By: Zulfiqar Ali (Kashmir Investigation Team)
MUZAFFARABAD: Pakistan has increased the annual variable grant given to Azad Jammu and Kashmir (AJK) by Rs 35 billion for the Fiscal Year 2025-26.
In the outgoing fiscal year, this grant was Rs 105 billion, which has now been increased to Rs 140 billion. This increase is considered the largest increase in a single year in recent years.
During the financial year 2024-25, the federal government provided Rs 108 billion in power subsidies to Azad Kashmir. Interestingly, this year, power loss in Azad Kashmir was more than 42 per cent, including 25 to 28 per cent technical losses and 14 to 17 per cent theft.
Pakistan had to pay a subsidy of more than Rs 45 billion on this wasted electricity.
For the next fiscal year 2025-26, Rs 74 billion has been allocated under the electricity subsidy. In the same year, Rs 32 billion is being given to Azad Kashmir in the form of development grants, including foreign aid.
Furthermore, Pakistan has also allocated billions of rupees under the Public Sector Development Program (PSDP) for projects that the Government of Pakistan has directly initiated or is going to initiate. These include Rs 9 billion allocated for three Danish schools.
During the fiscal year 2024-2025, Pakistan provided Rs 28 billion for infrastructure development in Azad Kashmir and Rs 3 billion in foreign aid.
The Azad Kashmir government released Rs 27 billion to the relevant departments, but only Rs 22 billion could be spent in the first 11 and a half months of the financial year, while Rs 4 billion has not been released so far. There are a few weeks left in the current financial year, but Rs 9 billion is yet to be spent.
On the other hand, the Azad Kashmir budget book claimed that Rs 44 billion was allocated for infrastructure development, but in reality, the AJK government failed to provide Rs 13 billion from its own resources, as it had promised.
As a result, the development budget in the fiscal year 2024-25 was actually Rs 31 billion, not 44 billion as stated in the official claim.
In the FY 2023-24, too, only Rs 14 billion was spent in the first 11 months, while about Rs 12 billion was spent in the month of June alone.
This situation has raised serious questions about the financial management and administrative capacity of the Azad Kashmir government.
In such circumstances, the approval of such a large development budget by the federal government has itself become a topic of debate.
Like last year, this year too, a large part of the budget is being spent in the last month, due to which the question is being raised again: Is the development grant of Rs 32 billion for the fiscal year 2025-26 really a wise and justifiable decision?
