUMMARY POSITION OF REVENUES FOR THE YEAR 2012-13 & 2013-14 (Rs.In Million) Budget Revised Budget Description Estimates Estimates Estimates 2012-13 2012-13 2013-14 A-General Revenue Receipts Federal Tax Assignment 183,684.937 160,564.157 198,269.368 1% Divisible Pool for War on Terror 22,071.058 19,292.930 23,823.481 Straight Transfers 22,157.543 19,924.970 27,495.741 GST on Services (Provincial) 9,886.394 4,289.590 6,000.000 Provincial Own Receipts (Tax & Non-Tax) 7,812.221 7,964.118 8,559.263 Net Profit from Hydel Power Generation 6,000.000 6,000.000 6,000.000 Arears of Net Hydel Profit 25,000.000 25,000.000 25,000.000 Population Welfare Programme 477.403 743.385 477.000 Hydel Power Own Generation 2,402.444 2,146.546 2,361.256 Total General Revenue Receipts (A) 279,492.000 245,925.696 297,986.109 B-General Capital Receipts Recoveries of Loans & Advances 250.000 250.000 250.000 Total General Capital Receipts (B) 250.000 250.000 250.000 C-Development Receipts Special Federal Grant PSDP (i+ii) - 2,446.515 - of which: i Grants - 2,411.635 ii. Loans - 34.880 Other Foreign Grants - 1,690.901 Foreign Project Assistance 23,258.000 10,759.510 35,000.000 Operational Shortfall - - 10,763.891 Total Development Receipts (C) 23,258.000 14,896.926 45,763.891 Total Revenues (A+B+C) 303,000.000 261,072.622 344,000.000 iii www.financekpp.gov.pk SUMMARY POSITION OF EXPENDITURE FOR THE YEAR 2012-13 & 2013-14 (Rs. in million) Budget Revised Budget Description Estimates Estimates Estimates 2012-13 2012-13 2013-14 A-Current Revenue Expenditure General Public Service 43,996.882 125,832.153 59,694.034 Civil Defence 83,839.264 - 59.449 Public order and Safety Affairs 28,783.827 29,856.936 30,028.891 Economic Affairs 11,376.305 12,450.499 17,524.015 Environmental Protection 22.479 22.455 29.571 Housing and Community Amenities 193.326 190.673 4,293.132 Health (Excluding Health