KP turns to domestic debt, Rs31.3bn proposed for FY25

May 27, 2024 (MLN): Khyber Pakhtunkhwa’s (KP) budget for the upcoming fiscal year 2024-25 shows proposed Domestic Debt receipts of Rs31.3 billion among the capital inflows, compared to zero in the revised estimates for FY24.

The budget, presented by KP Finance Minister Aftab Alam Afridi on Friday marked the province’s first budget exceeding the Rs1.6tr level.

According to the budget documents, the total receipts for FY25 are estimated at Rs1.75tr, which reflects a boost of over 20% compared to the revised estimates for FY24.

It is worth highlighting that KPK’s dependency in the ongoing fiscal year was all towards general revenue receipts and non-tax receipts.

Earlier in April, Muzzammil Aslam, Advisor on Finance to the Chief Minister of Khyber Pakhtunkhwa, also stressed the matter and highlighted that the province’s domestic debt stands at zero.

Read: KPK reports zero domestic debt: Muzzammil Aslam

However, the FY25 budget proposes an inflow of Rs31.3bn as debt through domestic sources, which although constitutes a meager 1.8% proportion of the total Rs1.75tr, is still noteworthy as a change.

Elaborating further, data for FY23 accounts shows debt inflows worth Rs222.8bn, which stood at a whopping 18.81% of the total receipts worth Rs1.178tr.

Hence, the estimated transition towards domestic debt raises concerns that it might reach alarming levels.

Regardless, the budget estimates propose a modest surplus of Rs100bn, with budgeted expenditures of Rs1.65tr for FY25, over 21% higher compared to FY24.

Read: KP govt unveils Rs1.75tr budget, 10% rise in salary & pensions

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