Govt increases indicative budget ceiling for G-B to over Rs83b

GILGIT: In response to a request from Gilgit-Baltistan (G-B) Chief Minister Gulbar Khan, the Federal Finance Division has raised the Indicative Budget Ceiling (IBC) for the region for the fiscal year 2024-25 to Rs83,870.2 million, marking a 38 per cent increase from the previous year’s allocation.

The IBC for the last financial year stood at over Rs61,000 million, indicating an increase of Rs23,000 million for the upcoming fiscal year. A notification issued by the Finance Division outlined the total allocation, which includes a Federal Grant-in-Aid of Rs68,000 million to the Gilgit-Baltistan Government and a Wheat Subsidy of Rs15,872 million. The notification also emphasized provisions for several key areas.

“Adequate provision has been kept in the Grant-in-Aid for Assistance Package for families of government employees, compensation cases of flood affectees from years 2020-22, and the arrangement of Local Bodies Election,” read the notification.

The increase in the IBC follows a special letter written by Chief Minister Gulbar Khan to the Federal Minister for Finance and the Federal Minister for Planning. In his letter, he highlighted the insufficient budget allocation for the Gilgit-Baltistan Block and Public Sector Development Programme (PSDP) projects, which he argued could lead to stagnation in the region’s developmental activities.

According to the letter, the Federal Ministry of Planning, Development, and Special Initiatives informed the Gilgit-Baltistan Government about the IBC for the upcoming fiscal year 2024-25. The notification allocated Rs21 billion for the Gilgit-Baltistan Block and Rs6.472 million for PSDP projects. The Chief Minister expressed concerns that the proposed budget was inadequate for the region’s needs, particularly given the ongoing and upcoming developmental projects.

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The Gilgit-Baltistan Government has utilized the entire development budget by the third quarter, adhering to prevailing financial regulations. However, the federal government has imposed a 10 percent cut on the development budget, and the fourth-quarter release for PSDP has yet to be issued, raising concerns about the potential impact on developmental activities.

Gilgit-Baltistan is unique in that a significant portion of its budget is spent on electricity projects and transmission systems, unlike other provinces and regions, where such responsibilities fall under WAPDA. The region’s throw-forward amount stands at Rs102 billion, with numerous mega projects requiring funding, including the 16 MW Naltar project, the 50-bed Cardiac Hospital in Gilgit, the 250-bed Hospital in Skardu, and various targeted schemes needing Rs4.9 million.

Additionally, the region needs Rs6 billion for projects such as the 26 MW Shagarthang project, the Nagar Highway, the Shounter Bypass, and inter-provincial corridors. The Chief Minister called for increasing the IBC for the Gilgit-Baltistan Block and PSDP to Rs36 billion and Rs2.623 million, respectively, warning that without this adjustment, the region’s developmental activities could come to a complete halt.

During a meeting with Federal Minister for Finance Muhammad Aurangzeb, G-B CM Gulbar Khan said that Rs5 billion has been provided out of the budget deficit of Rs18 billion for the current financial year 2023-24, but additional supplementary grants are required for the restoration of damages caused by floods and earthquakes and for the repayment of debts owed by the government. Therefore, supplementary grants should be provided to make payments possible in June.

The Chief Minister also emphasized the need for a financial agreement to permanently resolve the issues of Gilgit-Baltistan based on the NFC formula, similar to Azad Kashmir and other provinces. He highlighted that many public interest projects in Gilgit-Baltistan, such as schools, hospitals, and powerhouses, remain non-functional due to the non-creation of posts. Therefore, he said, approval should be given to create 10,000 new posts in the Federal Ministry of Finance based on the recommendations of the Gilgit-Baltistan Government so that these inactive projects can be made operational and the public can benefit from them.