PESHAWAR: Khyber Pakhtunkhwa has had to twice cut down its Annual Development Programme during the current financial year due to its zeal to overpitch the size of its revenue budget based on assumptions for political reasons, it has been revealed.

Initially, the PTI-led coalition government had pitched the size its ADP at Rs174.8 billion, hoping to get revenues from a number of sources based on assumptions.

This, officials attributed with the exercise at the time acknowledged, was done to inflate the size of the budget to get political mileage out of it.

`The chief minister was told time and again that the revenue targets were based on assumptions and were over-pitched and unrealistic,` a sen-lor official working at the finance department at the time told Dawn.

`But he was adamant. He overruled us. He thought he could generate resources from here and there but it turned out to be a pipe-dream,` he said.

`The entire budget was based on `ifs`. This isn`t the way you make budgets,` he argued.

The over-ambitious projections in the budget, which some officials like to describe as a virtual budget, having been made in the cyber space, however, did not materialise. The receipts from General Sales Tax are falling short of the projected Rs14 billion. The Provincial Own Receipts pitched at a staggering Rs37.12 billionhas alsofallen behind.

These receipts included the receipts from dry windfall of forests and penalty recovered from permission to sell illegally-cut timber and the outsourcing of development of a model city in Peshawar. Not a single penny came through from the proposed two measures.

A minister said the decision to grant approval for imposition of penalty and taxes on windfall was okayed at a cabinet on Friday a year after its inclusion in the budget 201516 for implement ation in the upcoming budget for 2016-17.Receipts from federal government on account of net profit from hydel generation and arrears of net profit from hydel generation pitched at Rs51.87 billion also did not materialise.

`There was never a hope that the federal government would honour its commitment. We knew it but the chief minister didn`t,` the official said.

If this was not enough, the government took yet another controversial decision of blowing away Rs15 billion of the total Rs27.56 billion of the Hydel Development Fund, releasing later it could not do so. `It was a bad decision,` the official said.

`The government realised that for it to utilise the funds for the ADP meant for development of hydel generation in KP, it would have to amend the law. Thank God it did not happen,` he said.

All this added to financial woes of the KP government, bringing tremendous strain on its resources and as a result affected its ADP, the official said.

`Had we not have a significant cushion in the salary budget, our ADP would have been zero,` another official involved with the budgetmaking process for 2015-16 said.

`The size of the salary budget wasover-pitched to provide for this kind of a cushion,` the official said.

`We l
`Now see what the results are,` the official continued. First, the ADP was cut down and revised downward from Rs174.88 billion to Rs142 billion by introducing a 20 per cent reduction in its size.

And when it didn`t work, the ADP was further slashed to Rs118 billion with the total reduction in its size coming to Rs56.8 billion, he added.

`A lot of the ongoing schemes have had to be dropped to make fiscal room.

`This wasn`t a prudent financial management plan. It was politics, pure and simple,` he said.

These officials say even in terms of utilisation of funds, while the government on Thursday claimed to have utilised 70 per cent of its resources, but if seen in the light of the actual size of the ADP, the utilisation comes down to just 42 per cent.

Officials say there has been a lot of debate at the highest level of the PTI leadership which, realising the mistakes of the past three years, now want to focus on KP`s development strategy in the last two years of the party government`s term in office.