By: Javed Iqbal
The Azad Kashmir government presented a budget of 136 billion rupees for the current fiscal year, according to official papers from Azad Kashmir. Of which, twenty-eight and a half billion rupees are included in the development budget and one hundred and thirty-five billion rupees are included in the non-developmental budget. In other words, 28.5 billion rupees will be spent using a total of 135 billion. Regarding the revenue of the independent government, the Azad Kashmir administration required a total of 136 billion rupees for the current fiscal year, according to estimates. For which it is estimated to get grants of 74 billion rupees from the federal government. Another major source of income is estimated to be the revenue from tax collections which is estimated to be 90 billion rupees.
Due to Mangla Dam, the profit of twenty and a half billion rupees has been demonstrated as the third greatest income by purchasing inexpensive power and selling it to the public at a high price. The federal government pays this discrepancy out of its own money. On expected development projects, the federal government would spend 28.6 billion rupees, all of which will come from its own funds.
List of development programs/projects in Azad Kashmir:
The federal government has decided to give the administration of Kashmir 28.6 billion rupees from its own resources for development plans, according to the Federal Ministry of Planning. Additionally, the federal development budget for the current fiscal year will include two billion rupees for federal initiatives in Azad Kashmir. These projects include MBBS Medical College Mirpur, Mirwaiz Muhammad Farooq Shaheed Medical College Muzaffarabad, Nusasiri Laswa Bypass Road, rehabilitation of residents living along LOC, Water Supply and Drainage Scheme in Mirpur City and Hamlets, 40MW Dwarian Hydro Project at Neelum, 48MW Jagran II Hydro Power Project, Azad Kashmir Legislative Assembly Complex, Women’s University in Bagh, Optical Transmission Network Expansion Project, Project for Treatment of Poor Cancer Patients, Atomic Energy Cancer Hospital, Establishment of Pakistan Glacier Monitoring Network, establishment of PNCA center in Muzaffarabad, special program for eradicating blindness, ongoing projects for construction of Rathoa Haryam bridge over Mangla Dam in Mirpur.
“According to statistics, the federal government will provide 124 billion rupees of the total resources of 133 billion rupees for the current fiscal year, and the state governments will be in charge of providing the remaining 49 billion rupees”.
AJK: Without Government Resources
Azad Kashmir, unlike other provinces or regions in Pakistan, has no government resources of its own, according to official figures. However, the ratio of finances to the ratio of area to people in other provinces is substantially larger, which significantly contributes to the prosperity of the territory. If the available resources are distributed among the provinces and special areas, efforts are made to ensure better funding by the Azad Kashmir Confederation.
According to official statistics, Punjab province is fifteen times larger than Azad Kashmir in terms of area, but it is twenty-five times larger in terms of population, and it only has sixteen times as much money available as Azad Kashmir. This is done to give the impression that most of the resources are spent here. Sindh is eleven times larger than Azad Kashmir in terms of population and area. The statistics of the Federal Ministry of Finance show that Azad Kashmir receives one-tenth of it. Khyber Pakhtunkhwa province is now about eight times larger than Azad Kashmir in terms of population and province, but according to the data of the Federal Ministry of Finance, Azad Kashmir gets about one-eighth of KP.
The data shows that during the last fiscal year, the region of Azad Kashmir with an area of thirteen thousand square kilometers with a population of four million, received one hundred and thirteen billion rupees. In contrast, three hundred and seventy-four billion rupees were available to the province of Balochistan, with an area of three hundred and forty-seven thousand square kilometers with a population of two million.
These figures show that Balochistan, which is more than twice the size of Azad Kashmir in terms of population, but in terms of area, twenty-six Azad Kashmirs together form one Balochistan. It was given only three times more resources.
According to the Federal Ministry of Planning, the federal government has provided funds of one hundred and ninety-six billion rupees for development works in Azad Kashmir in the last nine years. Despite the severe financial crisis and IMF’s strict conditions, even for the current financial year, Thirty billion rupees of extra funds have been allocated for the development works of Azad Kashmir.
Series of funds allocation in AJK:
Twenty billion rupees in 2013, Twelve billion twelve crore rupees in 2014, Thirteen billion thirty crore rupees in 2015, Fourteen billion seventy crore rupees in 2016, Twenty five billion eighty four crores in 2017, Twenty five billion eighty five crore rupees in 2018, Twenty seven billion twenty six crore rupees in 2019, Twenty four billion fifty crore rupees in 2020, and Thirty two billion three crore rupees in 2021 were provided, while in the budget of the current financial year, funds of thirty billion and twenty crore rupees have been allocated for investment in Azad Kashmir.
On the other hand, the statistics of the Ministry of Finance of Azad Kashmir show that in ten years, the federal government has provided grants of three hundred and ninety one billion rupees to Azad Kashmir.
According to these data, it is estimated to get 74 billion and 35 crore rupees this financial year.
However, in the financial year 2021-22, sixty nine billion twenty six crore rupees, In the fiscal year 2020-21, fifty six billion ninety crore rupees, Ninety four billion rupees in 2019, Ninety four billion rupees in 2019-20, Fifty billion rupees in 2018-19, Forty billion rupees in 2017-18, Thirty one billion seventy six crore rupees in 2016-17, Thirty two billion twenty nine crore rupees in 2015-16, Twenty-four billion and twenty-seven crore rupees in 2014-15, and in 2012-13, twenty one and a half billion rupees were given in the form of different types of grants.
Despite 40% electricity theft, the Azad Kashmir government has made a profit of 128 billion rupees over the last ten years by purchasing cheap electricity and selling it to the public at high prices.
According to the records of the Azad Kashmir government, seventeen billion rupees in the fiscal year 2021-22, Sixteen billion ninety crore rupees in 2020-21, Thirteen billion seventy crore rupees in 2019-20, Thirteen billion thirty crore rupees in 2018-19, Ten billion rupees in 2017-18, Ten billion and twenty crore rupees in 2016-17, Nine billion rupees in 2015-16, Ten billion rupees in 2014-15, Ten and a half billion rupees in 2013-14 and in 2012, it has earned a profit of seven billion rupees.
Yesterday, Azad Kashmir government ministers Abdul Majid Khan, Chaudhry Arshad Hussain, Chaudhry Yasir Sultan, Dewan Ali Chaghtai, Chaudhry Akhlaq Ahmed, Chaudhry Azhar Sadiq and Malik Zafar Iqbal have rejected the increase in the electricity tariff of Azad Kashmir by the government of Pakistan, saying “The most recent increase in electricity tariffs is also a breach of the Mangla Dam Agreement, which was signed by the governments of Pakistan, Azad Kashmir, and WAPDA, and requires WAPDA to deliver electricity to the people of Azad Kashmir at reduced rates. Electricity rates are a contentious issue between the two governments that must be resolved in the context of facts and records and can never be imposed unilaterally”.
The Tehreek-e-Insaf Azad Kashmir government is either spreading nationalist propaganda or deliberately trying to link Imran Khan’s political war with Azad Kashmir’s financial affairs. Because the independent government is busy in propaganda instead of informing the people of any complete facts.
Issues connected to Federation regarding Mangla Dam:
We have three issues with the Federation regarding Mangla Dam:
Water charges, royalty and electricity tariff. There is no indication that the Federation is undermining the rights of Azad Kashmir if these issues are thoroughly addressed with numbers and figures. The construction of Mangla Dam started in 1962 and was completed in 1967, making it Pakistan’s second largest dam so far. It generates a maximum of 1500 megawatts of electricity which plays an important role in meeting Pakistan’s 22,000 MW electricity requirement. However, the production of electricity generated from Mangla is more or less depending on the water level in Jhelum river.
The Government of Azad Kashmir is the owner of the water flowing through its rivers. Pakistan has to pay a fee to use this water. It’s worth evolving with time. But, according to the terms of the current arrangement, the federal government is paying the Azad Kashmir government’s water fees at a rate of 42 paisa per cubic foot.
According to the Azad Kashmir government’s own statistics, the Azad government is expected to receive Rs 70 crore in this regard during the current financial year. In the last financial year also, only 70 crore rupees were received in this regard. Meanwhile, 68 crores in 2021, 65 crores in 2020, 1 billion ten crore rupees in 2019, 1 billion rupees in 2018, 1 billion twenty crore rupees in 2017, 1 billion rupees in 2016 and 74 crore rupees in 2015 were transferred to Azad Kashmir by the federation. The PTI government is now asking why the quantity of money collected in taxes decreased after the PTI government took office in the federal government, as opposed to when the PML-N government was in power.
Azad Kashmir has also been receiving the royalty of electricity generated from Mangla Dam for the past 55 years. This royalty is being given to the Azad Kashmir government in the form of cheap electricity. While constructing Mangla Dam, the Federation had promised to provide cheap electricity to Azad Kashmir which is still being implemented today. According to the available official records, the maximum demand of electricity in Azad Kashmir is up to 400 MW which keeps on decreasing. Three companies are supplying electricity to Azad Kashmir under the power transmission system. Most of Bhimber is supplied with electricity by Gujranwala Electric Supply. Mirpur, Kotli, Poonch divisions are supplied by Islamabad Electric Supply Company and Peshawar Electric Supply to Muzaffarabad and its adjoining areas. It should be noted that electricity rates are the same in all areas of Pakistan. However, cheap electricity is being provided to the Azad Kashmir government under the royalty on Mangla Dam.
Under the informal agreement of 2004, power was provided to the Azad Kashmir government at Rs 2.69 per unit. The rates for Lifeline customers (spending 100 units or less for six months) range from Rs 3.95 to Rs 7.74. Earlier this rate was Rs 1.57 which was applied for about 15 years. Currently, negotiations are going on between the federal government and Azad Kashmir regarding the electricity rate. The proposal is being considered by the federal government at Rs 4.71 per unit. There are several reasons why this rate is increasing.
Because WAPDA companies sell electricity based on production cost, therefore, the difference between the production price and the price received from the Azad Kashmir government is paid by the federal government from its own pocket in the form of subsidy. Although this amount is continuously increasing, however, according to the figures of the federal government, the federal government has to pay Rs 91 billion to these companies (which provide electricity to Azad Kashmir). And, these 91 billion rupees are also included in the total revolving debt of 24 hundred billion rupees.
According to the records of Azad Kashmir Ministry of Electricity, Azad Kashmir is currently buying 15 to 20 lakh units of electricity on a monthly basis. For which these three companies are paid 25 to 33 rupees per unit. This payment is made by the federal government. Azad Kashmir pays only Rs 2.69 per unit. The state government spends Rs 50 crore on electricity every month (which provides electricity to Azad Kashmir). It should be noted that there is a billing of more than three billion rupees in Azad Kashmir. While Azad Kashmir receives one and a half to one and a half billion monthly from customers due to its incompetence and black market. While the remaining electricity worth more than one billion rupees is stolen, From this point of view, on an annual basis, the government has an income of about 20 billion rupees in terms of electricity (Now where this income is spent there is no accounting).
These figures show that at present the federal government provides electricity worth 40 to 45 billion rupees annually to the Azad Kashmir government. And, in return, the Azad Kashmir government gives only 5 billion rupees.
It is also worth noting that Azad Kashmir has electricity theft and transmission losses of around 40%, which is higher than any region in Pakistan. And, this loss is also the main reason for load shedding in Azad Kashmir, the Department of Electronics, which earns billions of rupees, should pay attention to this.
Despite the pressure of the Mangla Dam Royalty Act to provide affordable electricity, this precedent was not allowed in other hydel projects in Pakistan. If we compare the royalties and water charges rate of Mangla Dam and Tarbela Dam in Pakhtunkhwa province, then KPK does not have the same electricity facility. Although Tarbela Dam is a large dam in terms of power and water storage capacity, its area has not become as developed and mini England as Mirpur. It is Mangla Dam’s magic that there are currently one million Kashmiris living in Britain and they are living a happy life.
To ensure that the relief provided to the state by the federation reaches the people in a meaningful way, Azad Kashmir must prevent electricity theft and corruption.
If the federation used the money it gives the government of Azad Kashmir each year for state welfare to actually build and develop the state, 80% of Azad Kashmir’s issues might be resolved. The current Azad Kashmiri government should prioritize addressing this crucial issue in order to achieve this.