Final Report

22 July 2019
Sustainable
Development
Strategy
A Medium Term Development
Framework for Khyber
Pakhtunkhwa for 2019-23

Planning and Development Department

GOVERNMENT OF KHYBER PAKHTUNKHWA
MESSAGE FROM THE CHIEF MINISTER

Our vision is to make Khyber Pakhtunkhwa a

secure, economically vibrant and a prosperous
society through socio economic and human
development, creation of equal opportunities,
and good governance. This vision is reflection
of our political manifesto, clearly translated into
actions in the 100 Days Plan. The Sustainable
Development Strategy (SDS) puts us on the
path to strategize and implement the actions
reflected in the 100 Days plan.

The province has come a long way on the path

of peace and good governance with the support
of the people of Khyber Pakhtunkhwa who
stood by their government over the years. We endeavour to take tangible steps in all directions
to achieve our vision. The government of Khyber Pakhtunkhwa is progressing on its agenda for
change by pursuing a citizen-centric model for socio economic development and focusing on
poverty reduction along with achievement of peace and tranquillity, through an integrated and
holistic approach to development.

We are faced with the challenges of slow growth, poverty, governance, dated institutional
architecture with the additional challenge of integration of Merged Areas into Khyber
Pakhtunkhwa. We struggled to reform the province and remained successful in rooting out
administrative malpractices, established institutions, fought corruption and introduced new laws.

SDS promises an era of development planning for the Province flowing from the Vision 2030
plotting the path for better quality of life for our people. It strives to bring economic, social and
environmental policies into synergistic balance to produce optimal outcomes. I am pleased to see
that this development framework has crystallized the Government’s vision into clear policy
directions and strategic objectives and I hope that this Strategy will steer us through the
challenges we are up against.

Let us work together and rise to the challenge to make Khyber Pakhtunkhwa and Pakistan a better
place to live in. May Allah grant us the strength to serve our people with best of our abilities.

MAHMOOD KHAN

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MESSAGE FROM THE CHIEF SECRETARY

Medium term development plan is always an

essential step in public sector planning in order
to strategize investments, set priorities and
align governance reforms to achieve growth
and socio economic development. It is the
most challenging undertaking requiring a multi
sectoral approach and involvement of diverse
stakeholders with competing interests. The
challenge is thus to accommodate the
aspirations of all the stakeholders leading to
trade-offs and compromises. The most
important stakeholders are the people of
Khyber Pakhtunkhwa whose interests and
aspirations cannot be compromised. It was in
this spirit that the bureaucracy, sticking strictly to their typical role, conducted the process, enabled
the participation of the stakeholders and compiled the basic data for the formulation of this
document. The entire exercise was led by political leadership, based on their vision in the 100
Days Plan, and informed by wider public consultations with stakeholders.

The SDS combines a medium term socio economic development plan with the elements of a
growth strategy in a holistic approach. While strategic and indicative, this document covers all the
sectors with a variety of interventions, both infrastructure investment and institutional reforms
coupled with public private partnership enterprise and innovative approach to development. The
SDS development initiatives are synchronising with the SDGs targets and will go a long way in
the achievements of the SDGs in KP. I must thank the development partners in their support for
the formulation of the SDS and am hopeful that they will join us in the achievement of this shared
agenda.

I must commend the efforts and leadership of Additional Chief Secretary Dr. Shahzad Khan
Bangash and his able team for completing the process of formulation of this strategy. I must also
thank all the administrative secretaries and their teams especially the Chairs of the Technical
Advisory Groups (TAGs) who completed this process in a befitting manner.

Now that this Strategy stands approved by the provincial cabinet, it becomes incumbent upon all
the stakeholders to implement this document as a strategic plan to guide us through the
formulation of the Annual Development Plans over the coming four years as well as to design
governance and institutional reforms identified here.

MUHAMMAD SALIM

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MESSAGE FROM THE ADDITIONAL CHIEF SECRETARY

It gives me immense pleasure to present this

document as a product of the joint efforts of all the
key stakeholders and team members within the
government, civil society, chambers, and
academia. SDS translates the commitment of the
newly elected government into doable and
tangible initiatives for the social and economic
uplift of the masses while focusing on health,
education, reducing poverty, sustaining peace,
tranquility and food & environmental security.

This strategy piggybacks on the Government of

Khyber Pakhtunkhwa’s 100 Days Plan which is a
strategic document translating the government’s
vision into a manifesto of institutional reforms,
poverty reduction, social cohesion, growth led
development and economic well-being of the
people in the province. SDS is also anchored on
the previous medium-term development strategies of the government. It builds on the lessons
learnt and experiences gained from the implementation of these strategies. It consolidates and
takes forward the earlier reforms and achievements of the government with a keen focus on
achieving the goals set out here and the localized targets of the Sustainable Development Goals.

This document is the outcome of a rigorous and extensive consultation process with a wide range
of stakeholders. Both formal and informal modes were used during the consultative process to
gather multifaceted data and diverse opinions and ideas on the themes. Technical Advisory
Groups, led by the relevant provincial secretaries, were formed for each of the thematic area to
benefit from the expertise and indigenous knowledge of the senior government officials whereas
extensive consultative sessions were conducted with academia, civil society, educationists,
health professionals, chambers of commerce, farmer associations, NGOs, private sector, and
other interest groups with a view to foster inclusivity in the process of formulation of Sustainable
Development Strategy.

This strategy covers the period from 2019-20 to 2022-23 and catalyses the momentum of reforms
set by the new government. I must assure that my team will leave no stone unturned in
implementing this Strategy in letter and spirit and use this as a guide for Annual Development
Plan formulation under the overall guidance of the Chief Executive of the province.

DR. SHAHZAD KHAN BANGASH

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ACKNOWLEDGMNET

It was a privilege to have been tasked to lead a team to develop this medium term development
framework for the provincial government. The formulation of SDS was steered by an Apex
Committee headed by the Additional Chief Secretary. The Strategy has also benefited from the
patronage and ownership of the political leadership who took keen interest and provided guidance
from time to time during the formulation process.

Provincial Secretaries and their teams took very active and vibrant role in the formulation of this
strategy especially the chairs of all the TAGs and their members. Within P&D Department, the
process of strategy development was led by Additional Chief Secretary, Khyber Pakhtunkhwa Dr.
Shahzad Khan Bangash and assisted by the Chief Economist Mr. Nisar Ahmed, Additional
Secretary P&D, Mr. Shah Mahmood Khan, Chief Foreign Aid, Mr. Aurangzaib Haider Khan,
Assistant Chiefs, Foreign Aid Mr. Abdul Wajid, Ms. Shazia Atta and Ms. Zenab Khatoon and
Research Officer Mr. Ozair Rahim. Technical support was provided by the World Bank supported
Governance and Policy Project. A team of the GPP, previously led by Mr. Bakhtiar Khan (Ex-
Director General) and presently by Syed Zahir Ali Shah including Mr. Ashraf Khan (Governance
Adviser), Mr. Naseer Ahmed (Coordinator OSU), Mr. Atif Khan (Communication Specialist) and
Mr. Muhammad Iqbal Awan (Office Manager) provided support in all possible ways.

A team of sector specialists and experts was engaged to facilitate the process of formulation of
the Strategy. They included: Mr. M. Khalid Khan (lead consultant), Mr. Abid Shahzad Awan
(Senior Analyst and Content Compiler), Dr. Tufail Khan Yousafzai (Lead Researcher), Mr.
Rehmatullah Khattak (Institutional Development Expert), Mr. Rizwan Mahboob (Local
Government and Urban Development), Dr. Khursheed Khan (Food Security, Agriculture and Safe
Environment), Dr. Aamer Abdullah (Quality Education and Lifelong Learning), Ms. Nida Hameed
Afridi (Health and Well-being), Mr. Shahid Mohmand (Economic Growth and Employment
Opportunities), Mr. Shehzad Khan (Peace Building and Rule of Law), Ms. Saima Akbar (Energy
Security), Mr. Zia Akbar Khattak (Water Sector) and Ms. Bushra Siddiqui (Cross Cutting Themes).

ATIF RAHMAN

Secretary Planning and Development Department

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 Table of Contents
Message from THE Chief Minister................................................................................................ i
MESSAge FROM THE CHIEF SECRETARY .............................................................................. ii
MESSAGE FROM THE ADDITIONAL CHIEF SECRETARY ..................................................... iii
Acknowledgmnet........................................................................................................................ iv
acronyms ................................................................................................................................... ix
1. Strategic Context ............................................................................................................11

1.1 Strategic Objectives ....................................................................................................12

1.2 Socio-Economic Landscape ........................................................................................13
1.3 Strategic Framework ...................................................................................................14
1.4 Key Growth and Development Challenges ..................................................................16
1.5 Drivers of Growth ........................................................................................................17

2. Resources for the Strategy .............................................................................................21

2.1 The Economy of Khyber Pakhtunkhwa .......................................................................21

2.2 Budgetary Position ......................................................................................................21
2.3 Fiscal profile................................................................................................................23
2.4 Intergovernmental Transfers .......................................................................................23
2.5 Revenue Structure ......................................................................................................25

2.5.1 Sales Tax on Services .........................................................................................27

2.5.2 Urban Immovable Property Tax (UIPT) ................................................................29
2.5.3 Motor Vehicle Taxes ............................................................................................32
2.5.4 Taxes of professions, trading and callings ...........................................................33
2.5.5 Other taxes ..........................................................................................................34

2.6 Expenditure Management ...........................................................................................34

2.7 Resource Gap.............................................................................................................35

3. Thematic Area 1: Quality Education and Lifelong Learning ............................................37

3.1 Overview .....................................................................................................................37

3.2 Strategy ......................................................................................................................40

3.2.1 Objectives ............................................................................................................40

3.2.2 Milestones ...........................................................................................................41

3.3 Sector Plans ...............................................................................................................43

3.3.1 Primary Elementary and Secondary Education ....................................................43

3.3.2 Higher education, Libraries and Archives .............................................................47

4. Thematic Area 2: Health and Well Being ........................................................................50

4.1 Overview .....................................................................................................................50

4.2 Strategy ......................................................................................................................54

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 4.2.1 Objectives ............................................................................................................54
4.2.2 Milestones ...........................................................................................................54

4.3 Sector Plans ...............................................................................................................55

4.3.1 Health Department ...............................................................................................55

4.3.2 Population Welfare Department ...........................................................................58

5. Thematic Area 3: Economic Growth and Employment Opportunities ..............................60

5.1 Overview .....................................................................................................................60

5.2 Strategy ......................................................................................................................64

5.2.1 Objectives ............................................................................................................64

5.2.2 Milestones ...........................................................................................................65

5.3 Sector Plans ...............................................................................................................69

5.3.1 Industries, Trade, and Commerce ........................................................................69

5.3.2 Communication and Works ..................................................................................71
5.3.3 Mining and Minerals .............................................................................................72
5.3.4 Labor ...................................................................................................................73
5.3.5 Khyber Pakhtunkhwa Technical Education & Vocational Training Authority (Khyber
Pakhtunkhwa-TEVTA) ........................................................................................................73
5.3.6 Board of Investment & Trade ...............................................................................75
5.3.7 Science and Technology & Information Technology.............................................76
5.3.8 Tourism................................................................................................................80
5.3.9 Youth Affairs ........................................................................................................86

6. Thematic Area 4: Energy Security ..................................................................................90

6.1 Overview .....................................................................................................................90

6.2 Strategy ......................................................................................................................92

6.2.1 Objectives ............................................................................................................92

6.2.2 Milestones ...........................................................................................................93

6.3 Sector Plans ...............................................................................................................94

6.3.1 Energy and Power Department ............................................................................94

6.3.2 Pakhtunkhwa Electricity Development Organization ............................................95
6.3.3 Khyber Pakhtunkhwa Oil and Gas Company Limited ...........................................96
6.3.4 Electric Inspectorate ............................................................................................97

7. Thematic Area 5: Local Governance, Urban & Rural Development, Housing & Transport
99

7.1 Overview .....................................................................................................................99

7.2 Strategy ....................................................................................................................101

7.2.1 Objectives ..........................................................................................................101

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 7.2.2 Milestones .........................................................................................................102

7.3 Sector Plan ...............................................................................................................105

7.3.1 Local Government .............................................................................................105

7.3.2 Housing and Physical Planning Sector ..............................................................107
7.3.3 Transport ...........................................................................................................108

8. Thematic Area 6: Agriculture, Food Security and Safe Environment .............................111

8.1 Overview ...................................................................................................................111

8.2 Strategy ....................................................................................................................112

8.2.1 Objectives ..........................................................................................................112

8.2.2 Milestones .........................................................................................................113

8.3 Sector Plans .............................................................................................................115

8.3.1 Food Production and Trade ...............................................................................115

8.3.2 Forestry, Environment and Natural Resources Strategy ....................................117
8.3.3 Institutions, Partnerships and Innovation............................................................118

9. Thematic Area 7: Narrow the Trust Gap BetweeN Citizens and State through Peace
Building, Rule of Law, Transparency and Accountability .........................................................122

9.1 Overview ...................................................................................................................122

9.2 Strategy ....................................................................................................................124

9.2.1 Objectives ..........................................................................................................124

9.2.2 Milestones .........................................................................................................124

9.3 Sectoral Plans...........................................................................................................125

9.3.1 Judiciary ............................................................................................................128

9.3.2 Police .................................................................................................................129
9.3.3 Prison ................................................................................................................129
9.3.4 Prosecution ........................................................................................................129
9.3.5 Directorate of Reclamation and Probation ..........................................................130
9.3.6 Home .................................................................................................................130
9.3.7 Human Rights Directorate ..................................................................................130

10. Thematic Area 8: Adequate Water for Agricultural and Domestic Uses ........................131

10.1 Overview ...................................................................................................................132

10.2 Strategy ....................................................................................................................136

10.2.1 Objectives ..........................................................................................................136

10.2.2 Milestones .........................................................................................................137

10.3 Sector Plans .............................................................................................................137

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 10.3.1 Irrigation.............................................................................................................137
10.3.2 Public Health Engineering ..................................................................................139

11. Thematic Area 9: Cross Cutting ....................................................................................141

11.1 Enhanced Fiscal Space ............................................................................................141

11.1.1 Overview............................................................................................................141
11.1.2 Strategy .............................................................................................................142

11.2 Development Planning and International Assistance.................................................143

11.2.1 Overview............................................................................................................143
11.2.2 Strategy .............................................................................................................145

11.3 Gender Equity ...........................................................................................................145

11.3.1 Overview............................................................................................................145
11.3.2 Strategy .............................................................................................................146

12. Implementation Monitoring and Evaluation Framework ................................................149

12.1 Implementation frame work .......................................................................................149

12.2 Results Monitoring and Evaluation ............................................................................150
12.3 Evaluation and Impact Assessment ..........................................................................150

13. NMA: Bridging The Development Lag ..........................................................................151

13.1 Overview ...................................................................................................................151

13.2 Strategy ....................................................................................................................151

13.2.1 Pillar-1: Building Responsive and Accountable Institutions ................................151

13.2.2 Pillar-2: Enhancing Human Potential ..................................................................152
13.2.3 Pillar-3: Expanding Economic Infrastructure ......................................................153
13.2.4 Pillar-4: Enhancing Economic Opportunities ......................................................154
13.2.5 Pillar-5: Instituting Sustainable Resource Management .....................................155

Annex: Key Findings of the Review of Integrated Development Strategy and Strategic
Devlopment Partnership Framework .......................................................................................157

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 ACRONYMS

ADB Asian Development Bank

ADP Annual Development Plan
ADR Alternative Dispute Resolution
ADS Accelerated Development Strategy
BOIT Board of Investment and Trade
BoR Board of Revenue
C&W Communication and Works
CPEC China Pakistan Economic Corridor
CPO Chief Planning Officer
E&SE Elementary and Secondary Education
E&TD Excise and Taxation Department
EMIS Education Management Information System
EPA Environment Protection Agency
FATA Federally Administered Tribal Area
FBR Federal Board of Revenue
GDP Gross Domestic Product
GER Gross Enrollment Ratio
GIS Geographic Information System
GOKP Government of Khyber Pakhtunkhwa
HDI Human Development Index
HPP Hydel Power Project
HR Human Resource
IMR Infant Mortality Rate
IMU Independent Monitoring Unit
IT Information Technology
KPEF Khyber Pakhtunkhwa Education Foundation
KPIT Board Khyber Pakhtunkhwa Information Technology Board
KPOGCL Khyber Pakhtunkhwa Oil and Gas Company Limited
KPRA Khyber Pakhtunkhwa Revenue Authority
LG Local Government
LGE&RDD Local Government Elections and Rural Development Department
M&E Monitoring and Evaluation
MHSDP Minimum Health Service Delivery Package
MICS Multiple Indicators Cluster Survey
MMR Maternal Mortality Rate

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 MOU Memorandum of Understanding
MW Mega Watt
NER Net Enrolment Rate
NFC National Finance Commission
NGOs Non-Governmental Organizations
NHP Net Hydel Profits
NMA NMA
O&M Operations and Maintenance
P&DD Planning and Development Department
PDHS Pakistan Demographic and Health Survey
PEDO Pakhtunkhwa Energy Development Organization
PFC Provincial Finance Commission
PHED Public Health Engineering Department
PPP Public Private Partnership
RoKP Rest of Khyber Pakhtunkhwa
RTI Right to Information
RTS Right to Services
SDG Sustainable Development Goals
SDS Sustainable Development Strategy
SEZs Special Economic Zones
SMEs Small and Medium Enterprises
SOPs Standard Operating Procedures
ST&IT Science and Technology & Information Technology
TDS Tribal Development Strategy
TEVT Technical Education and Vocational Training
UIPT Urban Immovable Property Tax
UNDP United Nations Development Programme
UNICEF United Nation’s Children Fund
WB World Bank

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1. STRATEGIC CONTEXT

The underlying defining principles guiding and steering the development of the Sustainable
Development Strategy (SDS) encompasses: a) a number of objective realities, b) political landscape,
c) institutional framework, d) security environment, and e) fiscal and financial compulsions. These
broader contextual underpinnings represent a complex structural situation and defines the entire
gamut of political economy in which the SDS was developed and will be implemented. The complexity
of the political and strategic context with a focus on identifying areas of comparative advantages and
challenges have been summarized in the following topical sections:

Provincial autonomy and devolution: Medium term development plan is a key planning instrument
available to the provincial government to steer and guide strategic planning and budgeting. This
instrument has become all the more important and necessary especially after the 18th Amendment
to the Constitution of Pakistan promulgated in 2010. The 18th Amendment enshrines ample political,
financial and administrative autonomy to the provincial governments by abolishing the concurrent list.
The devolution to the provincial governments was further deepened by enhancing the share of
provinces in federal divisible pool. This has significantly enhanced potential for the provincial
governments to formulate and implement their own development plans and public policy
interventions.

Federal-provincial synergies: In the spirit of federation, the Government of Khyber Pakhtunkhwa

strives to coalesce its policies with the federal government’s national level polices, plans and
strategies. In the case of medium term development plan the provincial government is committed to
create synergies, so that the efforts of both the provincial and the federal governments could
complemented and supplemented one another in the realm of policy objectives, macroeconomic
framework, international obligations, and social and economic policies. The period of Integrated
Development Strategy (IDS) 2014-18 as a medium-term development plan ended in June 2018,
which coincided with the 11th five-year plan (2013-18). In line with the same principle the Government
of KP’s initiation of SDS coincides exactly with the federal government’s kick-start of the development
of the 12th five-year plan (2019-2023). Both the processes will benefit each another and one will build
on the comparative advantages of the other.

A manifesto of prosperity—100 Days Plan: SDS is inspired by and builds on the Government of
Khyber Pakhtunkhwa’s 100 Days Plan which translates Pakistan Tehrek-e-Insaf (PTI)’s manifesto
into doable and tangible actions. The 100 Days Plan sets out strategic objectives to steer reforms for
improving governance, poverty reduction, social cohesion, growth led development, economic well-
being of the people and establishment of durable peace in the province. SDS refines and prioritizes
those politically agreed strategic objectives in to yearly measurable and tangible millstones and
costed interventions of each year of the SDS period. SDS is also anchored on the previous medium-
term development strategies of the government i.e. Integrated Development Strategy and
Comprehensive Development Strategy which guided and shaped development spending during
previous two tenures. SDS thus builds on the lessons learnt and experiences gained from the
implementation of these strategies. It consolidates and takes forward the earlier reforms and
achievements of the government during its previous tenure with a keen focus on achieving the goals
set in the 100 Days Plan.

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Continuity and consolidation of reforms: The continuity of the same political party at the helm of
political power with a clear and predominant mandate has created a very conducive and enabling
environment to all the stakeholders to consolidate and continue political and governance reforms in
the domain of accountability, transparency and citizen centric policies with participations from the
grass roots and in the province with a focus on devolution of power to the lower tiers of governance.
The ongoing reforms provides a good opportunity to government to position these reforms in a wider
context and shall be supported by sector plans with costed interventions. The devolution of power to
the lower tier through a robust decentralized dispensation also provides the government an
opportunity to realize the objectives of the SDS. The commitment of the government to make
democratic decentralization more meaningful by further devolving political, administrative and
financial powers to Tehsil and VCNC poses an opportunity and a challenge at the same time. It is an
opportunity to empower citizens and improve service delivery but on the other hand it involves cost
both for establishing institutional and physical infrastructure and allocation to the devolved tiers and
functions as development funds.

Merger of FATA: The merger and mainstreaming of the erstwhile FATA through the 25th
Constitutional Amendment into Khyber Pakhtunkhwa is a key political and strategic drift from the past
by giving the people of those areas the right to be treated at par with the other parts of the country.
In terms of development planning and institutional development the SDS pored (2018-23) will witness
key political reforms to be implemented and public investment made in the Newly Merged Are. This
will pose key development and institutional challenges i.e. taxing the existing provincial government
agencies with the additional work, the pangs of transition, and the additional investment for
infrastructure and service delivery. While on the other hand this special initiative of the federal
government offers a unique opportunity to the province in terms of an additional PKR 100 Billion
development funds each year for the coming ten years which will not only alleviate the socio economic
condition of the people of the merged areas but will also boost the economy of the rest of the province
by injecting huge additional money into different sectors especially job market.

Achieving SDGs: Government of Khyber Pakhtunkhwa has an unwavering commitment to achieve

the Sustainable Development Goals (SDGs) which came into effect in January 2016. The SDGs
require conscious efforts to strategically align its targets with the national and provincial policy
objectives. The Government will therefore require an elaborate and consistent framework to guide
public investment in key sector gearing funding for achieving the SDGs. A mechanism therefore will
be required by the Government of Khyber Pakhtunkhwa to influence sectoral priorities through
strategic allocations of resources viz. viz. a vibrant feedback and follow up mechanism to ensure
progress towards achieving SDGs targets on a fast track. The SDS positions its objectives, sector
plans, and milestones in such a way to align all of them with the goals in SDGS so that all the
institutional reforms and public sector investments feed into the attainment of the SDGs.

1.1 STRATEGIC OBJECTIVES

Government of Khyber Pakhtunkhwa through the SDS strives to ensure sustained and equitable
improvements in the lives of the people of the province through its political and development agenda.
Given the strategic context, the overall purpose of the SDS is to have a framework around key socio-
economic statistics to guide reforms initiatives and development investment in Khyber Pakhtunkhwa.

Specific objectives that the Government of Khyber Pakhtunkhwa seeks to achieve over the medium
term through SDS are:

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 • Provide the political and bureaucratic leadership an opportunity to design a development
roadmap for the province;
• Align the political reforms agenda with the development roadmap;
• Provide a strategic direction to the development of the province in governance, social and
economic sectors;
• Consolidate and integrate public sector development spending to synergize sectoral
development;
• Establish policy coherence across tiers of government and sectors;
• Identify and build inter sectoral synergies;
• Map out the implementation requirements and challenges weaving-in innovation; and
• Align SDS outcomes with SDG targets.

1.2 SOCIO-ECONOMIC LANDSCAPE

Joined by the NMA, Khyber Pakhtunkhwa houses a combined population of 35.5 Million inhabiting
an area of 101,741 square Km1 implying a density of 340 persons per square Km. Approximately
84% of the population resides in rural areas while 64% of the population is below the age of 24 years2,
a huge youth bulge.

The economy of Khyber Pakhtunkhwa is predominantly services driven with some chunk agricultural
based. Services sector accounts for 60 % of provincial GDP while agriculture sector contributes 16.87
% to the GDP.3 Un-employment rate (7.16%) in Khyber Pakhtunkhwa is the highest among other
provinces.4 Non-agriculture sector employs 67.38% of active population of which 52.33% is within the
informal sector.5 Khyber Pakhtunkhwa’s real GDP growth rate is 5.5 %.6 However, population growth
of 2.9% has rendered the real per capita GDP to grow at only 2.6 %. This means that the economy
has to develop the capacity to absorb this rapid increase in population in order to avoid worsening
the already high unemployment.

Socioeconomic indicators in rest of Khyber Pakhtunkhwa (RoKP) other than Newly Merged Areas
(NMAs), even though have improved, are yet not satisfactory. Khyber Pakhtunkhwa’s ranking on
Human Development Index (HDI) is 0.628 and is only lower than 0.732 for Punjab only.7 However,
Merged Areas’ score on HDI (0.216) is the lowest of all regions. Nearly half of the population in the
province and 73 % of population in merged areas is impoverished in terms of education, health and
living standards. This compares with 39 % as a whole for Pakistan8 which warrants more efforts for
investment in human development.

Health indicators both for RoKP and Merged Areas are not very satisfactory. The maternal mortality
ratio (MMR) for RoKP is estimated to be 206 per 100,000 live births9 and 395 per 100,000 for Merged

1
Stand-alone population of Merged Ares and rest of Khyber Pakhtunkhwa is 5 million and 30.5 million respectively (Population Census
2017)
2
Khyber Pakhtunkhwa Multiple Indicator Cluster Survey (MICS), 2016-17
3
Pasha, H.A. (2015), Growth of the Provincial Economies. Institute for Policy Reforms (IPR), Pakistan (Table 8, p.11)
4
Labor Force Survey, 2017-18, (p.7)
5
Labor Force Survey, Statistical Table 21
6
Author’s calculations based on GDP estimates of World Bank for the period 2009-10 to 2017-18
7
Pakistan National Human Development Report 2017, UNDP, (p.155)
8
Multidimensional poverty in Pakistan, UNDP 2015, (Table 3.3, p.15)
9
Sathar Z.A., Wazir, M.A., and Sadiq, M. 2014. Prioritizing family planning for achieving provincial maternal child health and development
goals. Islamabad: Population Council

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Areas10. The total fertility rate in RoKP is 4 and 5 for NMA11; while it is 3.8 in Pakistan. The share of
fully immunized children aged 12-23 months in RoKP is 40 % and 33.9% for NMA.

Overall literacy rate in RoKP is 53%12 and 33.3% for Merged Areas; Net Enrolment Rate (NER) at
primary level (age 6-10 years) in RoKP and NMA are 59% and 52.1% respectively. Similar gaps exist
at the middle and matric levels.

The Government of Pakistan has committed to the goals and targets enshrined in Sustainable
Development Goals. Several of these goals are being localized and adopted into development
planning by P&DD. Respective chapters in the thematic areas of education, health, communication,
energy and agriculture compare the current state of indicators with the SDGs both for Merged Areas
and RoKP. For planning purposes, the discrepancies highlight the quantum of investments and
initiatives that will be needed to reach the SDGs in time for 2030.

1.3 STRATEGIC FRAMEWORK

The framework for the strategy stems from the cardinal principles of the present government political
manifesto which sets out the key pillars, priorities and strategic objectives. It is also anchored in the
government’s policy guidelines: consolidating past reforms, continuity of past actions, and
commitment to sustainable and citizen centric development. The basic principles on which the
framework rests are: sustained growth, equity and inclusiveness, improved governance, community
engagement, innovation and public private partnership.

The commitments and the targets set out in the 100-Days Plan and framed more succinctly in the
frame work of the SDS are ambitious enough to accelerate growth in the province, improve social
conditions through health and education, create more jobs, help reduce poverty through social
protection, secure food and water security, meet the targets on climate change and human
development and establish peace to test the capacities, enthusiasm, ownership, and the leadership
capabilities of the political leadership and the administration of the Khyber Pakhtunkhwa. The 100-
Days Plan summarizes the vision and mission of the PTI government given in its manifesto and sets
the direction for guiding reforms and development in Khyber Pakhtunkhwa in the coming medium
term period. It gives a roadmap and a course of priority actions for key sectors with commitments set
out to be achieved during the tenure of the government. The commitments and the targets set out in
the 100-Days Plan are ambitious enough to test the capacities, enthusiasm, ownership, and the
leadership capabilities of the political leadership and the administration of the Khyber Pakhtunkhwa.

10
Fata Development Integrated Household Survey (FDIHS) 2013-14
11
MICS 2016-17 for Khyber Pakhtunkhwa and FDIHS 2013-14 for Merged Areas
12
KPESED Figures

14 | P a g e
The objectives, reform initiatives, and commitments of the 100-Days Plan are thoroughly incorporated
in the sectoral strategies embodied in the SDS and hence the SDS gives the platform and fiscal
environment for achieving the promises of the 100-Days Plan.

The driving principles for SDS are therefore derived and inspired from the 100-Days Plan which are
reproduced below:

Doing more with the opportunity at hand, and doing it better

The Khyber Pakhtunkhwa Government went beyond the 16 commitments in the Federal
1 Agenda, and included an additional 10 commitments in the Provincial Agenda to reflect a
greater ambition

Ensuring continuity of core policies and staying true to past commitments

Building upon the commitments in the PTI Manifesto, the Government has
2 ensured progress against policies is always in line with the Manifesto’s
principles and builds on the word done by PTI in Khyber Pakhtunkhwa over the
last 5 years

Adopting a more citizen-oriented approach for governance

3 The Government has prioritized interventions that allow it to use its absolute
majority to directly meet the demands of its citizens

Adopting a bold proactive approach to planning and leading reform

The 100 Days Agenda for Khyber Pakhtunkhwa embraces the transformative
4 potential offered by a province with the highest proportion of young adults in
Pakistan

15 | P a g e
The formulation of the SDS was informed and fed in by recently prepared five-year development
plans by all the sector departments. These plans were based on the sectoral policies and strategies
and depicted key sectoral challenges and opportunities. The SDS provides a framework to connect
these Sector Plans with 100-Days Plan and strategic objectives of the SDS. Similarly, thematic
chapters in the SDS, as presented in detail in the relevant sections, have factored in the 12th federal
five-year plan and the country strategies of the development partners.

SDS also takes into account the development challenges faced by NMA with a limited scope.
Development needs of NMA have been analyzed and reflected in the Tribal Decade Strategy (TDS).
It redefines the developmental challenge of the tribal areas, taking into account the transition towards
merger. For this reason, the SDS will only serve as a primer to be complemented by the TDS for
Merged Areas.

1.4 KEY GROWTH AND DEVELOPMENT CHALLENGES

Khyber Pakhtunkhwa’s economy has seen many challenges to its growth in the last decade, with
growth picking up pace in the last 5 years, averaging about 4.5 % per annum. With the merging of
erstwhile FATA with Khyber Pakhtunkhwa, the provincial GDP now stands around 16 % of Pakistan’s
total. That means that it is an estimated $49 billion13. A comprehensive study14 on provincial GDPs,
if combined with average GDP growth in last 5 years, would bring the number to approximately Rs.
1,575 billion15. Unemployment runs at near 10 %, with female labor force participation standing at 9
%. Number of people living below the poverty line is 27 % (headcount method), and majority of its
districts fall in the medium to low category of Human Development16. Development expenditures have
averaged Rs. 101 billion per annum since 2012-13. The provincial economy faces many challenges
at present.

Poverty and Malnutrition: Malnutrition and poverty is a formidable challenge for policymakers in
Khyber Pakhtunkhwa. Statistics attest to unsatisfactory progress on poverty and malnutrition
indicators. A snapshot is provided in the following table, based on the National Nutrition Survey 2011
and confirmed by later estimates and surveys. For example, the Demographic Health Survey 2012-
13 concluded that 85 % of children between 6 to 2 months do not receive the recommended diet
necessary for health and growth.

The situation carries on to the present. Of the estimated 800,000 children under the age of 5, every
second child is stunted, while every sixth child is wasted. Micronutrient deficiencies are still high in
children under five years. Estimate suggest 68.5pc having vitamin A deficiency, 49 % being anemic
and 45 % having zinc deficiency in the same cohort17.

Poverty and its incidence, especially the cycle of inter-generational poverty, are primary contributors
in this particular issue. The World Bank (WB) poverty estimates using headcount methodology

13World Bank, ‘World Development Indicators Report’ for 2018.

14 Dr. H. Pasha, ‘Growth and Inequality in Pakistan- Vol-I’, 2018
15 Dr. Pasha’s calculation is based on numbers till 2014-15. By taking average on growth rates over the next 4 years and

adding to the calculated figure for 2014-15 (Rs. 1,381 billion), we arrive at the present figure.
16 UN Human Development Index for Pakistan, 2017.
17 ‘Malnutrition and its consequences for Khyber Pakhtunkhwa’s children’.

16 | P a g e
suggest that despite experiencing impressive gains during 2004-2013, 27 % of Khyber
Pakhtunkhwa’s population still remains below the poverty line18, with rural poverty in excess of urban
poverty. If estimated by the ‘Multi-Dimensional Poverty Index’ the numbers appear even more
worrisome, with two thirds of the people of merged districts living in poverty19. Similarly, there is a
considerable 15 %age gap between incidence of rural and urban poverty20.

Since the poor families cannot afford the recommended diet for healthy growth of children, women
growing up in such families tend to bear children with the same deficiencies, thus making this an
inter-generational transfer of dietary shortcomings.

Inter-Regional Human Development Disparity: The varying degrees of development experienced

in districts of Khyber Pakhtunkhwa tend to exacerbate inter-regional income disparities and
differences in development of various socio-economic indicators. This is aptly reflected in the form of
HDI in Khyber Pakhtunkhwa, whereby majority of districts in Khyber Pakhtunkhwa are ranked as
poor, with a few ranked little better21. Not a single district of Khyber Pakhtunkhwa ended up in the
‘high’ category of the UN HDI for Pakistan (2017), while 84 % of the districts fell in the medium to
lower categories22.

Population Growth: Khyber Pakhtunkhwa has the highest population growth rate among Pakistan’s
provinces. As per the latest census and population survey, Khyber Pakhtunkhwa’s population growth
rate is close to 3 %, with an unemployment rate hovering around a high of 10 %. Added to this is the
pressure exerted by its youth bulge. The %age of individuals between 15 and 29 years of age in
Khyber Pakhtunkhwa was estimated at 28 %, which has now gone up after merger of FATA (above
30 %)23. One of the most prominent resulting challenges would be to propel economic growth to an
extent that creates enough jobs in the future to absorb the burgeoning youth bulge.

Lack of Evidence Based Policymaking: The provincial government spends billions of rupees per
year on development schemes. Yet there is no systematic, coordinated research effort that can point
to the consequences (positive or negative). Effective policymaking has to be based on such studies.
Cash transfers and Health cards are two examples of projects/initiatives that the government has
spent billions to implement and work since several years.

1.5 DRIVERS OF GROWTH

Trade, Commerce and Comparative Advantage: Khyber Pakhtunkhwa enjoys a clear comparative
advantage in a few selected goods and sectors. Its’ soil and air are conducive for growing many
varieties of fruits and vegetables, both having a considerable share in the global trade of goods. The
global market for fruits and vegetables stands at an estimated $300 billion at the moment, set to grow

18World Bank, ‘State of water supply, sanitation and poverty in Pakistan and its impact on child stunting’, 2018.
19 ‘Pakistan’s new poverty index reveals that 4 out of 10 Pakistanis’ live in multidimensional poverty’.
20 World Bank, ‘State of water supply, sanitation and poverty in Pakistan and its impact on child stunting’, 2018.
21
There is unanimous agreement among researchers that overall, Khyber Pakhtunkhwa’s HDI is low. Variations in rankings, though, do
occur by source of research. Dr. Pasha’s research, for example, puts 20 districts of Khyber Pakhtunkhwa with a low HDI, and 6 with a
medium HDI. Other rankings, like UN sponsored research and Federal Government’s PSLM puts districts like Abbottabad at higher ranking
of HDI.
22
UNDP, ‘Pakistan human development Index report 2017’, p.7, figure 3.
23
Bureau of Statistics, Government of Pakistan, Population Census 2017

17 | P a g e
to $400 billion by 2030 24 . The United Arab Emirates imports more than $100 billion of fruit and
vegetables from around the globe. Since Khyber Pakhtunkhwa already has an established setup in
the form of agricultural research institutes, and has held road shows in select countries, the effort
should be aimed at being a viable part of the global fruit and vegetable market through research and
information dissemination regarding its products.

Similarly, for the province’s trade and industry, markets like Afghanistan present a golden opportunity
due to its close proximity to Khyber Pakhtunkhwa. But that market remains untapped due to several
constraints. It’s much easier, cost-effective and comparatively advantageous for Khyber
Pakhtunkhwa to trade with Afghanistan than with any other country.

Tourism: The sector has

significant potential for Khyber
Pakhtunkhwa’s economy,
however physical and
institutional infrastructure is
lacking in terms of robust
organizations and multi-
disciplinary approach to sector
development. With provision of quality services to tourists (electricity, transport), rehabilitate existing
facilities and infrastructure, development of new projects, Regulatory reform to facilitate private sector
investment, and enhancing administrative capacity to introduce and manage mandatory standards
for service providers, coupled with workforce development and marketing; can help leverage the true
potential of this sector. Several potential spots in Khyber Pakhtunkhwa have been identified25 for their
potential. In the NMA, the security situation has normalized in a number of potential spots with
substantial revenue capacity.

Mines and Minerals: Khyber Pakhtunkhwa is endowed with an array of naturally occurring resources
including like oil, gas, gemstones and marble, etc. Khyber Pakhtunkhwa offers opportunities in
exploration in the following general categories: Dimension Stones (Marble, Granite and other
Decorative stones), Industrial Rocks and Minerals (Phosphate, Soapstone, Feldspar, Gypsum, Rock
Salt, Limestone, Silica sand, etc.), Gemstones of various, precious varieties (Emerald, Topaz, Ruby,
Corundum, Garnet, etc.), Fuel Minerals (coal, oil and gas) and Metallic Minerals (Gold, Silver, Copper,
Zinc, Lead, Antimony).

The total exports of marble and granite from Khyber Pakhtunkhwa is estimated as Rs. 4 billion in the
year 2018.26The State Bank of Pakistan (SBP) puts exports of gemstones from Pakistan at $1.18
billion in 2014-1527. The regional and international markets offer a wide spectrum of opportunities for
earning revenue from these kinds of resources. The global gems and jewelry market, for example, is
expected to reach $443 billion by 2022 28 . In Pakistan’s immediate neighborhood, United Arab
Emirates alone exports more than $30 billion of jewelry and gemstones per year. Khyber

24
‘MarketWatch, press release dated November 06, 2018. See full report at: https://www.marketwatch.com/press-release/fresh-fruits-
vegetables-market-2018-global-trend-segmentation-and-opportunities-forecast-to-2025-2018-11-06’
25
World Bank Presentation to Government of Khyber Pakhtunkhwa, 2019
26
Author’s calculation based on commodities trade data on UNCOMTRADE
27
‘Gem and Jewelry’.
28
‘Global $443 billion Gems and Jewelry market 2012-2017 & 2022’.

18 | P a g e
Pakhtunkhwa can make use of such opportunities to enhance its resource availability through
increasing exports, both within and outside the country.

China Pakistan Economic Corridor (CPEC): Given the right set of policies and implementation,
Khyber Pakhtunkhwa can benefit enormously from CPEC. Two prominent and important projects of
the CPEC, the Karakoram Highway up- gradation and expansion, and the proposed rail track between
Havelian and Kashghar, are apt reflection of this potential. If completed, these would provide a viable
link for the products from Khyber Pakhtunkhwa to reach the Chinese market and foster business. The
rail link would especially provide a tremendous boost to the provinces’ industry which has been calling
for long to revive the rail network in Khyber Pakhtunkhwa to bring down its reliance on the road freight,
which is unreliable and costly, thereby increasing the overall cost of doing business.

Considerable investment is also expected to come in under the CPEC umbrella. Special Economic
Zones (SEZs), especially Rashakai and Hattar, are covered under the CPEC. Recently, official
sources disclosed that $120 million of Chinese and foreign investment is expected to be made in
Rashakai SEZ29. Similarly, 7 new hydropower projects in the province are covered under the CPEC
investment opportunities.

Market Pricing of Resources: Two of the most valuable resources in Pakistan are electricity and
water. In comparison to other provinces, Khyber Pakhtunkhwa is endowed with abundant water and
a large capacity to produce electricity from its natural resources (water and gas). Yet these resources
are vastly underpriced compared to their demand and remain underutilized30. Moreover, the absence
of a market pricing mechanism leads to wastage of previous resources as there is no incentive to
conserve. This underpricing and non-conservancy, in return, not only results in forgone revenue
earning opportunities, but also undermines growth efforts.

It is pertinent to mention here that hardly 30 % of the province’s total area has been mapped so far
for presence of natural resources. Still, within this 30 %, one can find a wide variety of precious
minerals like gemstones, gold, oil and gas deposits. Any scheme/incentive to geologically map the
remaining 70 % is likely to turn up even more riches that could be benefit not only to Khyber
Pakhtunkhwa’s financial fortunes, but also to its socio-economic development. Estimates, for
example, suggest that the gas reserves in the province are close to 9 trillion cubic feet31, of which
only 380 million cubic feet/day is being produced at the moment. As production and extraction of
natural resources goes up, the benefits to the province as a whole will also likely go up.

Skill Development for Enhanced Remittances: A large %age of Khyber Pakhtunkhwa’s household
income, between 25 to 30 %, is based on remittances from abroad and within the country32. However,
majority of the migratory workforce from the province tends to be on the lower end of technically
qualified. This kind of labor is most at risk of losing their job when a recession occurs. Highly qualified
migrants, though, are at a lesser risk since their abilities are not easy to substitute. Moreover, their
earnings are substantially higher than the manual labor. This advantage can be reinforced and
enhanced by facilitating the migration of highly qualified, technically well-equipped labor. Not only

29
‘Rashakai SEZ to get $128 million initial investment’.
30
Hydro power is one such example. Khyber Pakhtunkhwa’s reported production capacity is around 10,000 MW or more. At the moment,
the installed capacity is 4,000 MW. Production is even lower.
31
‘Khyber Pakhtunkhwa- The new geological frontier for oil, gas and natural LPG’.
32
Khyber Pakhtunkhwa receives an estimated 20 % of the total foreign remittances received by Pakistan. However, combined with
remittances from within the country (like Karachi), they make up nearly 25 % or above of household income in Khyber Pakhtunkhwa. For
reference, see ‘Growth and Inequality in Pakistan, Vol-I’.

19 | P a g e
would it add to household income, but also ensure a lesser probability of adverse implications for
Khyber Pakhtunkhwa’s economy in times of negative external shocks.

Financing Growth in Merged Districts: The expected PKR 100 billion per annum Federal
Government investment in these districts will generate huge economic boom which will benefit
common person in multiple ways. The Federal government has committed Rs. 24 billion from Annual
Development Plan (ADP) for merged districts, and also pledged to commit a certain share of the
NFC33. Since most of these areas have geographic linkages with the rest of Khyber Pakhtunkhwa,
the proposed investment will attract a high number of jobs in these areas. Besides, the contagious
industries of the infrastructure development residing in the local areas as well as in the adjacent
districts of the rest of Khyber Pakhtunkhwa will promote their business by exploiting these
opportunities.

Multiplier effects in the rest of the sectors due to this unprecedented investment in these areas can
also be predicted to favorable degrees which can last structural improvement in the economic horizon
in Khyber Pakhtunkhwa in general and in these areas in particular. Provincial government has on
several occasions indicated that the merged districts will not be brought into taxation framework for
at least the first 5 years. This will also encourage private sector to invest and establish their business
in these areas which in turn will promote employment opportunities.

33
‘Government approves Rs. 24 billion funds for uplift of the tribal districts’.

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2. RESOURCES FOR THE STRATEGY

2.1 THE ECONOMY OF KHYBER P AKHTUNKHWA

Comparison of province-level estimates of GDP shows that Khyber Pakhtunkhwa’s per capita GDP
is reasonably close to that of Punjab. However, there is a fundamental difference in the structure of
two economies; Khyber Pakhtunkhwa has acquired the characteristic of a strong remittance-led
service economy with about 20% of household income coming from remittances as compared to less
than 10% in Punjab. 34 Factoring out the share of remittances, the provincial economy of Punjab
exhibits a strong production base, and hence a larger taxable capacity as compared to Khyber
Pakhtunkhwa.

Not only is the tax base larger in Punjab, but it should be easier to reach. Over 82 % of population in
Khyber Pakhtunkhwa is rural, employed in agriculture or self-employed in family businesses. 35
Only18 % of the population lives in urban areas, compared to 37 % of the population in Punjab.
Presumably, tax collections in urban areas are easier than collections in rural areas. Khyber
Pakhtunkhwa also has a heavy concentration of subsistence farming in its economy, which further
weakens taxable capacity. According to Labor Force Survey (Pakistan Bureau of Statistics 2017-18,
Table 21) non-agriculture sector accounts for 67.38 % of total employed in Khyber Pakhtunkhwa.
However, 77 % of the workforce in non-agriculture sector belongs to the informal sector, making it
hard to assess and collect provincial and local taxes. On the other hand, poverty in Khyber
Pakhtunkhwa has significantly decreased from 2004 till 2015. 36 It is not clear, however, if these
improved conditions have significantly increased taxable capacity or reduced expenditure needs in
Khyber Pakhtunkhwa.

2.2 BUDGETARY POSITION

The budgetary position in Khyber Pakhtunkhwa is described in Table 1. The data shows a current
account surplus (row 3) of about Rs 88 billion (20 % of general revenues) for the year 2017-18 and a
surplus of Rs 102.635 Billion (19 % of general revenues) for the year 2018-19. Expenditures for
“current capital” purposes (row 4) do not exceed the current surplus. The overall deficit, calculated as
the difference between total revenues and total expenditures is estimated to increase from Rs 36
billion in 2017-18 to Rs 85 billion in 2018-19. During 2017-18, this deficit has been financed by
drawdown of existing cash balances/savings (44 %) and through receipts coming in the form of
foreign project assistance grants (42 %). On the contrary, there is over-financing of the deficit during
2018-19. Along with permanent foreign debt of Rs 71.1 Billion (which accounts for 83.3% of the deficit)
an additional amount of Rs 39.05 Billion are diverted from cash balances which renders an overall
surplus of Rs 30 Billion.

34
H.A. Pasha, Growth of the Provincial Economies. Institute for Policy Reforms (IPR), Pakistan, 2015, p.10 - The study reports Punjab’s
per capita GDP to be Rs 54,672 as against Rs 53,523 for Khyber Pakhtunkhwa.
35
Population census, 2017, PBS
36
Multidimensional poverty index (MPI) decreased from 0.350 in 2004 to 0.250 in 2015 (Multidimensional poverty in Pakistan 2015, Figure
4.11, p.30)

21 | P a g e
Table 1: Budgetary Position of Khyber Pakhtunkhwa 2017-18
(PKR in Millions)
Budgetary Position 2017-18 2018-19
1. General Revenue Receipts 436,347 532,635
1.1 Federal Transfers 405,079 491,373
1.2 Provincial tax revenue 17,729 23,823
1.3 Provincial non tax revenue 13,539 17,439
2. Current Revenue Expenditure 348,043 430,000
3. Surplus (1-2) 88,304 102,635
4. Current Capital Expenditure 7,291 8,000
4.1 Account-I
4.1.1 Loans and advances 573 210
4.1.2 Debt servicing - Foreign 6,718 7,790
Total Expenditure - I 7,291 8,000
4.2 Account - II
4.2.1 State trading in food ‒ 93,270
4.2.2 Debt servicing (floating) ‒ 15,000
4.2.3. Less receipts and recoveries ‒ (108,270)
Total Expenditure - II ‒ -
5. Development Expenditure 117,367 180,000
5.1 Development Revenue Expenditure 29,644 17,157
5.2 Development Capital Expenditure 87,723 162,843
6. Gross Deficit 3-4-5 (36,354) (85,365)
7. General Capital receipts - Account -I 77 5,250
7.1 Recoveries of investment ‒ ‒
7.2 Recoveries of Loans and Advances 77 250
7.3 Domestic Debt ‒ 5,000
8. General Capital receipts - Account-II ‒
9. Total Capital receipts (7+8+9) 77 5,250
10. Development Capital receipts ‒ 44,344
11. Development revenue receipts 15,188 26,756
12. Total Development receipts (10+11) 15,188 71,100
13. Total receipts (9+12) 15,265 76,350
14. Overall deficit (6+13) (21,089) (9,015)
15. Financing form cash balance/savings 16,058 39,015
16. Net deficit (14+15) (5,031) 30,000

There appears to be a systemic reliance on cash balances to finance the overall deficit. Total deficit

22 | P a g e
is equivalent to about 8 % of general revenues in 2017-18 which increases to 16 % in 2018-19.There
are reasons to believe that these balances could disappear in the long run. One reason is that the
balances have accumulated in part because of unfilled vacancies. If these are filled, the balance will
be depleted. Factoring out financing from savings would mean an uncovered deficit of Rs 9,015 Billion
in 2018-19. Taxes would have been required to increase by 38% based on 2018-19 levels to cover
this deficit. Creating fiscal space for development would require even further enhancement in tax
revenues.

2.3 FISCAL PROFILE

Fiscal profile of Government of Khyber Pakhtunkhwa is presented in Table 3. The province receives
most of its revenues from federal government. Moreover, the overall level of revenue mobilization
has shown little growth. The picture is surprising when it comes to provincial revenue effort (measured
in Table 2 as the ratio of own source revenue collections to GDP). This ratio is less than 1 % of
provincial GDP. The conclusion is that the province does not extend itself very much to mobilize
resources from its own tax bases.

Table 2: Fiscal Profile of Khyber Pakhtunkhwa37

Years Tax revenue Own Source Per capita Total Intergovernmental
as % of GDP Revenue as a Expenditure Expenditure as a Transfers as a % of
% of GDP (Rs)a % of GDP total revenues

2013-14 0.441 0.843 10,019 11.36 92

2014-15 0.416 0.810 11,731 11.58 91
2015-16 0.427 0.823 13,168 12.06 93
2016-17 0.466 0.823 14,944 12.70 92
2017-18 0.464 0.818 15,486 12.37 93

Moreover, the increase in federal transfers has been significant while the growth in own source
revenues has been nearly flat as depicted in figure 1.

2.4 INTERGOVERNMENTAL TRANSFERS

The National Finance Commission (NFC) is by far the largest of the transfers in the system.38 The 7th
NFC award finalized in 2010 apportions the divisible pool in a ratio of 57.5% and 42.5% between the
federal government and the provinces. For horizontal distribution among the provinces four indicators
are used: (1) population (82%); (2) poverty (10.3%); (3) revenue generation/collection (5%), and; (4)
Inverse Population Density (2.7%). The relative share of Khyber Pakhtunkhwa on the basis of these
indicators is 14.62%. Besides, Khyber Pakhtunkhwa also receives 1% of Net Divisible Pool as a
subvention (compensation for damages on account of war against terror) and Net Hydel Profit (NHP)

37
Calculations are based on: Provincial Expenditure and Revenue time series data provided by Finance Department Government of Khyber
Pakhtunkhwa. Intergovernmental transfers include federal tax assignment, straight transfers and NHP
38
There are four types of federal transfers: (1) shared tax revenues; (2) Natural resource royalties; (3) Subventions; (4) Net Hydel Profit

23 | P a g e
on hydel power generation.

From 2010-11 till 2017-18, (nominal) provincial receipts under tax assignment have increased at an
annual average growth rate of 14.4%, War on Terror receipts increased at annual average growth
rate of 14% and straight transfers exhibited a 5% growth rate, on average.

Future projections of NFC transfers

will depend on the outcomes of the Figure 1: Receipts vs expenditure 2013-14 to 2017-18
9th NFC.39 The structure of new NFC 500 437 473

resource sharing will be largely 375

400 325

(Rs in Billions)
affected by the merger of new 270 405
districts. Though at this stage it will 300
318 313
be premature to contemplate new 200 236
235
indicators or different weights for the
100 20 23 26 28 31
existing indicators in the formula,
factors that will have certain 0
predominant bearing on Khyber 2013-14 2014-15 2015-16 2016-17 2017-18

Pakhtunkhwa’s share include: (1) Own Source Revenue Federal Transfes

how the indicators for larger Khyber Total Expenditure
Pakhtunkhwa are affected by
merger; (2) whether or not the subvention of 1% War On Terror will continue; (3) what alternate
remedies could be available for meeting the resource requirement (3 % of Divisible Pool) for merged
areas as an interim arrangement; and (4) the way the existing shares will be altered by availability of
new data on population (Census 2017) and poverty. Different scenarios are presented in Table 3.

Table 3. Projections of Federal Receipts.40 (PKR in Billion)

Scenarios 2018-19 2019-20 2020-21 2021-22 2022-23

FBR Receipts 4000 4532.02 5134.80 5817.76 6591.56
Scenario 1: Net Divisible Pool41 3910 4442.02 5044.80 5727.76 6501.56
Shares based
on status-quo Provincial share (57.5%) 2248.25 2554.16 2900.764 3293.46 3738.39
Khyber Pakhtunkhwa's 328.69 373.42 424.09 481.50 546.55
share (14.62%)
Straight transfers42 24.6 25.95 27.38 28.89 30.48
NHP43 20 2.91 5.82 8.73 11.65
1% WOT 39.1 44.42 50.44 57.27 65.01
Total 412.39 446.70 507.74 576.41 653.70
Scenario 2: Khyber Pakhtunkhwa's 370.35 420.61 477.55 542.06
Shares based share (14.5%)
on 7th NFC with
Straight transfers 25.95 27.38 28.89 30.48

39
1st meeting of 9th NFC was held on 6 February 2019
40
Scenario 2 factor’s in the share of Merged Areas which turns out to be 4.9% of the provincial share
41
FBR receipts are projected to increase at an annual rate of 13.3%. Net Divisible Pool is calculated on the basis of historic average
difference between FBR receipts
42
Straight transfers are projected to increase at a historical rate of 5.5%
43
Estimated to increase annually by Rs.1.924 billion

24 | P a g e
 Scenarios 2018-19 2019-20 2020-21 2021-22 2022-23
updated NHP 2.91 5.82 8.73 11.65
population and
poverty 1% WOT 44.42 50.44 57.27 65.01
Total 443.64 504.26 572.45 649.21
Scenario 3 : Khyber Pakhtunkhwa's 362.18 411.33 467.01 530.10
Shares based share (14.18%)
on interim
arrangement44 Straight transfers 25.95 27.38 28.89 30.48
NHP 2.91 5.82 8.73 11.65
1% WOT 44.42 50.44 57.27 65.01
Total for RoKP 435.46 494.98 561.92 637.25
Merged Areas share 107.5 122.08 138.61 157.34
Gross Total 542.96 617.07 700.53 794.59

2.5 REVENUE STRUCTURE

A central issue in provincial finance in Khyber Pakhtunkhwa, is over-reliance on federal transfers. In
a situation where the federal government taxes are only 9.6% of the GDP45, there is a premium on
increasing provincial revenues. However, barriers to such an increase in revenue mobilization by
provincial government are formidable. They range from structural problems with the present tax
system, to administrative shortcomings, to the absence of incentives for provincial governments to
increase their tax effort.

The Government of Khyber Pakhtunkhwa relies heavily on federal transfers and has a very narrow
resource base – about 92% of provincial receipts are contributed by the federal government through
National Finance Commission’s disbursements. Within the own-source receipts, sales tax on services
is the single largest revenue stream and contributed Rs 10.9 billion (35%) to the provincial own
receipts (62% of tax receipts). Other taxes like motor vehicle tax, land revenue and property tax, have
miniscule shares of 9%, 7.6% and 5.8% respectively 46(Table 4). Sales tax on services being the
largest collected tax in Khyber Pakhtunkhwa, is estimated to have the highest potential. According to
World Bank, if the compliance rate can be increased from current 23% to 60% then PKR 24 billion
can be collected from sales tax on services (and PKR 40 Billion, if the compliance rate is increased
to 75%)

Table 4: Revenue structure of Government of Khyber Pakhtunkhwa

(PKR in Million)

% of Annual
2013-14 2014-15 2015-16 2016-17 2017-18 Own Growth
Source Rate
Direct taxes:

44
Minutes of meeting dated 31 December 2018 chaired by the Prime Minister. It was decided that the Federal Government and the
provincial governments of Punjab and Khyber Pakhtunkhwa will contribute 3% of their respective divisible pool shares for development of
merged areas. The cumulative effect of this decision results in a share of 2.42% of the undivided divisible pool.
45
Pakistan Economic Survey, 2017-18
46
Annual Budget Statement, 2018-19, Finance Department Government of Khyber Pakhtunkhwa

25 | P a g e
 % of Annual
2013-14 2014-15 2015-16 2016-17 2017-18 Own Growth
Source Rate
Property and wealth 463.00 532.04 667.64 704.62 889.05 2.8% 13.9%
tax
Tax on professions, 135.87 203.63 247.70 243.74 306.96 1.0% 17.7%
tradings and callings
Agriculture income 31.19 66.49 68.83 69.12 66.17 0.2% 16.2%
tax
Property registration 111.30 113.17 111.37 122.73 134.27 0.4% 3.8%
Land revenue 1492.59 1834.23 2011.15 1220.69 1350.89 4.3% -2.0%
Urban CVT 263.52 288.12 280.67 358.59 393.95 1.3% 8.4%
Indirect taxes:
Sales tax on services 5668.23 6279.64 7267.08 10273.33 10916.95 34.9% 14.0%
Provincial excise 25.12 23.35 15.63 24.27 25.44 0.1% 0.2%
Stamp duties 712.95 817.18 831.43 956.06 1235.50 4.0% 11.6%
Motor vehicle tax 1038.26 1045.61 1316.90 1534.91 1657.00 5.3% 9.8%
(including Motor Vehicle
Fitness and route
permit)
Other indirect taxes 537.91 463.29 461.40 544.42 766.85 2.5% 7.3%
Tax revenue 10479.93 11666.76 13279.82 16052.47 17743.03 56.7% 11.1%
Non-tax revenue 9530.76 11039.71 12296.63 12294.55 13524.88 43.3% 7.3%
Provincial own source 20010.69 22706.47 25576.44 28347.01 31267.91 100.0% 9.3%
revenue

While the tax structure described in Table 4 outlines the current practice, it does not show the
structure that would arise if full revenue potential was reached. The province does have access to
some taxes that have broad enough bases and potentially enough built-in growth to form a more
revenue productive tax system. The economic base has at least the capacity to give up more in

20%
Annual growth rate (2014-

Tax on prefessions
15% Agriculture income tax
Property tax
Stamp duties Sales tax on services
10%
Motor vehicle tax
18)

Urban CVT
5%
Property registration
0%
Provincial excise
0% 5% 10% 15% 20% 25% 30% 35% 40%
-5% Land revenue
% of own srource revenue (2017-18)

provincial government tax revenues than 0.46 % of GDP that was collected in 2017-18. This list would
certainly include property tax, motor vehicle taxes and the sales tax on services. Figure 2 depicts the
relative high potential of these three taxes in terms of their footprint in provincial own-source revenue

26 | P a g e
and their annual growth rate. However, all of these taxes presently are levied at very low effective
tax rates, thus yielding relatively low level of revenues.

2.5.1 SALES T AX ON SERVICES

Sales tax on services is the not only the single largest provincial tax in terms of its current contribution
to provincial revenues but has the highest potential also. According to World Bank (2015), the
potential from STS can be as high as Rs 36 Billion (for a compliance rate of 90%). The estimated
potential for a compliance rate of 75% is Rs. 30 Bn.47

While both Sindh Revenue Board and Punjab Revenue Authority have accelerated the sales tax on
service revenue collection since taking over from the federal government, Khyber Pakhtunkhwa
Revenue Authority (KPRA) performance has lagged behind. KPRA’s revenues increased at an
average annual growth rate of 15.91 % from 2013-14 to 2017-18(Figure 3). This growth rate barely
surpasses Federal Board of Revenue’s average annual growth rate of sales tax on services collection
of 15.29 % during the preceding period of 2006-07 to 2011-12.48 Thus KPRA appears to have only
maintained the inertia and has not yet tapped its potential.

Figure 3: Comparison of provincial collection of sales tax on services

(PKR in Billion)
110

92
77.7 78.5

58.7 61.6
52
49.4
42.5 42.7
34.4 33.7
25
5.98 5.96 7.27 10.21 10.8

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18

PRA SRB KPRA

Composition of provincial GDP of Khyber Pakhtunkhwa shows that 60 % of the GDP is contributed
by services sector.49 This broad version of the base for the sales tax on services is captured by
Schedule-II of the Finance Act, 2013 which classifies 91 services as taxable services for the purpose
of collection of sales tax. However, actual collection comes from only half of the taxable services.
Moreover, the number of registered service providers is close to 6,000 out which 40 % of the business
entities do not file their tax returns.50There are some other significant challenges in taxing this base
and ratcheting up revenues. First, tax collection is concentrated in highly formalized sector – about
80% of revenue collection comes from this sector with paramount contribution of telecom sector.

47
Micro simulation Model to estimate Potential in Services Sales Tax, Khyber Pakhtunkhwa Revenue Authority, 2015
48
FBR Year Books, various issues.
49
Pasha, H.A. (2015), Growth of the Provincial Economies. Institute for Policy Reforms (IPR), Pakistan (Table 8, p.11)
50
Khyber Pakhtunkhwa Revenue Authority data

27 | P a g e
Second, there is a “headquarters” problem, i.e. 86 % of the tax collection is from highly formalized
sector having headquarters outside Khyber Pakhtunkhwa. The service sector is relatively hard to tax
because it is composed of many small firms that are difficult to identify and their recordkeeping often
is problematic. This is evident from the fact that only 20% of tax is collected from urban semi-formal
and informal sectors.

Sales tax on services is essentially a value added tax. The base is the gross amount of sales and the
tax rate is 15 %, for majority of the services except telecommunication sector which is taxed at a
higher rate of 19.5%. Service providers are entitled to claim input tax credit for the tax paid on taxable
purchases, inputs and utilities. Seven sectors are taxed at a rate of 10% (without any input
adjustment) while advertisement services are taxed at 5% (without input adjustment). Telecom sector
appears to be taxed at a higher rate for two reasons; first, the sector normally invests in capital goods
which result in a high volume of input adjustment and thus make the effective collection less than 15
% and, second; the demand for telecom sector is inelastic which makes it easy to collect revenue.

What is the true potential of sales tax on services in Khyber Pakhtunkhwa? World Bank has estimated
the potential for seven services – construction services, hotels and restaurants, transport and storage,
communications, finance and insurance, housing services and other private service. In order to
estimate the potential for disaggregated services qualified as ‘other services’, data of two different
tax surveys conducted have been used. 51 Sales tax potential worked out is presented in Figure 4.

Figure 4: Actual collection against estimated potential in 2017-1852

(PKR in Million)
5,366

3,893

1,663
782 851 555
240 208 105
730 256 200 165 127 121 29 2
17
Banking and Construction Inter city Hotels & Rest. Automobile Land & Property Wedding Halls Catering Services Beauty parlors
insurance services transportation or Services Dealers Activities Developers Services
services carriage of goods

Potential Collected

Way forward
The following actions are recommended:
1. Expand tax base

51
The first survey was conducted in 2014 for five sectors by the Sub-National Governance Programme. These sectors included:
hotels/restaurants/marriage halls/clubs; car dealers; property dealers; beauty parlors/barber shops and workshops. This survey was
conducted in Peshawar, Abbottabad and Mardan.
The second survey was conducted by Department of Economics, University of Peshawar in 2018. This survey focused on Advertisement
services, hospitality sector and transportation of goods in Peshawar and Abbottabad.
52
Potential for marriage halls and lawns uses the identified volume of Rs 130.8 million for Peshawar and Abbottabad (Economics
Department Survey). For the entire Khyber Pakhtunkhwa, the potential has been extrapolated after discounting for the non-tariff PATA
regions using the urban population shares.

28 | P a g e
  Launch targeted tax registration drives in major cities to bring nearly 1,300 identified
businesses in high impact sectors (transportation, hospitality, advertisement etc.) into the tax
net
 Incentivize registration for small businesses and professional services by simplifying tax
regimes
 Ensure better use of data analytics for potential taxpayer identification
2. Improve enforcement and compliance
 Increase compliance levels from 23% to 75 % by strengthening tax audit functions and
devising mechanisms for combined audits with other revenue collecting agencies.53
 Ensure legal follow up in case of non-filers
 Initiate an invoice monitoring system for restaurants and retails services in urban areas with
Point of Sales level IT support (Link with IT Board)
 Remove regulatory hurdles in collaboration with other revenue collecting agencies (Punjab
Revenue Authority, Sindh Revenue Board, FBR)
3. Taxpayer awareness and facilitation
 Establish zonal tax facilitation/ compliance centers in all three zones of Pakhtunkhwa, and
introduce mobile vans to improve accessibility
 Fully automate business processes to allow POS level tax deduction from payments, online
tax payment and refunds for ease of tax payers and improve efficiency and transparency
 Establish an outbound call center and launch targeted public awareness and PR campaigns in
high impact areas and relevant sectors
4. Improve organizational efficiency
 Meet the HR requirement of the organization
 Create a performance management system to incentivize performance based on collections
 Improve tax policy research by forming partnerships with academia, other provinces and
launch an internship programme for talented youth

Table 5 presents the targets for next 5 years. These targets have been split into two categories;
Business-as-usual collection and collection through increased efforts.

Table 5: Annual revenue targets 2018 till 2023 (PKR in Million)

2018-19 2019-20 2020-21 2021-22 2022-23

Business as usual collection 12,146 14,077 16,317 18,912 21,920
Increased effort 1,461 3,190 3,190 3,190 4,785
Total revenue 13,607 17,267 19,506 22,102 26,750

2.5.2 URBAN I MMOVABLE PROPERTY T AX (UIPT)

In Khyber Pakhtunkhwa, property tax is collected by Excise and Taxation Department (E&TD). During
2017-18, the E&TD collected a total revenue of PKR 13,805 Million at a cost (Current and
Development Expenditure) of PKR 709 Million. This implies a Rupee spent, on average, generates a
revenue of Rs 19.50. However, there is a large pool of vacant positions of 349 in E&TD which results

53
According to World Bank estimates, the current compliance for sales tax collection on services in Khyber Pakhtunkhwa is 23%. Increasing
the compliance rate to 75% is estimated to increase collections to Rs 30 Bn.

29 | P a g e
in inefficient budgeting of the current-expenditure. During 2017-18, an unspent amount of
approximately PKR 400 Million has been reported mainly, because of the vacant positions.

The property tax yields very little revenue, only about 2.84 % of own source revenue and 0.023 % of
provincial GDP and yields Rs 29.13 per capita in nominal terms (Rs 24.94 per capita in real terms).
Revenue income elasticity for property tax is estimated to be 1.8.54 During the last five years, revenue
flow from Property tax has increased at about 11 % on year-on-year basis (Table 6). However, it is
difficult to discern whether this increase has been due to addition of new properties to the tax roll or
change in tax rates.

Table 6. Revenue Performance of the Urban Immovable Property Tax (UIPT)55

Years Per capita nominal Per capita real % of own source % of GDP d
amount (Rs)a amount(Rs) a, b, c revenue a

2013-14 17.19 17.19 2.31 0.020

2014-15 19.22 17.89 2.34 0.019
2015-16 23.45 20.97 2.61 0.021
2016-17 24.07 21.44 2.49 0.020
2017-18 29.13 24.94 2.84 0.023

UIPT in Khyber Pakhtunkhwa is primarily an area-based system of taxation. The tax is levied on areas
called ‘rating areas’, notified by the Local Government & Rural Development Department and is
collected from residential as well as commercial areas. Residential properties are subject to
progressive tax rates at different slabs depending on area. However, there are a number of
exemptions. Federal Government and provincial government buildings if not leased in perpetuity are
exempt. Likewise, owner-occupied residential buildings of less than five Marlas are also exempt.

Commercial properties are categorized into five categories: A1, A, B, C and D. These localities are
assigned locality factors of 13, 10, 7, 5 and 4. The UIPT is structured in a manner that makes square
yards of land and square feet of subjected to same tax rate. This implies value of land to be nine
times the value of the structure (Text Box 1).56This feature of the tax structure might be seen as
discouraging efficient land use and encouraging a less intensive use of land.

Reform options
• A consistent structural reform would be to tax land and improvement value equally, hence the area unit
would become square feet of land plus square feet of buildings.
• Undervaluation of properties is a major constraint to more productive tax in Khyber Pakhtunkhwa. The
locality factor used in calculation of property tax for commercial properties implicitly captures the tax

54
Calculated as a coefficient of regression of log(property tax revenue) on log of (GDP)
55
Calculations are based on:
a
Provincial revenue time series data provided by Finance Department Government of Khyber Pakhtunkhwa
b
Population data estimated at growth rate of 2.82% till 2016-17 while for 2017-18, census data of 2017 is used
c
PBS GDP deflator
d
Khyber Pakhtunkhwa GDP estimates from World Bank (2015)
Note: Base Year is 2005-06=100
56
R. Bahl, S. Wallace & M. Cyan, "Pakistan: Provincial Government Taxation," International Center for Public Policy Working Paper
Series, at AYSPS, GSU paper0807, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State
University, 2008

30 | P a g e
 rate and assessed property value. 57 Hence, it is important to ensure that the locality factors represent
the true value of the properties. Periodic assessment ratios may be undertaken to inform the revision
of the locality factors.
• For broadening of tax base the
Text Box 1. Taxing commercial property
following is suggested:
• Eliminate the 5 Marla
The current system implies differential treatment for land and
exemption58
improvements. There is an important assumption that a ‘value
• Eliminate the tax unit’ one square foot of land and nine square feet of structure.
preference for owner Under the current system:
occupiers. 1
( 𝐿 + 𝑆) × 𝑎 = 𝐴𝑅𝑉
• Tax industrial properties 9
at commercial rates. where
• Payment in lieu of tax 𝐿 = Land area in square feet
introduced for provincial 𝑆 = Covered area in square feet
government properties.
𝑎 = locality (valuation) factor
• Improving the organizational
efficiency may require HR In other words,
rationalization and introducing 1
( 𝑉𝑙 + 𝑉𝑠 ) = 𝐴𝑅𝑉
performance pay system.59 9
and
How much property tax revenue can 𝑇𝑙 1 𝑉𝑙
=
be collected? 𝑇𝑠 9 𝑉𝑠
where
The major issue to be addressed 𝑇𝑙 = the tax rate on a square foot of land
with property tax policy is the need 𝑇𝑠 = the tax rate on a square foot of structures
to raise the level of property tax 𝑉𝑙 = value per square foot of land
revenue. In terms of how much 𝑉𝑠 = value per square foot of structures
revenue the Government of Khyber Since 𝑇𝑙 = 𝑇𝑠
Pakhtunkhwa wants to collect from 𝑉𝑙 = 9 𝑉𝑠
UIPT would depend on a reasonable
target setting. If a 0.1 % of provincial GDP is considered a reasonable target for UIPT, this would
require increasing the correct level of collections by more than 3 times. As against this, the current
target based on 15 % increase over the estimated baseline collection for 2018-19 will only marginally
increase the ratio from 0.023 % to 0.031 % of GDP (Table 7).

Table 7: Annual revenue targets for UIPT 2018 till 2023 (Rs in Million)

Milestone Baseline 2019-20 2020-21 2021-22 2022-23

Increase in revenue collected from 1,200 1,380 1,587 1,825 2,098
UIMPT

57 𝑇𝑎𝑥 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑙𝑡𝑦 (𝑇𝐿 ) = 𝐴𝑟𝑒𝑎 𝑈𝑛𝑖𝑡𝑠 (𝐴) × 𝑙𝑜𝑐𝑎𝑙𝑖𝑡𝑦 𝑓𝑎𝑐𝑡𝑜𝑟 (𝐶)where implicitly, 𝐶 = 𝑟 ×
𝑣 ; 𝑟 is the tax rate and 𝑣 is the implict assesed property value per unit
58
Property tax is a tax to cover the local services cost and is argued to be a fiscal tool and not an instrument of social redistribution.
However, exempting lowest value property premises from property tax is still an option. Optimally, the vertical equity aspect can best be
addressed through the expenditure side of budget.
59
Excise and Taxation (E&T) Department in Punjab implemented a series of human resource reforms beginning in 2009 designed to
appropriately incentivize tax collection and improve overall departmental performance. The results show that treatment circles
outperformed control circles by a margin of over 12 %age points in total collections over the two-year treatment period (A. Khan, A.
Khawaja, and B. Olken, “Property tax experiment in Punjab, Pakistan” International Initiative for Impact Evaluation, 2014.

31 | P a g e
2.5.3 MOTOR VEHICLE T AXES

There are two motor vehicle taxes being collected by E&TD: a onetime registration fee and an annual
tax (the “token tax”). Over two-thirds of motor vehicle revenues are collected from the token tax.60 In
per capita terms, these motor vehicle taxes are equal to only about Rs 34. They account for over 3
% of own source revenues (more than the property tax) but are equivalent to0.03 % of GDP (Table
8)

Table 8: Revenue from Motor Vehicle Taxes61

Years Token tax MVT (Million Rs)a % of own Per capita % of GDP d
source nominal
revenue b amount (Rs)c

2013-14 20010.69 844.399 4.2 31.4 0.04

2014-15 22706.47 766.086 3.4 27.7 0.03
2015-16 25576.44 906.686 3.5 31.8 0.03
2016-17 28347.01 981.096 3.5 33.5 0.03
2017-18 31267.91 1025.913 3.3 33.6 0.03

The base of both forms of motor vehicle

tax is some combination of the number of Text Box 2. Calculating advalorem fuel tax rate
motor vehicles, their value, and their
engine capacity. ‘Base effect’ on revenue Advalorem Base(𝐵) = 𝐶 × 𝑝
is captured by growth in the number of
vehicles and increases in the value of where
vehicles. Registration fee is applied at an
advalorem rate. One might expect a 𝐶 = Consumption of fuel in million litres
natural revenue growth from motor vehicle
taxes as both the number and value of 𝑝 = price per litre
vehicles have been increasing. However,
If Revenue target (Million Rs) = 𝑅
there is a growing tendency to register the
new vehicles in the capital territory – ‘the
then
Islamabad effect’. 62 While there may be
extraneous reasons for this preference, it 𝑅
Fuel tax rate(𝑓) = × 100
has the implication of revenue leakage. 𝐵
Vehicles registered in Islamabad but
substantially plying on Khyber Pakhtunkhwa roads while contributing to traffic congestion and road
use, do not pay the usage charge – the token tax – to Khyber Pakhtunkhwa.

60
Based on actual receipts of 2017-18 (Annual Budget Statement, 2018-19)
61
Calculations are based on:
a
MVT includes both Token tax and Registration fee
b
Provincial revenue time series data provided by Finance Department Government of Khyber Pakhtunkhwa
c
Population data estimated at growth rate of 2.82% till 2016-17 while for 2017-18, census data of 2017 is used
d
Khyber Pakhtunkhwa GDP estimates from World Bank (2015)
62
Commercial vehicles prefer to register in Baluchistan due to low tax rates

32 | P a g e
Reform Option

A piecemeal reform option can be increasing the registration fee and token tax. However, the increase
will be limited by a parity constraint with other provinces and any abnormal increase may result in
compounding the diversion from Khyber Pakhtunkhwa. Revenue targets for the next 4 years are
presented in Table 9.

A more far-reaching comprehensive reform would be the adoption of a provincial motor fuel tax. While
the token tax is meant to be a user charge for road use, it does not reflect the amount of road use. A
tax on motor fuels would better serve this objective and would mobilize significant revenues. A
general outline of the motor fuel tax is given below: 63
• The tax would be levied on an ad valorem basis with the rate set at the discretion of the province. The
target can be set to equal the provincial and districts roads O&M expenditure and the current capital
expenditure on roads. This means that fuel prices would vary from province to province (See Text Box
2 for an illustration of calculating the fuel tax rate)
• The tax rate also could vary by type of fuel, at the discretion of the provincial government.
• The tax would be collected by the oil marketing companies based on fuel sold in the province. The
federal government would then transfer the revenues to the provincial treasury.

Table 9: Annual revenue targets for MVT 2018 till 2023 (Rs in Million)

Milestone Baseline 2019-20 2020-21 2021-22 2022-23

Increase in revenue collected from 1,225 1,408 1,620 1,863 2,143
MVT

2.5.4 T AXES OF PROFESSIONS , TRADING AND CALLINGS

Revenue performance of tax on professions is described in Table 4 above. Professions tax has
registered the highest average annual growth rated during last five years. The tax is levied as a flat
amount but the rate varies by type of profession. The professions tax has more the feel of a user
charge on businesses. However, the tax is also levied on certain types of employments (which
includes employees of federal and provincial governments and corporate businesses) based on
income thresholds which makes it look like a tax on income.64In total, 31 main categories are subject
to professions tax, majority of which are also subject of sales tax on services.

If one accepts that the tax is a fee levied on businesses for services provided by the provincial
government, it is not obvious there should be an additional tax on business subject to property tax.
Educational institutions, petrol/CNG stations, vehicle service stations are taxed under both the
property tax regime and professions tax.

A fundamental reform would be to rationalize the list of professions with a view to remove duplicity
between the tax on professions and sales tax on services. Businesses like hospitality sector, wedding
halls/lawns, advertising agencies, contractors, transport companies, cable operators have an
essential character of services and may be taxed only under the sales tax on services.

63
R. Bahl, S. Wallace, and M. Cyan, "Pakistan: Provincial Government Taxation," International Center for Public Policy Working Paper
Series, at AYSPS, GSU paper0807, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State
University, 2008.
64S. J. Malik, “Study on Tax Potential in NWFP”, 2004.

33 | P a g e
2.5.5 OTHER TAXES

Reforms for other taxes may include:

• Abolition of hotel tax in the wake of being a taxable service under the sales tax on services. The
opportunity cost is loss of PKR 45 million 65 but can be offset by increased collections from services
tax. This is because the base for sales tax on services is larger than the hotel tax. While the former is
levied at the rate of 15 % on the entire value of supplies, tax on hotels is collected at the rate of 5% of
the room rent.
• Conducting periodic sales ratio studies for appraisal of market value of properties for the purpose of
land revenues (for registrations and mutations). The land valuation process will require greater
coordination between Board of Revenue and the Excise & Taxation Department as these two
institutions share a common tax base for urban properties.
• Sale of stamps has a significant contribution in stamp duty collections. In 2017-18, in total stamp duty
collection of PKR 1,235 Million, sale of stamps accounted for 47% of the revenue. Leakages reported
in sale of stamps can be prevented by adopting a digital system of stamp issuance. In Punjab, the BoR
has successfully adopted the e-Stamping solution which can easily be replicated in Khyber
Pakhtunkhwa

2.6 EXPENDITURE M ANAGEMENT

Figure 1 depicts receipts and expenditure profile of Khyber Pakhtunkhwa. While increasing own
source revenue is crucial to creating fiscal space, equally important is improving expenditure
efficiency. The Finance Department intends to initiate a set of reforms on the expenditure side: (1)
HR rationalization, and; (2) Pension and retirement age reforms. The impact of these reforms has
partly been indigenized in the Budget Strategy Paper -1 of the Finance Department where the cash
balances disappear in its forecast from 2019-20 onwards. Overall fiscal forecast is presented in Table
10.

Table 10: Fiscal forecast 2019-20 to 2022-2366 (PKR in Million)

Baselinea Yearly Targets

Milestones 2019-2067 2020-21 2021-22 2022-23
NFC receipts (including NHP) b 588,935 504,267 572,459 649,215
Revenue collected from sales 13,607 20,354 25,000 30,000 35,000
tax on services
Revenue collected from urban 1,200 322 1,587 1,825 2,098
immovable property tax
MVT 1,225 1,433 1,620 1,863 2,143
Other Tax Revenue 7,354 10,914 8,705 9,472 10,306

65 Budget Estimates for receipts under Hotel Tax for 2018-19

66 a
the baseline for non-tax revenue is based on Budget Estimates for 2018-19. For tax revenue, the baseline differs because of revision
in target for collection from sales tax on services
b
NFC receipts assume scenario 3 to prevail during 2019-20 and scenario 2 thereafter (Refer Table 4)
c
Budget Strategy Paper -1, 2019-20, Government, Of Khyber Pakhtunkhwa
67 Adopted from Budget White Paper 2019-20

34 | P a g e
 Baselinea Yearly Targets
Non Tax Revenue 17,439 20,382 20,774 22,674 24,747
Total own source revenue 40,825 53,404 57,686 65,834 74,294
Other Receipts
Foreign Project Assistance c 82,000 60,000 63,000 63,000
Others 24,660
Total Receipts 749,000 621,953 701,293 786,509
Current Expenditure c 457,000 534,471 589,274 644,076
Fiscal Space 292,000 82,238 104,371 134,433
Provincial ADP (Including FPA) 190,000 61,237 78,413 99,703
District ADP 46,000 26,243 33,606 42,730

2.7 RESOURCE G AP
SDS indicative resource requirement (development) for the coming four years is estimated to be PKR
1,050,886 Million. However, the cumulative available resource is PKR 324,753 Million, leaving a
resource gap of PKR 621,533 Million. Year wise investment requirement against the available
resource is mapped in Figure 5 below:

Figure 5: Resource Gap of SDS

Resource Gap for SDS

200,000
PKR in Millions

150,000

100,000

50,000

0
2019-20 2020-21 2021-22 2022-23

Available Resource Resource Gap

This gives a cumulative throw forward of 2.25 years (which means that that all the interventions of
SDS will take over twice the time period i.e. 9 years to be completed. However, given that the existing
ADP is already having a throw forward 6 years, the inertia may stretch the throw forward beyond 6
years. Thus it is important that the P&D Department starts rationalizing the ADP with the aim to bring
down the throw forward to at least 3 years. Thematic area wise allocation is given in table 11.

Table 11: Year-Wise Financing Requirements for SDS Thematic Areas (PKR in millions)

35 | P a g e
 Thematic Area 2019-20 2020-21 2021-22 2022-23 Total
01-Education and Lifelong Learning 51,552 54,311 63,229 74,891 243,983
02-Health and Wellbeing 18,445 17,099 17,637 16,400 69,582
03-Economic Growth and Employment
35,567 39,075 38,463 40,653 153,758
Opportunities
04-Energy Security 29,845 31,635 31,676 33,444 126,600
05-Local Governance, Urban and Rural
12,389 24,120 18,293 26,107 80,909
Development, Housing and Transport
06-Agriculture, Food Security and Safe
13,791 12,938 12,895 12,875 52,499
Environment
07-Narrow the Trust between Citizen and
State through Peace Building and Rule of 31,709 40,549 39,808 32,974 145,041
Law, Transparency and Accountability
08-Adequate Water for Agricultural and
42,227 45,517 46,502 44,269 178,515
Domestic Uses
Grand Total 235,525 265,244 268,503 281,614 1,050,886

36 | P a g e
3. THEMATIC AREA 1: QUALITY EDUCATION AND LIFELONG
LEARNING

The province faces a number of challenges in education but at the same time steady reforms and
availability of increasingly higher budgets, particularly in the primary and elementary sectors, over the
last five years, have given rise to promising opportunities and a relatively solid base. Since education
is already the biggest employer and the biggest item in the provincial budget, the challenge will now
be to build on the early gains, maintain the pace of reforms, and innovate; and yet ensure that more
progress is financially sustainable.

3.1 OVERVIEW
Current studies68 indicate that for grade 3 students, 57% cannot read a simple story in Urdu and 53%
cannot do a simple subtraction. Around 1 million 5-9 years old are out of school, about 800,000 “kachi”
students are in poor learning environment in 21,000 “kachi” classrooms, 90% of primary schools have
less than 4 teachers and there is a shortage of school leaders, the available leadership is
handicapped by limited capacity while the schools lack basic facilities. 1 million 10 to 16-year-old are
out of public schools; rote learning is endemic and assessment tests are poorly structured. Schools
do not report their performance publicly and there is inadequate feedback system from the
community. Merger of FATA in the province has brought in 6000 more schools which are in need of
reform.

The latest school survey69indicates that while the overall Gross Enrolment Ratio (GER) for primary
level for male children increased to a full 100% that for female child remains at a dismal 74%. Further
analysis of data reveals that figures from the merged districts are even lower for both sexes. Survival
to class 5, transition from primary to middle and dropout rates in each class up to 9, remain unhealthy.

The latest data regarding key education indicators in the E&SE sector is below based on KPESED
figures;

TABLE 1: IMPORTANT ENROLMENT AND LITERACY INDICATORS

NMAs Rest of NMAs Rest of

Khyber Khyber
Pakhtunkhwa Pakhtunkhwa
NER at primary level NER at middle level
Male 56% 79% Male 27.2% 49%
Female 42% 57% Female 8.0% 35%
Both sexes 49% 68% Both sexes 19.8% 43%
NER (at matric level for NMAs/Overall for Rest of Literacy rate (10 years & above)
Khyber Pakhtunkhwa)
Male 15% 40% Male 49.7% 71%

68
KPESED figures
69
Early results provided by KPESED. Full report not yet published

37 | P a g e
 NMAs Rest of NMAs Rest of
Khyber Khyber
Pakhtunkhwa Pakhtunkhwa
Female 5% 23% Female 12.7% 35%
Both sexes 10% 32% Both sexes 33.3% 53%
GER at primary level3 Adult literacy rate (15 years & above)
Male 85% 103% Male 45.0% 66%
Female 50% 78% Female 7.8% 29%
Both sexes 68% 91% Both sexes 28.4% 47%
GER at secondary level Youth literacy rate (15-24 years)
Male 29% 55% Male 62.3% NA
Female 26% 32% Female 16.3% NA
Both sexes 18% 44% Both sexes 43.6% NA

Table 2 and 3 reflect the breakdown of the number of students enrolled at each level in government
schools in the NMAs and the rest of the province

TABLE 2: NUMBER OF STUDENTS ENROLLED AT EACH LEVEL IN GOVERNMENT SCHOOLS70

Stages NMA (A) Rest of Khyber Total (A+B)

Pakhtunkhwa (B)
Boys Girls Total % Boys Girls Total % Boys Girls Total
Primary 2900 2018 49192 85 16903 14259 31163 71 19803 16278 3608247
(Class K 51 77 8 47 72 19 98 49
to 5)
Middle 4471 1475 59468 10 49270 32119 81389 19 53742 33594 873366
(Class 6 6 2 8 0 8 4 2
6to 8)
High 1748 4281 21770 4 23330 13904 37234 8 25079 14332 394119
(Class 9 9 4 5 9 3 6
to 10)
Higher 2365 296 2661 0 50313 27737 78050 2 52678 28033 80711
Secondar
y (Class
11 to 12)
Total 3546 2212 57582 10 24666 19139 43806 10 28212 21351 4956443
21 06 7 0 72 44 16 0 93 50

TABLE 3: INFRASTRUCTURE AVAILABLE IN THE E&SE SECTOR71

School Rest of Khyber NMA (B) A+B

level Pakhtunkhwa (A)
Male Female Total Male Female Total Male Female Total
Primary 13377 4594 21971 2844 2117 4961 16221 10711 26932

70 Figures provided by KPESED

71 Figures provided by KPESED

38 | P a g e
 School Rest of Khyber NMA (B) A+B
level Pakhtunkhwa (A)
Male Female Total Male Female Total Male Female Total
Middle 1475 1198 2673 338 207 545 1813 1405 3218
High 1422 805 2227 269 90 359 1691 895 2586
Higher 411 232 643 16 5 21 427 237 664
Secondary
Total 16685 10829 27514 3467 2419 5886 20152 13248

In the higher education, libraries and archives sector, the enrolment and infrastructure in the province
is given below at a glance72.

TABLE 4: ENROLLMENT AND INFRASTRUCTURE IN THE HE AND LIBRARIES73

NMA Rest of Khyber Pakhtunkhwa

Men Women Total Men/Combined Women Total
Colleges 24 15 39 117 100 217
Commerce Colleges 6 0 6 31 05 36
Universities/Sub- 1 0 1 27 2 29
Campuses
Number of Students in 1387 0 1387 20193 743 20936
commerce colleges
Number of students in 17000 3188 20188 125026 75506 200532
general colleges74
Public Libraries 0 0 0 14 0 0
Number of members in 0 0 0 3739 767 4506
public libraries

Taken together, the three sub-sectors present the following challenges to reforms along with some
promising opportunities.

Challenges Opportunities
 The throw forward of ADP schemes in E&SE sector alone is  The province is currently pursuing a five-
Rs. 46.86 billion year blueprint for educational reforms
 More than 75% of total budget is paid on account of salary since 2015 with good help from the
international donors, particularly DFID in
 More salaries and pensions in the already biggest providing technical support
employment sector will not be sustainable in the long term
and may also in fact become a barrier to further reform  Significant progress to overcome the
barriers of weaknesses in data and
 Rationalization of teaching staff is not an option as it may information management, budgeting and
pose a challenge to the other education objectives. financial management, capacity
 Wide disparities between learning attainments of the two limitations and politicization of
genders as well as between the NMAs and the rest of employees, while at the same time tried
Khyber Pakhtunkhwa. to negotiate the geography and social

72
Source: Department of Higher Education, Libraries and Archives. Data is for the year 2018-19
73 Department of Higher Education, Libraries and Archives. Data is for the year 2018-19. Data for FATA colleges has been extrapolated
from Annual Statistical Report 2014-15, EMIS Directorate of Education FATA
74
Extrapolated from Annual Statistical Report 2014-15, EMIS Directorate of Education FATA

39 | P a g e
 Challenges
 Crumbling infrastructure in NMAs due to non-use
 Unsatisfactory learning outcomes
 Lack of teacher effectiveness and accountability
 Inadequate and relatively ineffective use of financing tools
for quality enhancement and the higher transaction costs as
compared to the private sector
 Low Student retention, especially in government run
schools
 In Higher Education, Archives and Libraries sector, the
most obvious challenge is that of a lack of strategic
medium- and long-term plans with clear outcomes
 The mushroom growth of Universities is a big challenge in
terms of education quality, and financial sustainability
 There is also a lack of formalized backward and forward
linkages of higher education with the E&SE and
employment sectors as well as a lack of coordination
mechanism with universities
 In the days of e-libraries, the libraries and archives sub
sector is a left-behind relic of an old system which relied on
the expansion and maintenance of physical infrastructure,
paper based cataloguing and member visits. There are
scant or non-existent digital services75
 No active and dynamic horizontal linkages with the
catalogues or e-databases of Higher Education
Commission and none even with the established libraries of
the colleges under the higher education directorate of the
province itself
 Extremely low membership and skewed beneficiary gender
ratio while the awareness among the population and
students about the library services is also low
 Libraries are ill equipped to facilitate research
Opportunities
fabric of the province76
 Political will remained strong through the
years and the increasing budgets were
testament. This needs to be built upon
 In the higher education sector, a
relatively clean long-term policy slate
affords a rethinking of the role of the
government. A decision about it being a
regulatory body or a service provider, can
be made now. Even if the current role in
both capacities is to continue, clarity and
clearly delineated departmental functions
will be of benefit
 Owing to its nature of employing and
serving the most educated, the newly
introduced provincial digital policy77 will
find its best implementation proving
ground in the sectors of higher education,
libraries and archives. Several
innovations in this sector will benefit
directly and more pronouncedly from
introduction of digital governance and
access

3.2 STRATEGY
3.2.1 OBJECTIVES

Sector Objective
Primary and 1: More children in school, staying longer, and learning more (SDG 4.1 targets
Secondary universal primary and secondary education by 2030)
Education
2: Effective Teaching & Learning (SDG 4.c asks for substantial increase in the
supply of qualified teachers)
3: Better Schools &Safe Facilities (SDG 4.a asks for building and upgradation of
education facilities that are child, disability and gender sensitive and provide safe,
non-violent, inclusive and effective learning environments for all)
4: Improved Access and Equity

75
Presently, only the provision of internet is listed as a digital service
76
KESP 2015-20
77
Khyber Pakhtunkhwa Information Technology Board 2018, Digital Policy 2018-23

40 | P a g e
 Sector Objective
5: Good Governance and Management
Higher Education, 6: Improved Access and learning outcomes at higher education level (SDG 4.3
Libraries and targets equal access)
Archives
7: Effective governance for better service delivery
8: Improve Reading and Research culture with quality and user-friendly library and
Archives services

3.2.2 MILESTONES

Milestone Baseline Yearly Target Means of

Verification
2019-20 2020-21 2021-22 2022-23
Basic literacy and numeracy TBD78 Grade 2/early
skills established in early grade
primary grades sample-
based
assessments
Reading proficiency along TBD79 Grade 4
with basic level of knowledge sample-
and understanding achieved based
by the end of primary grades assessment/
Grade 5
assessment
Learning improved in TBD80 Sample
secondary grades based Grade
8
assessment
Participation Rate (5-16 80% 82% 84% 88% 90% Annual
years) school
survey, MICS
Retention Rate for Grade-581 68% 70% 73% 75% 78% Annual
School
Survey
Retention Rate for Grade-10 58% 60% 62% 65% 70% do
Primary to Secondary 90% 91% 92% 93% 94% do
Transition Rate
Students Attendance Rate 80% 82% 83% 85% 87% IMU
improved
Primary School with improved 45% 50% 60% 70% 80% Annual
student teacher ratio (40:1) School
survey
% of schools with at least 4 48% 50% 75% 100% 100% IMU
teachers available

78
To be decided after the first assessment is conducted
79
To be decided after the first assessment is conducted
80
To be established once first assessment is conducted
81
SDG 4.1 targets 100% by 2030 for both primary and secondary education

41 | P a g e
 Milestone Baseline Yearly Target Means of
Verification
2019-20 2020-21 2021-22 2022-23
Proportion of Teachers with 50% 53% 56% 60% 65% do
required teaching
competencies/content
knowledge82
Teachers attendance 90% 90% 90% 90% 90% IMU
improved
Number of primary schools 13,000 15,000 All All All IMU
where Teaching and Learning Schools Schools Schools
improved through SQMI
In-service teachers trained in 16 27 34 34 34 HR
all districts (including NMAs) districts districts districts districts districts
Safe schools through Data not 25% 35% 45% 55% do
structural and non-structural available
DRR/School safety
measures83
"Girls Stipend Program" for 100% 100% 100% 100% 100% IMU
eligible students enrolled
(grade 6-10)
OOSC of age 5-16 enrolled 100,000 125,000 175,000 225,000 275,000 do
through Education Voucher
Scheme where primary and
middle level government
schools are away/over
crowded
OOSC of age 5-10 enrolled 50,000 75,000 110,000 150,000 200,000 do
through establishment of
"Girls Community Schools"
where primary level
government schools are
away/over crowded
OOSC of age 10-16 enrolled 20,000 25,000 35,000 50,000 70,000 do
through "New Low Fee
Private Schools" in areas
where the primary and middle
level government schools are
away/overcrowded,& without
the presence of low fee
private schools
Primary level "Accelerated 23,271 35,656 53,485 71,313 89,141 do
Education Program" for never
enrolled OOSC of age 8-12
Middle level "Accelerated 4,288 8,858 11,811 14,764 20,670 do
Education Program" for
OOSC of age 13-16, who
have completed their primary
Establish evening shift middle 12,600 15,120 18,900 25,515 38,272 IMU
schools in government

82
This and the next two Milestones are specifically related to SDG 4.c
83
Related to SDG 4.a

42 | P a g e
 Milestone Baseline Yearly Target Means of
Verification
2019-20 2020-21 2021-22 2022-23
primary school premises for
OOSC/children at risk of
being out of school of age 10-
16, who have completed their
primary
Districts implementing District 25 27 30 34 34 EMIS
Education Plans (DEPs) and
achieving 80% of the targets
Increase the monthly 97% 97% 97% 97% 97% EMIS
coverage and mandate of Schools Schools Schools Schools Schools
IMU's monitoring (all public
schools and E&SEF assisted
schools)
Increase in development 16% 16% 16% 16% 16% Provincial
budget in line with 5 year plan budget
and ESP costing
Execution of non-salary 97% 97% 97% 97% 97% Bureau of
recurrent and development Statistics
budget
Number of college student 220720 224500 235600 247300 260000 Higher
enrolment Education
EMIS
Number of Teachers NA 512 512 512 512 do
benefited for Faculty (2 per (2 per (2 per (2 per
development programme college) college) college) college)
%age of Revenue generated NA 3 4 6 7 Annual
by HED as part of expenditure budget
Number Master trainers NA 200 800 1400 2000 b) Data from
trained and available in CBT Labor market
surveys.
Number of Training modules NA 5 20 50 100 c) Tracing
designed and developed for Studies
CBT

3.3 SECTOR PLANS

3.3.1 PRIMARY ELEMENTARY AND SECONDARY EDUCATION

Going forward, the sector will rely heavily on the outcomes and further build-up of the Education
Sector Plan 2015-20, and the goals set out in the 100 days plan of the provincial political government
for its tenure 2018-23. The objectives will keep tightly to the timelines envisaged in the Sustainable
Development Goals (4.1 to 4.7) and the means of their implementation (4.a, b and c).84

The sustainable development strategy approached all of these in a single narrative as follows;

84
For more on the SDG 4, please visit https://sustainabledevelopment.un.org/sdg4

43 | P a g e
 • All interventions will ensure equal access and affordable quality in education delivery as well as
education management
• Gender and other disparities will be eliminated through targeted and deliberate initiatives and flow of
funds towards initiatives for the girl child, disabled and those in vulnerable situations, particularly from
the merged districts
• New infrastructure and upgradation will be conditioned upon specific provisions for child and disability
friendliness, gender sensitivity, safety and non-violence, inclusivity and effectiveness for learning in line
with the 100 days’ plan of the government.

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

3.3.1.1 R EFORM I NITIATIVES

Reforms initiatives given below spell out the sector specific initiatives covering actions regarding
legislation, policy, institutional reforms, the merged districts, innovations and Public Private
Partnership (PPP) regime.

Reform Area Reform Initiative

Legislative, Link teachers’ promotions and incentives to performance by bringing in more children to
Policy and schools, retaining them, and restructuring exam results.
Institutional
Reforms Reform implementation devolved to local governments for monitoring and reporting
Redevelop teaching cadre employment rules
Redevelop approach to training and selecting new teachers
Develop a consolidated, needs based, high quality approach to Continued Professional
Development
Launch an endowment and draw down fund for use in emergency situations
Peg education budget to inflation
Motivate and train teachers and head teachers to lead better schools through
performance incentives and awards.
Safe school initiative-Institutionalizing disaster preparedness in education sector
Strengthen and empower district education management and deploy improved
evidence-based performance management
Fulfill the 5 point criteria set by KPESED for turning the schools into “Good Schools”
Regional Institutes of Teachers Education abolished
Schools leadership model fully deployed across all schools in Khyber Pakhtunkhwa with
7000 new managers deployed
Recruitment of 65000 teachers in the Primary and Secondary Education over five years
Continued Professional development for teachers expanded to all districts with the help
of new remote training technologies, outsourcing and international accreditation
programs
Innovation in Introduce HR strategy and IT solution encompassing need assessment, recruitment,
governance training, development, career progression, career planning, refresher trainings,
and service performance management and feedback, transfers, postings and retirement planning;
delivery and with links to budgeting/finance module, the planned Learning Management System
module and the currently running EMIS (Linked with Khyber Pakhtunkhwa IT Board)

44 | P a g e
 Reform Area Reform Initiative
Linkages with Introduce and promote IT solutions by constituting an innovation fund under the KPEF
other sectors and in coordination with Khyber Pakhtunkhwa IT board
Khyber Pakhtunkhwa school safety framework developed
New Grade 8 assessments introduced
Matric examination revamped
Each child will be given a Unique I.D, the same as that provided in form B of NADRA
Issuance of annual education report by the KPESED specifying the progress against
goals. Annual school performance report shall also be sent to relevant tehsil Nazim,
local MPA and local government elected representatives; and the education minister
triggering timed and automatic requests to the parliamentary committee on education
for review of the annual education report of the province. (Link with Local government
and Provincial Assembly’s committee on education)
Establish a uniform procurement management system with dedicated Procurement
specialists (Linked with Khyber Pakhtunkhwa IT Board)
School children health monitoring program with periodic and regular medical staff visits
(Linked with Health sector)
Public Private Expand and improve existing public-private partnerships in line with the policy,
Partnership institutional and costed options recommended by the new PPP strategy developed by
Khyber Pakhtunkhwa Education Sector Program
Support the development of a vibrant private sector in the education landscape that
compliments education sector delivery at all levels of education. 300,000 students will
be enrolled through ePPPs and 1000 new private schools will be opened
Training and accreditation of teachers through outsourcing to the private sector for
better efficiency and globally recognized certification. 2x the number of teacher training
will be outsourced to the private sector
District Education Offices to mobilize the local community through PTC for enrolling out-
of-school children in areas where both public and private sectors provide schooling
facilities with all services
In far-flung areas where neither public nor private sectors provide schooling, surveys
will be followed by MoUs with local NGOs and community based organizations to
provide schooling
New schools opened through PPP improving access in underserved area. Facilitate
private sector growth through the already established Private School Regulatory
Authority
Special Encouraging health awareness by providing 5000 special play areas in Pakhtunkhwa
Initiatives schools and by partnering with the ministry of sports, culture and tourism to fund and
hold district and provincial tournaments
Encouraging environmental awareness among youth/students by launching the
campaign of planting 500,000 new trees

3.3.1.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

45 | P a g e
 Intervention Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Primary schools with required Student Teacher Ratio (1:30) 7,200 10,800 14,400 18,000

Strengthen Induction Program for all Grades/ Titles/ Posts of 356 116 116 116
Teachers
High quality continuing professional development 378 520 518 518
implemented in Khyber Pakhtunkhwa (including NMAs)
Improved assessment and examination system 641 724 767 792
Enhance capacity of key institutions to manage reform 328 10 0 0
initiatives
Establish sustainable approaches to provision of basic 13,445 10,022 8,085 7,630
facilities
Safe schools through structural and non-structural DRR 672 501 404 382
measures
New Schools Constructed/established and Existing Schools 7,982 8,919 9,956 11,105
upgraded/Retrofitted
Regularize Monitoring of Teaching and Learning in Primary 184 170 162 162
Schools
(Launch new benefits aimed at children most at risk of 1,717 1,717 1,717 1,717
educational deprivation) - Institutionalized, data governed
"Girls Stipend Program" for eligible students enrolled in
secondary schools (grade 6-10) across all the districts

"Education Voucher Scheme" for OOSC of age 5-16 in areas 2,883 4,533 6,783 9,633
where the primary and middle level government schools are
at a distance or overcrowded and with presence of low fee
private schools
Establish "Girls Community Schools" for OOSC of age 5-10 in 1,747 2,847 4,347 6,347
areas where the primary level government schools are at a
distance or overcrowded, and no low fee private schools

Establish "New Low Fee Private Schools" for OOSC of age 697 1,212 1,948 2,977
10-16 in areas where the primary and middle level
government schools are at a distance or overcrowded, and
without the presence of low fee private schools

Primary level "Accelerated Education Program" for never 786 1,588 2,407 2,958
enrolled OOSC of age 8-12
Middle level "Accelerated Education Program" for OOSC of 179 356 531 662
age 13-16, who have completed their primary level education
Establish evening shift middle school in government primary 416 699 1,082 1,656
school premises for OOSC/children at risk of being out of
school of age 10-16, who have completed their primary level
education
Testing and updating of population data 75 75 50 50
Development of district officials’ management skills 10 10 10 10
Integrated Education Management System 22 22 22 22

46 | P a g e
 Intervention Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Institutionalization plan successfully implemented & IMU 134 134 134 134
restructured accordingly
Integrated module of Human Resource Management (as part 4 2 0 0
of EMIS) conceptualized, designed, piloted, tested and
deployed. The module will allow, inter-alia, max number of
users, across all computing platforms, benefits administration,
live support, performance management, scheduling, time
tracking and attendance
Increase the coverage and mandate of IMU's monitoring 80 20 20 20
OAMS improved and additional indicators incorporated 2 2 2 2
Teacher Incentive Programme successfully executed 110 110 110 110

The above estimates include costs of development interventions in the NMA.

3.3.2 HIGHER EDUCATION , LIBRARIES AND ARCHIVES

The SDG 4.3 targets equal access for all women and men to affordable and quality higher education.
In the higher education sector, the department is still working on a medium-term strategy but have
already in place a Sector Plan for the next five years. Employing a bottom up approach, the following
strategy will be adopted in this sector by the province:

Reform Area Reform Initiative

Legislative, Human Resource Development of teaching and administrative staff of higher education
Policy and
Institutional Improved policy, planning, financial management, monitoring and regulation of higher
Reforms education by establishing a reform unit and quality assurance cell
Establish Financial Management Cell in the Higher Education
Every University shall develop and implement its strategic/business plan in view of the
depleting resources and increasing demand for higher education.
A policy decision shall be taken to streamline and locate the Bachelor of Science
system either in the universities or collages
All appointments promotions and award of foreign scholarships shall be based on
performance in terms of research papers, pass %age of students etc.
Establish Higher Education Advisory Council
Innovation in Introduce HR strategy and IT solution encompassing need assessment, recruitment,
governance and training, development, career progression, career planning, refresher trainings,
service delivery performance management and feedback, transfers, postings and retirement planning;
and Linkages with links to budgeting/finance module, and the currently running Higher Education MIS
with other (Linked with Khyber Pakhtunkhwa IT Board)
sectors
Issuance of annual education report by the Higher Education Department specifying
the progress against goals. Annual performance report to also sent to relevant tehsil
Nazim, local MPA and local government elected representatives; and the education
minister requesting timed and automatic requests to the parliamentary committee on
education for review of the annual higher education report of the province (Link with
Local government and Provincial Assembly’s committee on education)
Promotion of higher education through performance and need based scholarship
incentives

47 | P a g e
 Reform Area Reform Initiative
Provision of a single Higher Education sector LMS with provision for admissions,
course management, fee payment, scholarships and results (Link with Khyber
Pakhtunkhwa IT board)
Establish a uniform procurement management system with dedicated procurement
specialists
Revise & update curricula of higher education in the light of recommendations of
National Curriculum Review Committees of HEC and National Accreditation Councils
(NACs).
Patent and copyrights training for the faculty of higher education
Introduce low cost split degree graduate indigenous program of studies at appropriate
level and for targeted audience.
Introduce exchange programs for faculty & students to undertake teaching and
collaborative research amongst national & international leading universities.
Digital library and archives services with a centralized catalogue, membership, books
exchange and delivery, awareness campaigns, e-books and e-textbooks for students
(Link with Khyber Pakhtunkhwa IT board)
Public Private Expand and improve existing public-private partnerships in line with the policy,
Partnership institutional and costed options recommended by the new ePPP strategy

To implement the above strategy, the cost implications for the next four years will be as follows

Activity/Initiative Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Hiring of Key sectoral experts 20 20 20 20
Development of Provincial HE Policy 2 0 0 0
Development of Higher Education Sector Plan 5 0 0 0

System Analysis 3
Design, Development, testing and debugging 4

Pilot Launch 1
Conversion of old systems, data entry and Deployment 4

Commissioning 0.5
Conversion into council of Higher Education 30 30 30

Completion/Operationalization of Colleges 2000 3000 3000 3000

Major/Minor Repair 300 400 500 600

Additional/Missing Facilities 600 600 800 800
Purchase of necessary items 175 125 150 150
Strengthening & Extension of BS Program 3500 1000 1000 1000

Faculty Development 300 400 400 500

Purchase of land or Allotment of state land (including for 2000 - - -
FATA university in Darra Adam Khel)
Recurring Expenditure for 03 years 400 400 500 500

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 Activity/Initiative Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Implementation of infrastructure development policy 2000 3000 3000 3000
Patents and copyrights training for faculty of higher 7 5 5 5
education
Establishment of patent and copyrights coordination and 2 2 3 3
facilitation cell at Higher Education Department
Research grants program for faculty of higher education 40 50 60

Conversion of 20 college libraries into public libraries with 70 50 50 50

evening shifts
Repair and maintenance 30 30 40 50
Strengthening of existing public libraries' infrastructure for 20 30 40 50
better integration into digital library paradigm

Digital library and archives services with a centralized 10 20 20 20

catalogue, membership, books exchange and delivery,
awareness campaigns, e-books and e-textbooks for
students

Conversion of 14 College libraries into public libraries with 50 50 50 50

evening shifts (One male and one female in each NMA)

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4. THEMATIC AREA 2: HEALTH AND WELL BEING

4.1 OVERVIEW
Health indicators 85 of the people of Khyber Pakhtunkhwa show an unsatisfactory picture which
demands accelerated, deep rooted, viable institutional and sustainable solutions to cope with the
needs of the growing population of the province. These unsatisfactory indicators are in part due to
the vulnerability of the people of Khyber Pakhtunkhwa to a number of poor social determinants of
health such as illiteracy, unemployment, low household income, gender inequality, social exclusion,
rapid urbanization, and environmental degradation. Besides, this vulnerability to the health also
stems from the many challenges to the health system ranging from poor health indicators, low health
investment, expenditure and utilization. The deteriorated status of health has some other contributing
factors such as water and sanitation, security, internally displaced people and the communication
structures such as roads and transports.

The province is currently facing double burden of communicable and non-communicable diseases
while the health system is working under systemic inertia. While communicable diseases still account
for a predominant share of morbidity and mortality in the province, the prevalence of non-
communicable diseases is rapidly rising. Some areas and segments of the population, especially
women and children, bear a disproportionately higher burden of ill health and yet have limited access
to health care services.

Khyber Pakhtunkhwa has a high incidence of

preventable deaths among mothers, infants, and SKILLED BIRTH ATTENDANCE
young children. In 2012, the Maternal Mortality
Ratio (MMR) was estimated at 206 per 100,000 KPHS 2016-17
live births, currently translates into an annual
death toll of nearly 1,700 women, primarily due
PDHS 2012-13
to conditions that could easily be prevented with
basic healthcare. 86 Until recently, the health
0 20 40 60 80
system’s response to lowering maternal and
% OF BIRTHS BY CHILDREN BORN
child mortality has been focused on increasing
women’s access to antenatal, postnatal and
obstetric care; improving nutrition; expanding immunization; and ensuring treatment for the two major
child killers, diarrhea and pneumonia.

In recent years, important improvements in Mother and Child Health indicators have been achieved
in Khyber Pakhtunkhwa. Between 1990-91 and 2017, it is estimated that skilled birth attendance rose
from 12% to about 72%.87 The proportion of women receiving antenatal care went up from 18% to
61%.88

85
Multiple Indicators Cluster Survey, 2017
86
Sathar Z.A., Wazir, M.A., and Sadiq, M.. Prioritizing family planning for achieving provincial maternal child health and development goals,
2014. Islamabad: Population Council.
87
Khyber Pakhtunkhwa Health Survey, 2017
88
(PDHS 1990-91 and 2012-13).

50 | P a g e
Pakistan has one of the highest prevalence of under-weight
HEALTH IN FIGURES
children in South Asia. Similarly, stunting, micronutrient
deficiencies and low birth weight babies contribute to an already
 Health sector share (both
high level of mortality in mothers and children. Although major
provincial and district): PKR
segments of the population are at risk of malnutrition, children
78.6 Billion or 12% of total
are the most vulnerable. In Khyber Pakhtunkhwa, underweight
prevalence (moderate and severe) is 20.8%, of which over a Provincial Budget (16% higher
than share in last year’s
third (7.5%) is classified as severe. Similarly, stunting
budget)
prevalence is 41.4% of which around half (20.7%) is severe.
 Composition of budget by
Wasting (low weight for height) prevalence is 8% (3% severe).
Lastly, overall overweight prevalence is 6.8% for the entire level of health care: Primary
(27%), Secondary (32%),
province. 89 According to PDHS 2017-2018, nutrition levels in
Tertiary (20%), Cross Cutting
urban areas are better in rural areas; a higher proportion of
and Administration (21%)
children in rural areas (41%) than urban (31%) are stunted.
 Ratio of Current and
Education of mother and the level of wealth of the household is
also related to stunting.90 Development shares in total:
84% – 16%
There has always been a strong emphasis on provincial  Current budget: PKR 66
immunization programmes, yet vaccination coverage remains Billion – posting an increase of
low. Children age 12-23 months are the youngest cohort to have 30% over the last year mostly
reached the age by which a child should have received all basic due to recruitment of doctors
vaccinations. Overall, 66% of children age 12-23 months have and other health staff
received all basic vaccinations, and 51% have received all age-  Ratio of Salary and Non-
appropriate vaccinations. Four % of children age 12-23 months Salary (including
have not received any vaccinations 91 . According to UNICEF development budget) shares
Pakistan’s 2016 Annual Report, polio cases fell by 63% year on in total: 59% – 31%
year, from 54 cases in 2015 to 20 cases in 2016. All efforts bore  Salary share: PKR 46 Billion –
fruit and in 2018, there were zero incidences of polio cases posting an increase of 22%
reported in Khyber Pakhtunkhwa according to the Polio Global over the last year
Eradication Initiative of the World Health Organization (WHO)  Non-Salary share: PKR 32.6
report as of July 2018. 92 As per the PDHS 2017-18, 93.6%, Billion – posting an increase of
86.7% and 82.3% of children aged 12-23 months received polio 10% over the last year
1, 2, 3 respectively whereas 43.5% of children in the same age  Allocations for Medicines and
bracket received inactive polio vaccination (IPV).93 Drugs: PKR 1,602 Million –
posting an increase of 68%
Department of Health initiated work on issues of access and over the last year
quality under the Health Sector Strategy 2010-17 by devising a  Development budget: PKR
Minimum Health Service Deliver Package (MHSDP) for each 12.6 Billion – posting a decline
level to serve as a standards and guide for the availability of of 26% over the last year
health services at a specific health care level. Unfortunately, the  Budget Execution Rate: 93%
MHSDP could not be implemented due to unavailability of during FY
adequate 2017-18and
resources – lowlackasof
government ownership. However, the department concerted compared
efforts to BER
to revise the inprimary
FY 2016- and
17 (105%)

89
Multiple Indicator Cluster Survey (MICS) 2017, Khyber Pakhtunkhwa
90
Pakistan Demographic Health Survey 2017-2018
91
PDHS 201718
92
WHO Polio Eradication Initiative, Country Profile 2018
93
PDHS 2017-18

51 | P a g e
secondary health care standards as per the new categorization and the MHSDP awaits formal cabinet
approval.

Despite increased efforts to improve quality, comprehensive quality healthcare coverage to vast
majority of population remains a goal to be achieved. Delivery system of health services within Khyber
Pakhtunkhwa holds many deficiencies and are plagued by problems like limited geographical access
to facilities, poor physical infrastructure, non-availability of adequately trained staff, paucity of medical
equipment and supplies and inadequate referral services.

Despite a major increase in health budget and reforms across the board in health care system, the
referral system in Khyber Pakhtunkhwa remains weak due to fragmentation between different levels
of care. This poor referral system leads to underutilization of primary healthcare and places enormous
burden on tertiary care facilities. In Khyber Pakhtunkhwa, a high proportion of patients seen in the
outpatient clinics at the secondary health facilities could be appropriately looked after at primary
health care centers at a lower overall cost to the patient and the health system.

Essential Health Workforce density is 1.15 94 per 1,000 populations across the province. These
numbers include public and private sector personnel and thus is far behind the WHO recommended
minimum of 4.45 95 per 1,000 population necessary to achieve universal health coverage. This
disparity is higher for paramedics (the gap is 141,792 for nurses and midwives as compared to gap
of 18,824 for doctors)96 which is the result of focus of the Government on production and deployment
of doctors. Besides, there is little evidence of managing HR in a structured manner based on overall
health sector and institutional requirements. Inadequacy of female staff for provision of services to
female patients in primary and secondary healthcare facilities is a barrier due to cultural inhibitions.
Moreover, there is a tendency among health workers to opt for urban centers, secondary and tertiary
care hospitals. HR distribution in public sector is mostly driven by existence of health institutions and
is therefore biased towards urban areas. There is also lack of clear policy framework for retention of
HR in remote areas.

In terms of legislative framework, health sector has covered almost all areas impacting service
delivery and status of well-being through various Acts. However, a regular and inbuilt monitoring
mechanism is missing to check the implementation status and periodic review of these acts.

Key challenges and opportunities for the health sector are highlighted in the table below:

Challenges
 Inadequate financial resources. Spending on health in
Khyber Pakhtunkhwa is less than the worldwide
standard practice of WHO. Per capita spending in
Pakistan on health is USD4597 (2015-16), which is
lower than the average per capita spending for South
Asia. Secondly, spending on health by the Government
of Khyber Pakhtunkhwa as a proportion of GDP is only
1.50 %.
 Allocation of funds is skewed towards secondary and
tertiary care. Likewise, the government sector
Opportunities
 Strong political commitment at the national
and provincial levels. Even the prime minister
has specifically mentioned issues like
stunting and malnutrition at the highest forum
 Rapidly growing private sector resulting in
significant changes in the roles and
responsibilities, access and ownership.
Technical expertise in specific programme
related areas, the flexibility to introduce
innovation and outreach, community

94
Khyber Pakhtunkhwa Health Situation Analysis, 2018
95
WHO, World Health Statistics: Monitoring health for the Sustainable Development Goals, 2017
96
Khyber Pakhtunkhwa Health Situation Analysis, 2018
97
National Health Accounts 2015-16s.

52 | P a g e
 Challenges Opportunities
allocations are not aligned with the health sector’s distribution channels and mobile health units.
priorities.  Many non-governmental organizations
 Inadequacy and insufficiency of human resources with preferentially targeting special groups such
weak institutional arrangements to forecast, plan, as thalassemia patients, people living with
develop and deploy HR based on needs of the public HIV/AIDS, victims of drug abuse, rape victims
health system. and refugees.
 Inadequacy of female staff for provision of services to  Bilateral and Multilateral Donor commitment.
female patients in primary and secondary healthcare Donor funding has been minimal (<2% of
facilities total health expenditure)99 but after the
 Gap for physicians & specialists is estimated at 18,824, development of Strategic Development
whereas, the gap for nurses and midwives is estimated Partnership Framework, an attempt on better
at 141,792. aligning donor funding with governments’
strategies has been encouraging
 High attrition rate due to less job satisfaction among the
Human Resources.  Use of Health Information Systems in
decision making and accountability
 Inequitable deployment of staff across districts. 12
districts that have less than 75% of the required  Relatively robust District Health Information
doctors; discrepancies between the data reported by system (DHIS). Inclusion of data from tertiary
IMU shows lesser number of postings and those shown health care facilities may further strengthen
by DHIS show higher number of postings. HR decision making for wider population.
distribution in public sector is mostly driven by
existence of health institutions and is therefore biased
towards urban areas98
 Sub-optimal level of professional education in health
without synchronizing the curriculum with modern
pedagogical techniques, international standards and
the local requirements.
 Licensing and renewal of health practitioners is weak,
and is not linked with improved qualification,
competence, performance and continuous professional
development.
 Weak institutional measures to assess the performance
of health staff linked to their job description
 Inadequate governance mechanisms, security issues,
violence &disasters with highest incidences of death,
primarily owing to the fallout of war on terrorism and
insurgencies. Militants have attacked facilities, killings,
and kidnappings of health personnel.
 Merger of new districts with Khyber Pakhtunkhwa
 Private sector engagement not regularized
 Challenges of transition, integration, implementation,
organizational capacity building and adjustment remain
at different levels. Reforms like establishment of Boards
of Governors in MTIs, Health Care Commission (HCC),
Health Foundation etc. are still at early stages of
development
 The referral system remains weak due to fragmentation
between different levels of care. This leads to
underutilization of primary healthcare and places
burden on tertiary care facilities

98
Khyber Pakhtunkhwa DHIS (Accessed on 5th September) reveals that there were 12 districts which has more than one quarter vacant
posts as of total sanctioned posts.
99
Khyber Pakhtunkhwa Health Situation Analysis, 2018

53 | P a g e
4.2 STRATEGY
4.2.1 OBJECTIVES

Sector Objective

1: Enhanced access and utilization of essential health services based on

equity

2: Measurable reduction in the burden of disease especially among

vulnerable segments of the population

Health
3: Improved human resource management

4: Improved governance, regulation, and accountability

5: Enhanced health financing for efficient service delivery & financial risk
protection for people of Khyber Pakhtunkhwa

6: Ensuring universal access to family planning and reproductive health-care

Population Welfare services, based on, information, education, communication and integration of
reproductive health into national strategies and programmes

4.2.2 MILESTONES

Yearly Targets Means of

Milestone Baseline
2019-20 2020-21 2021-22 2022-23 verification
Health Department
Child mortality declined
60100 <45 Population based
(a) IMR - - -
74101 <60 Surveys
(b) Under 5 Mortality Rate
MMR reduced Population based
178102 - - - <140
Surveys
Reduced prevalence of
malnutrition (underweight)
Population based
among children of less - - - 19%
Surveys
than 5 years of age 21%103
Under Weight Stunting
Improved proportion of
Population based
births attended by a skilled 72%104 75% 80% 85% 90%
Surveys
birth attendant
Improved proportion of Population based
55%105 60% 65% 70% >80%
fully immunized children Surveys

100
MICS 2016-7
101
Ibid
102
https://data.unicef.org/wp-content/uploads/.../Pakistan/country%20profile_PAK.pdf
103
MICS 2016-17
104
KPHS 2017
105
PDHS 2017-18

54 | P a g e
 Yearly Targets Means of
Milestone Baseline
2019-20 2020-21 2021-22 2022-23 verification
before reaching their first
birthday
MHSDP implemented in
primary and secondary 25% 50% 75% 90% IMU/TPA reports
healthcare facilities
Infrastructure developed
in Health Facilities as per Work completion
20% 40% 75% 100%
MHSDP and Quality reports
Improvement plans
Service Quality Plan
implemented in all health 10% 25% 40% 50% IMU data
facilities
Population Welfare Department
Increase in Contraceptive
30.9 32.3 33.5 34.8 36.1 PDHS/MICS/BoS
Prevalence rate
Increase in Modern 23.2 24.3 25.4 26.5 27.5 PDHS/MICS/BoS
contraceptive Prevalence
Rate
Proportion of eligible
couples who have their 45.13 47.50 48.90 50 51.22 PDHS/MICS/BoS
need for FP satisfied with
modern methods (%).
Reduce Unmet need for
20.5 19.2 17.9 16.5 15.3 PDHS/MICS/BoS
contraceptives
Decrease in Total fertility
4.0 3.82 3.75 3.69 3.62 PDHS/MICS/BoS
rate

4.3 SECTOR PLANS

4.3.1 HEALTH DEPARTMENT

In commitment to the Sustainable Development Agenda 2030 adopted by the World Summit on
Sustainable Development in September 2015, Pakistan has aligned all national and sub national
strategies and policies along with the goals and targets of the Sustainable Development Agenda. A
localization of SDGs exercise was conducted in the national and provincial context in accordance
with the given timeframe. A total of 27 major indicators have been broken down at the provincial level
covering all SDG targets.

According to the Khyber Pakhtunkhwa Health Policy 2018, the department of Health is mandated to
make sure the delivery of quality health services to the people of the province at a reasonable and
manageable cost. This is important to highlight that Health Policy 2018 has benefited and has been
built on the 100 Day Plan. The following legislative, policy and institutional reforms, innovations and
NMA related initiatives are envisaged under the Health Policy and Strategic Plan.

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

55 | P a g e
4.3.1.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Legislative, Restructuring of Health Department and its constituent units with clear roles and
Policy and responsibilities
Institutional
Reforms Development and implementation of Universal Health Coverage Strategy
Implementation of the Minimum Health Services Delivery Package at primary and
secondary level healthcare
Implementation of approved primary and secondary health care quality standards to
ensure quality of services
Comprehensive Nutrition Programme to address stunting and malnutrition
Strengthening of Khyber Pakhtunkhwa Health Care Commission
Attachment of health facilities with MTI/Tertiary care hospitals in every district
Institutionalize family practice approach to achieve continuum of care and Universal
Health Coverage
Strengthening the role of DHIS in ensuring evidence-based decision making
Increase in government spending to 3 % of provincial GDP (Vision 2025)
Social Health Protection for entire population of the province

Health care commission and Health foundation shall be further strengthened to

provide the department solid legislative foundation and capitalize on private sector
expertise
Implementation of provisions of Public Health Act 2017, Blood transfusion Regulation
2017, Mental Health Act 2017 and Medical Transplantation Regulatory Authority Rules
2017
Institutionalizing model of Provider-Purchaser Split
Innovation in HR strategy and IT solution encompassing need assessment, recruitment, training,
governance and development, career progression, career planning, refresher trainings, performance
service delivery management and feedback, transfers, postings and retirement planning; with links to
and Linkages budgeting/finance module and DHIS (Linked with Khyber Pakhtunkhwa IT Board)
with other
sectors Inter-sectoral coordination for achieving WHO concept of “Health in all policies”
Revival of school visits program for periodic health check-up of children in primary
schools. Monitoring to be done by the E&SE department (Link with E&SE department)
Establish a uniform procurement management system with dedicated Procurement
specialists (Linked with Khyber Pakhtunkhwa IT Board)
Strengthening and expansion of Telemedicine (Link with IT board)
Expansion of Sehat-Insaf card scheme
Expansion of D-Talk program for both Type 1 and Type to diabetic patients to all
districts
School children health monitoring program with periodic and regular medical staff
visits (Linked with Health sector)
Public Private Strengthening of Health Foundation and engaging private sector as a partner in
Partnership healthcare delivery to improve access and coverage

56 | P a g e
 Reform Area Reform Initiative
Involvement of religious scholars as social mobilizers

4.3.1.2 C OSTED P ROJECTS

As a second pillar of the sector plan, the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23

Upgradation of 500 BHUs and RHCs for 3,304 1,000 923 -

provision of enhanced level of health services
Rural ambulance services for MNCH 650 689 730 774
Establishment of Minister Health Complaint Cell 64 20 21.20 22.47
Health survey after every two years 60 60
Strengthening of Financial Management Cell, 225 205 - -
Procurement Cell, DHIS, IMU, HSRU
Social Health Protection Initiative 1,643 2,054 2,156 719
Up-scaling of Telemedicine initiative 50 75 55 -
Strengthening of the Rehabilitation Services for 41 - - -
Physically Disabled at Health Department
Khyber Pakhtunkhwa.
Establishment of Divisional Food and Drug 100 75 95 -
Testing Laboratories
Reconstruction, Upgradation, Establishment, 3,202 3,632 4,654 2,430
Improvement & Strengthening of Secondary
Health Care facilities
Establishment of Medical & Training Institutions 1,394 1,565 2,812 6,724
Integration of Health Services Delivery with 3900 4000 4200 4500
special focus on MNCH, LHW, EPI and Nutrition
Programme (DFID & AusAid Assisted).
Integrated Vector Control Programme. 70 84 0 0
Strengthening of TB Control Programme in 0 0 0 0
Khyber Pakhtunkhwa (Phase-II).
Treatment of Poor Cancer Patients (Phase-II). 1300 1452 0 0
Expanded Programme on Immunization Khyber 150 150 108 0
Pakhtunkhwa (EPI) (World Bank Assistance
Integrated HIV, Hepatitis and Thalassemia 75 75 106 0
Control Program
Establishment of Safe Blood Transfusion Project 100 100 170 0
(Phase-II) (KfW Assisted)
Integrated Disease Surveillance Response 100 105 0 0
System (IDRS)
Extension of D-Talk and Insulin for Life 250 300 574 0

57 | P a g e
 Intervention Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23

Upgradation, Establishment, Improvement & 597 735 383 554

Rehabilitation of Tertiary Health Care Facilities.

4.3.2 POPULATION W ELFARE DEPARTMENT

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

4.3.2.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Inclusion of Life skill basic education and Population studies in schools and
Legislative, Policy colleges
and Institutional
Reforms Promulgation of Khyber Pakhtunkhwa Reproductive health care and Right Bill
2019, The Early Marriage Restraint Act 2019 and Pre-marital Counselling Bill
Innovation in
governance and
Linkage of Family Planning Programme with Social Safety Network Programme
service delivery and
(like BISP)
Linkages with other
sectors

4.3.2.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Intervention (Population Welfare) Yearly Cost Estimates

2019-20 2020-21 2021-22 2022-23
Construction of Building for Regional Training 90 0 0 0
Institute, Malakand at Batkhela
Construction of Building for Regional Training 90 0 0 0
Institute, Abbottabad.
Solarization of Provincial Population Welfare 15 0 0 0
Office, Peshawar & Regional Training Institute,
Peshawar
Involvement of 3500 Religious Scholars as a 14 14 15 15
Social Mobilizer at Village Council Level in
Khyber Pakhtunkhwa.
Establishment of 300 Family Welfare Centers in 270 270 270 270
Khyber Pakhtunkhwa.
Establishment of 6 Mobile Service Units in 27 27 0 0
Khyber Pakhtunkhwa.

58 | P a g e
 Intervention (Population Welfare) Yearly Cost Estimates
2019-20 2020-21 2021-22 2022-23
Construction of office building for District 126 0 0 0
Population Welfare Offices at Divisional Level
land acquisition
Establishment of Reproductive Health Service 54 0 0 0
Centre A-type, DHQ Hospitals, Dir (Upper),
Battagram and Torghar.
Piloting android technology for good governance 19 20 0 0
and monitoring of the service delivery outlet.
Provision of Training on family planning at 31 31 33 0
Provincial Judiciary Academies and relevant
training institute to Lemmas/Khateebs
Ensuring Commodities Security through 331 331 332 332
provision of contraceptive to all Public & Private
stakeholders
Provision/Procurement of vehicles for Director 133 0 0 0
General, Additional Director General and District
Population Welfare Officers in Khyber
Pakhtunkhwa
Establishment of 10 adolescent & sexual 30 30 0 0
Reproductive Health Centre.

59 | P a g e
 5. THEMATIC AREA 3: ECONOMIC GROWTH AND
EMPLOYMENT OPPORTUNITIES

Sustainable rise in the standard of living warrants a sustained rise in per capita income. This is
possible with a sustained, healthy growth rate of the gross domestic product (GDP). Khyber
Pakhtunkhwa’s quest for sustainable development will, thus, critically rest upon the growth in its GDP.

Khyber Pakhtunkhwa’s economy experienced the highest growth rate among the provincial
economies in the last five year. However, these growth rates are lately declining, coming in at 4 %
in the last fiscal. There are several constraints upon the provincial resources and the economy of the
province, which would need to be addressed if the province is to overcome roadblocks to sustained
growth in per capita income, and also for creating enough employment opportunities to absorb
growing labor force.

5.1 OVERVIEW
Industries, Trade and Commerce: These sectors have a huge potential for the province but the
busts have been more than the booms for these sectors to thrive. There are a total of 2,584 industrial
units in Khyber Pakhtunkhwa, of which 2,222 (86 %) are operating. The largest item of production in
the last year was Cigarettes, with a total production of 23,372 thousand M. Tons, followed by Cement
at 10,574 thousand M. Tons. There are 11 industrial estates operating in Khyber Pakhtunkhwa, while
a further 17 are planned. The development of Special Economic Zones (SEZ) is another initiative
besides the industrial estate venture. Rashakai is the first of such zones, while more are planned at
Hattar, Jalozai and D. I Khan. In order to streamline industrial development, Khyber Pakhtunkhwa’s
first industrial policy came out in 2016 which outlined the efforts to speed up industrialization in the
province. Demand for industrial plots seems to be quiet good, with the Rashakai SEZ receiving about
570 applications for setting up shop.

As a historical hub of trade lying on the most strategic and central location on the Silk Route between
south and central Asia, Khyber Pakhtunkhwa promises to serve as a hub for trading activities and to

Source: Word Bank report Pakistan @ 100.

60 | P a g e
be the centerpiece for into Afghanistan and onwards. Besides the need for a roads network, trucking
industries’ improvement and regulations concerning business and industrial hubs need to be revisited
in view of the stipulation of the Khyber Pakhtunkhwa’s Investment Policy. The implementation of
pillars of Investment Policy for trade enhancements needs to be implemented in letter and spirit. The
nearest market available to Khyber Pakhtunkhwa is Afghanistan; a market which was historically
dependent on imports of goods and services from Pakistan, however, is penetrated by India in recent
years. The law-and-order situation on the border between Pakistan and Afghanistan led to several
entry barriers which allowed penetration by other neighboring countries.

The recent reconstruction of the Peshawar Torkham road, the operationalization of Ghulam Khan,
and Angoor Adda border crossing point have eased and facilitated trade and the travel of nationals
of both the countries. Still the constraints on trade through the Khyber Pass have hindered Pakistan’s
development and undermined the prosperity of northwestern Pakistan. Costs of transporting goods
through Khyber Pass are higher due to deficits in hard and soft infrastructure. The table below shows
the import export dwell time and throughput on Torkham border.

Issue Import Export Transit

Throughput 50 on average each day 600 on average each Import: 2 on average

400 each day high season| (May day each day rising to 40
to July) 1,000 high season Export: 90 on average
12,500 pedestrians each day (Mar to July) each day rising to 200
4 hours on average each day 12,500 pedestrians 4 hours on average
12 hours maximum each day each day
3 hours on average 8 hours maximum
each day
12 hours maximum
Source: ADB TA-8405 PAK Border Service Project site survey result 10th February 2014

Labor: Pakistan’s Labor Force Survey 2017-18 provides detailed insights into characteristics of labor
in the province. The 2017-18 survey puts the total size of labor force in Khyber Pakhtunkhwa at 7.72
million, compared to 6.60 million in 2014-15106. The %age distribution of labor force by age is provided
in the accompanying table107.Of the total population of Khyber Pakhtunkhwa (10 years and above),
35.42 % are part of the civilian labor force. Within this 35.42 %, approximately 14 % are illiterate while
hardly 3.6 % have a degree above intermediate108. Bifurcating this number by gender, female share
of the total employed labor force is hardly 6 %, and not even a % of them have a degree higher than
intermediate. The Pakistan Labor Force Survey 2017-18 also came out with the interesting conclusion
that except for Khyber Pakhtunkhwa, rural to urban migration

106
PLS 2017-18, table 11, p.25.
107
PLS 2017-18, Table 6.1, in ‘Tables’.
108
‘%age distribution of population 10 years of age and over by level of education, sex and nature of activities 2017-18’, Table 9.1, PSLM
2017-18.

61 | P a g e
 of labor declined in all provinces109. From time to Age cohort Total Labor Force Employed Unemployed

time, the Province’s Labor Department conducts 10-14 2.46 2.38 0.08

surveys related to various aspects of labor. 15-19 11.38 10.46 0.92

Recently, for example, it conducted survey on 20-24 15.17 13.98 1.82
bonded labor in 2 districts of Khyber Pakhtunkhwa. 25-29 14.18 12.95 1.23

30-34 11.62 10.94 0.68

Communication and Works: C&W comprises a
35-39 10.4 9.91 0.49
variety of provincial work in the form of road and
40-44 8.56 8.16 0.4
other infrastructure building (mainly buildings for
different departments). Besides these main 45-49 8.15 7.82 0.33

functions, it also undertakes testing for quality 50-54 6.3 5.92 0.38
purposes, laying down standards, toll collection 55-59 4.87 4.49 0.38
activities and rent assessment. The total length of 60-64 3.38 3.06 0.33
the road network in Khyber Pakhtunkhwa is 43,200 65+ 2.94 2.82 0.12
km, approximately 16 % of Pakistan’s total road
length. Of this, C&W Department is the custodian of the total road network measuring 18, 500 km. Its
workings are governed by various rules and regulations, like its own Rules of Business (2007), Market
Rate System (MRS, 2017) and Khyber Pakhtunkhwa procurement of Goods and Services Rules
(2014).

Mines and Minerals: The province of Khyber Pakhtunkhwa is endowed with a vast array of naturally
occurring resources including (but not limited to) oil, gas, gemstones and marble, etc. At this moment,
though, only 30 % of Khyber Pakhtunkhwa’s minerals have been mapped geologically. Last year
(2017-18), a total of 26,646 thousand tons of minerals were produced, with limestone topping
production quantity at almost 71 % of the total produce110.

Key challenges and opportunities in these sectors are given below:

Challenges Opportunities
 The Afghan transit agreement has not been reviewed or  C&W’s work is of significance in terms
updated since the last 8 years, despite Afghanistan of enhancing socio-economic mobility
constituting a major market for goods produced in Khyber within Khyber Pakhtunkhwa. It also
Pakhtunkhwa. provides an opportunity of linking
 Due to lack of affordable and timely freight carrier facility, lesser connected areas to mainland
much of the trade under transit agreement has been diverted and nearby markets. As more mineral
to Iran. This has rendered a substantial part of Peshawar deposits are found, more road linkage
and Azakhel Dry Ports unutilized will surely create more opportunities for
socio-economic mobility.
 Businessmen have to deal with 12 different type of federal
and provincial taxes, and the promise of one window  More road density in hilly areas and
operation to reduce business costs has never materialized. tourist locations will facilitate tourist
access to these areas and boost
 There are 14 industrial estates, and a further 17 are planned, tourism.
but their efficacy, occupancy and efficiency are less than
optimal. For example, there are 550 plots in Hayatabad  Khyber Pakhtunkhwa remains among
industrial estate of which 250 are functional at the moment. the top tourist destinations in the
country and the numbers are set to
 Persistent electricity shortages plague industry and increase. The provincial government
business. has recently come up with a
 Lack of incentives and their application towards business comprehensive Tourism Policy. 20 new

109
PSLM 2017-18, p.18.
110
‘Khyber Pakhtunkhwa in figures 2018’, p.11.

62 | P a g e
 Challenges Opportunities
and industrial growth. Domestic gas, for example, is being destinations have been identified for
supplied to Khyber Pakhtunkhwa’s industry at RLNG prices, further development112.
thus taking away a source of comparative advantage and  The merged areas also contain
cheaper production costs. attractive tourist destinations of their
 Lack of, and in some cases non-existent of, R&D investment own. These offer new opportunities for
at both the public and private level which contributes to low increasing the income of the people in
quality of products. these areas.
 Cost disadvantage compared to other industrial hubs  Newer start-ups like ‘FindMyAdventure’
(specifically Karachi). For example, it is estimated that it is have helped business activity and
23 % more costly to operate an industrial unit in Khyber brought in additional tourists to the
Pakhtunkhwa’s major cities compared to Karachi province. The provincial government
 Little or no income generation from roads, C&W owns must also tap the opportunities offered
15,700 KM of roads, while 2,900 km of road is owned and by such start-ups
supervised by the Pakhtunkhwa Highway Authority. Not a  Geological mapping of the remaining
single road under C&Ws supervision is tolled, while only a 70 % area of the identified area of
selected number of roads (5 in total) under Pakhtunkhwa interest for minerals will bring additional
Highway Authority are taxed. benefits especially in terms of job
 Khyber Pakhtunkhwa’s road density is 0.26, compared to creation and increase in provincial
0.33 for Pakistan. Road density in Khyber Pakhtunkhwa’s revenue and investment.
various districts differ significantly. The socio-economic  The sizeable market for minerals like
indicators (per capita income, schooling, health, etc.) of gemstones and gold can be utilized for
districts at the lower end of road density are also well below export to the nearby international
the national and Khyber Pakhtunkhwa average. markets like the UAE that valued at $8
 Mineral extratction in the province is characterized by low billion.
application of modern technology leading to wastage in the  With CPEC, export of minerals like
process of production. For example, in marble extraction, copper ore and coal (both available in
wastage ranges from 75-85 %. Khyber Pakhtunkhwa) to China is
 Negative externality of facilitating connectivity to mineral possible with the right investment and
extraction areas as roads provide an easy access to timber regulatory framework. (Chinese market
mafia to step up illegal logging. assessed at $53 billion and $12 billion
per annum respectively for copper and
 The royalty charged per ton of minerals extracted does not coal)
earn the provincial government adequate revenue because
of low official rates and leakages in the system.  The official printing press has the
capacity and the means to compete for
 The mining sector lacks a strategy and setup for value private publishing demands. This will
addition. enhance revenue. The press can be
 Underutilization of resources of provincial government press reorganized to become independent
and its limitation to printing only government department with a Board of Governors and
related material, without any provision for taking up private appropriate amount of seed money
printing demands.  Khyber Pakhtunkhwa has a large labor
 Participation rates for labor are lower than Pakistan as a force at its disposal, and with the
whole, and very low compared to the industrialized nations. present youth bulge, the size of this
Especially worrying is the extremely low participation rate of labor force is expected to grow in the
females. future.
 A proxy of the informal economy is the %age of labor force  The province also has an extensive
engaged in the informal sector. Around 53 % of total network of institutes (public and
employed labor force in Khyber Pakhtunkhwa works in the private) that impart technical education
informal sector111. The implication is that and a large portion to individuals. A coordinated effort
of Khyber Pakhtunkhwa’s economy is outside the tax ambit. between labor and technical education
 A very small %age of Khyber Pakhtunkhwa’s labor force has departments for internationally
education level beyond intermediate. This has implications recognized skill certifications can
not only for the domestic economy but for sizeable portion of increase export of skilled labor and

111
Estimated from statistics presented in LFS 2017-18, p.7. The comparative figure for Pakistan is 44 %.
112
‘Khyber Pakhtunkhwa selects 20 tourist destinations for immediate development’

63 | P a g e
 Challenges
labor working abroad. Their remittances sustain 25-30 %
household income of Khyber Pakhtunkhwa but due to their
low qualification, they are at greater risk of losing jobs when
economy slows down.
 Little or no legal protection for labor in informal sector who
cannot avail opportunities for government sponsored
training.
 In the technical education and training sector, there is
endemic underutilization of existing facilities, formalized
backward linkages with the secondary education and
forward linkages with employment market remain weak, the
training contents are mostly old and the private sector
remains untapped for partnerships.
Opportunities
thereby remittances.
 In the technical education and training
sector, the looming CPEC projects will
enhance the need for skilled workers in
the province
 Timely forward linkages with the new
industries will establish a long-term
supply chain of skilled workforce from
the training sector to them. As pointed
out by the World Bank, there is a larger
share of private vocational training
institutes than technical ones which
can be corrected to increase the supply
of skilled labor without substantial
capital input.113

5.2 STRATEGY
5.2.1 OBJECTIVES

A brief statement of the objectives for the next 5 years is presented in the following tables.

Sector Objective
Industry, Commerce and 1. Socio-economic development by creating employment opportunities in
Technical Education association with the private sector
2. Develop human resources to meet the local, national & international
labor market requirements
3. Utilize natural resources, encourage setting up labor intensive
industries based on local raw material, skilled labor to achieve
comparable cost advantage
4. Promote Investment by promoting Rashakai type initiatives as flagship
project, centered on technology transfer and export promotion for job
creation.
5. Establish Industrial Estates, Economic Zones and Special Economic
Zones (SEZs) to attract local and foreign investment. Promote Rashakai
SEZ as prioritized SEZ.
6. Improve infrastructure facilities in the existing industrial estates and
provide required facilities in the new ventures including establishment of
Small Industrial Estates. Promote trade through trade portal, online
supplier data link, and developing infrastructure along trading routes
and establishment of Common Facilities Centers (CFCs)
7. Providing Relevant Skills for Industrial & Economic Development, small
scale and cottages industries (SDG 4.4)
8. Improving Access, Equity and Employability of technical education
(SDG 4.3) and provision of marketing and advisory services
9. Assuring quality of technical education: teachers’ training programs with
specific short courses in collaboration with industrial-academia
partnerships

113
World Bank 2019. Pakistan @ 100, Shaping the future 2047

64 | P a g e
 Labor 10. Promotion of decent work and approval of discrimination free labor laws
for equal wages to minorities and women, plus promote women friendly
employment opportunities like separate working space. Establishment
of Child & Bonded Labor Unit to enforce the implementation of child and
labor laws
11. Ensuring guaranteed rights to workers by ensuring fair wages, to be
done through transition to payment through banking channels rather
than cash.
12. Enforcement of labor laws and expanding their scope and coverage to
formal and informal sectors, plus the merged districts. Enforce a system
of inspection of industrial units using modern occupational safety and
health gadgets.
Communication and 13. Construction, up-gradation and maintenance of a modern road network
Works (C&W) to enhance economic growth
14. Constructing & maintaining residential & office accommodation facilities
in public sector
Mines and Minerals 15. Efficient Utilization/Value addition of Mineral Resources

16. Research based presentation of mineral resources to investors

17. Digitization of mineral related data to ensure ease of doing business

18. Regulation and monitoring of mining and royalty collection

19. Enhancement of occupational safety & technical knowledge

20. Simplifying Mineral Title Awarding procedure

5.2.2 MILESTONES

A brief statement of the Milestones for the next 5 years is presented in the following table.

Milestone Baseline Yearly Targets Means of

Verification
2019-20 2020-21 2021-22 2022-23
Establishment of Small 12 13 13 22 31 PC-II
Industrial Estates SIE SIE Swat SIE Feasibility
(subject to the feasibility Abbottaba SIE Mardan-IV Report
and provision of funds) d-II Peshawar- SIE Dir PC-I
II Lower Section IV
Expansion SIE Dir Award of
of SIE Upper Contract
Bannu
SIE Advertiseme
Expansion Shahkas, nt of Plots
of SIE Jamrud
Karak Khyber
SIE District
Mansehra- SIE at
II Bajuar
SIE SIE Sub-
Bannu-II Division
SIE Swabi Tank

65 | P a g e
 Milestone Baseline Yearly Targets Means of
Verification
2019-20 2020-21 2021-22 2022-23
SIE SIE Sub-
Jehangira, division
Nowshera Bannu
SIE Dara District
Adamkhel /NW
SIE Sub-
Division
Lakki
Marwat
SIE Sub-
Division
D.I.Khan
Number of plots to be 1803 1836 1836 3456 4456 -do-
allotted for Small
Industrial Units

Provision of missing 01 05 01 No. of

facilities Bannu SIE Kohat SIE functional
Gas (Gas and Khalabat units
Infrastruct
ure)
SIE
D I Khan
(Gas and
Infrastruct
ure)
SIE
Peshawar
(Electric
Feeder)
SIE
Mardan
(Electric
Feeder)
SIE Karak
(Gas)
Skill Dev. For Women in 3883 6693 8673 10613 12463 No. of
Garments Industry female
trained

No. of female
entrepreneurs developed 120 440 660 880 No. of
women
entrepreneu
rs enrolled/
facilitated
Firms Registration 1400 1420 1500 1560 1600

Societies Registration 750 770 800 850 900

66 | P a g e
 Milestone Baseline Yearly Targets Means of
Verification
2019-20 2020-21 2021-22 2022-23
Stone Crusher Licensing 400 420 460 500 550

Boiler‘s Registration 330 340 350 370 390

Construction/Black topping, N/a 270 km 270 km 243 km 243 km

Rehab and dualization of
roads.
Construction of Government N/a 4000 sq.ft 4000 sq.ft 4000 sq.ft 4000 sq.ft
buildings
Increase in Revenue N/a 5% 5% 5% 5%
Collection increase increase increase increase
Geological Mapping of 70% 100%
Khyber Pakhtunkhwa
Training Programmes on 6 6 6 6
Modern Mining
techniques/safety
Establishment of Mining None at 50% 100%
Cadastral system present completio completio
n n
Establishment of weigh None at 15 15 5 5
stations across Khyber present
Pakhtunkhwa
Establishment of Shingle 20 km 20 km 20 km 20 km
roads approx. 80km across
Khyber Pakhtunkhwa
Start of Auction of
Auction of Placer Gold feasibility placer
studies blocks
Establishment of Gems & Feasibility Implemen
Gemological Centre study tation
Imparting Imparting Linking Consolida
skills to business with social tion of
adult skills to safety previous
To prevent children to enter
family adult nets and year steps
labor market by empowering
members family micro-
their families
of child members credit
laborers of child facilities.
laborers
Research Research Training Evaluation
in in OSH stakehold of steps
industrial and risk- ers on taken in
Ensuring risk free
peace free work modern previous
workplaces and reduced
environm concepts years
environmental hazards
ent and
contempo
rary
issues
Provision Arranging Manpowe
of easily r and

67 | P a g e
 Milestone Baseline Yearly Targets Means of
Verification
2019-20 2020-21 2021-22 2022-23
To establish an effective, infrastruct accessibl knowledg Widening
efficient and permanent ure e service e capacity coverage
monitoring infrastructure facilities in delivery building to attain
7 points this
divisions. milestone
Introduction of technical, 0 5 schools 10 20 20 EMIS
business and tourism schools schools schools
courses in selected high
schools on pilot basis
Number of Khyber NA 50 All All All d) M&E
Pakhtunkhwa-TEVTA Reports
Institutes using competency
based curricula
successfully.
Number of Khyber NA 20 40 All All
Pakhtunkhwa-TEVT
Institutions accredited by
NAVTEC or/and by other
local and international
institutes and organizations.
%age increase in # of men, NA 10 over 15 over 15 over 15 over
women & persons with last year last year last year last year
disabilities who have free
access to TEVT institutions
Number of internships/ NA 500 500 800 1000
apprenticeship offered to
trainees
Number of commercial NA 2 4 8 14
production and services
projects/programs
successfully piloted in
selected Khyber
Pakhtunkhwa-TVET
institutes.
Number of graduates (# of NA 500 men 800 men 2000 men 3000 men
men, # of women and # of 500 800 1500 2500
disable) placed found jobs in women women women women
regional, national and
international market
Khyber Pakhtunkhwa-TEVT NA Institute Institute
Rules, Regulations and level level
Financial Rules are in place regulation Financial
and being followed s manual framewor
developed k
developed
Number of Khyber NA 10 20 40 All
Pakhtunkhwa-TEVT
Institutions applying internal
quality assurance systems
in line with National Testing
Services

68 | P a g e
 Milestone Baseline Yearly Targets Means of
Verification
2019-20 2020-21 2021-22 2022-23
# of Faculty Members NA 100 200 300 All
Trained and their
performance improved
Human Resource NA HR Deployme Performa
Management system system nt, Data nce
development. study, entry and Evaluatio
analysis commissi n system
and oning developed
design

5.3 SECTOR PLANS

5.3.1 INDUSTRIES, T RADE, AND COMMERCE

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

5.3.1.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Legislative, Develop and launch an online portal for all business regulations in Khyber
Policy and Pakhtunkhwa
Institutional
Modernize by-laws to ensure that building rules are clear, coherent and enforceable
Reforms
Establish commercial bench at High Court and district courts, and define procedure to
limit adjournments

Public private Strengthen commercial Alternate Dispute Resolution mechanism

partnership
Innovation in Develop and launch province’ Business Registration Portal, and integrate into e-
governance and services of Securities and Exchange Commission of Pakistan
service delivery
Allow online payment of all business registration fee
Fully computerized property registries and information on relevant procedures to be
available online. Additionally, offer fast-track property registration process

5.3.1.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Khyber Pakhtunkhwa Economic Zones Development & Management Company

69 | P a g e
 Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23

Improvement, Rehabilitation and Modernization of 550 600 600
Existing Industrial Estates & Economic Zones
CPEC - Prioritized Projects (Rashakai & Hattar 985 933
SEZs), proposed projects including Daraband
(D.I.Khan)
Land Acquisition for New Economic and Special 3,081
Economic Zones
Development and Management of New Economic 30
and Special Economic Zones
Land Acquisition for New Economic and Special 3,825 918 918
Economic Zones in Merged Area
Development and Management of New Economic 1,187 4,845 6,401 6,860
and Special Economic Zones in Merged Area

Small Industries Development Board

Intervention Cost Estimates (PKR in Million)
2019-20 2020-21 2021-22 2022-23
Acquisition of Land and Establishment of SIE at 100 250 250 0
Swat
Acquisitionof Land for expansion of SIE Karak 600 400 400 0
and Bannu
Common Facility Center for Arms Industries 0 0 200 300
Establishment of 22 training centers in field of 0 88 95 95
marble, handicraft, readymade garments Ind.
Establishment of 10 Women Business Dev.
Centers
Establishment of CFC and Training Centre 0 0 300 300
Establishment of Display Gallary at Natiagali, 0 100 100 0
Abbottabad
Establishment of SIE at Bannu-II 0 405 260 260
Establishment of SIE at Darra Adamkhel 300 300 200 0
Establishment of SIE at Dir Upper 0 405 260 260
Establishment of SIE at Jehangira, Nowshera 0 800 400 400
Establishment of SIE at Lower Dir 0 405 260 260
Establishment of SIE at Mansehra-II 0 400 260 260
Establishment of SIE at Mardan-IV 0 405 260 260
Establishment of SIE at Sub-Division D.I.Khan 0 0 0 300
Establishment of SIE at sub-division Tank 0 300 140 250
Establishment of SIE at Swabi 0 405 260 260
Establishment of SIE Peshawar-II 600 20 600 0
Establishment of Women Business Incubators 0 0 100 100
Establishment of Wood Working Center at 0 300 300 300
District Bajuar, Orakzai and Kurram

70 | P a g e
 Intervention Cost Estimates (PKR in Million)
2019-20 2020-21 2021-22 2022-23
Feasibility study and establishment of SIE at 20 400 260 260
Bajuar
Feasibility study for identification of industrial 0 30 0 0
potentials in NMAs
Feasibility study and establishment of SIE at 0 400 260 260
Orakzai
Feasibility study and establishment of SIE 0 405 260 260
Khyber District Shahkas Jamrud
Interest Free Micro Finance Scheme 1105 0 0 0
Provision of electric feeder at SIE Khalabat 30 0 0 0
Provision of Gas and independent electric 23 100 0 0
feeders in existing SIDB SIEs in Khyber
Pakhtunkhwa
Provision of independent Electric Feeder at 73.858 0 0 0
Peshawar and Mardan
Provision of independent sui gas and 0 90 80 0
rehabilitation of infrastructure facilities
Rehabilitation of existing SIDB SIEs (D.I. Khan, 90 75 0 0
Bannu, Kohat, and Mansehra)
SME Facilitation Unit 80 72.348 74.329 70.22
Women Entrepreneurship programme in NMAs 150 150 200 150

5.3.2 COMMUNICATION AND W ORKS

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

5.3.2.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Legislative, Policy and Restructuring of the department as per the findings of the O&M study
Institutional Reforms Web based tendering and bidding in place
Move towards paperless system and e-billing
Establishment of GAIS/MIS cell for better asset management

5.3.2.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.
Intervention Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Construction/Black topping, Rehab and dualization 9,540 9,540 9,540 9,540
of roads.

71 | P a g e
 Intervention Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Construction of Government buildings 938 1,200 1,500 2,000

5.3.3 MINING AND MINERALS

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

5.3.3.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Legislative, Amendments in Mineral Sector Governance Act 2017 to make it compatible for the
Policy and NMA and international investors
Institutional Mines Safety and Regulatory Act 2018 (under process)
Reforms One Window Facilitation for Mineral Title Holders and Digitization of data
Improved Monitoring & Surveillance to reduce illegal mining

5.3.3.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Establishment of Mining Cadastral System 80.37 88.37 - -
Geological Mapping of Khyber Pakhtunkhwa 180.57 116.55 100.10 NA
Assessment Study & Establishment of Mines, 85.88 85 85 85
Monitoring & Surveillance Units in Mineral Bearing
Areas of Khyber Pakhtunkhwa
Provision of Interest Free Loan to Mining Lease 250 230 NA NA
Holders for Mechanization(latest technology) of
Activities for Marble and Granite
Establishment of Weigh Stations in Potential 26.63 73.76 NA NA
Districts of Khyber Pakhtunkhwa
Purchase of Land and Construction of Office 70 90 80 60
Building for Directorate General Mines & Minerals,
Inspectorate & Commissionorate
Establishment of Mine Rescue & Safety Centers in 200 350 350 100
Potential Khyber Pakhtunkhwa Districts
Construction of Access Roads to Mineral Bearing 200 200 200 200
Areas
Renovation of Office Building for Minerals 10 10 10 10
Development Department

72 | P a g e
5.3.4 LABOR

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

5.3.4.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Legislative, Enhance the capacity of labor courts to effectively resolve cases

Policy and
Institutional Develop and approve Occupational Safety and Health (OSH) legislation
Reforms Ensure presence of female monitoring officers in every district for timely resolution of
discrimination and harassment at workplaces
Constitute district Vigilance Committees to eliminate child and bonded labor

5.3.4.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.
Intervention Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
To prevent children to enter labor market by 250 250 300 200
empowering their families
Ensuring risk free workplaces and reduced 150 250 350 250
environmental hazards
To establish an effective, efficient and permanent 200 200 300 100
monitoring infrastructure

5.3.5 KHYBER PAKHTUNKHWA T ECHNICAL EDUCATION & VOCATIONAL T RAINING AUTHORITY

(KHYBER PAKHTUNKHWA-TEVTA)

The SDG 4.4 targets “substantial increase” in the number of youth and adults who have relevant
skills, including technical and vocational skills for employment, decent jobs and entrepreneurship.
The TEVET sector has accordingly envisioned a prosperous and economically stable province
through competitive skilled work force for meeting domestic and global market demand.

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

5.3.5.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

73 | P a g e
 Reform Area Intervention
Legislative Review and revamp TEVTA and the institutional arrangements for the skills sectors
Policy and
Continue shift towards competency based training regime in TVET institutes
Institutional
Reforms Building on the current teacher training model in TVET expanding the scale and scope of
trainings
Continued Professional development for teachers expanded to all districts with the help
of new remote training technologies, outsourcing and international accreditation
programs
SOPs developed for conversion of selected technical institutes into production centers
Institute new unit to develop special programmes to develop industry specific soft skills
for young graduates to improve job placements
Develop a job placement portal connecting skilled graduates to industry ensuring
placement
Institute regulations manual developed
Institute level financial framework developed
M&E plan prepared and followed
All Khyber Pakhtunkhwa TEVT institutes accredited by NAVTEC
Innovation in HR strategy and IT solution adopted for need assessment, recruitment, training,
governance development, career progression, career planning, refresher trainings, performance
and service management and feedback, transfers, postings and retirement planning; with links to
delivery and budgeting/finance module(Linked with Khyber Pakhtunkhwa IT Board)
Linkages with
other sectors Issuance of annual technical education report by TEVT specifying the progress against
goals. Annual performance report to also sent to relevant tehsil Nazim, local MPA and
local government elected representatives; and the education minister requesting timed
and automatic requests to the parliamentary committees on industry and education for
review of the annual education report of the province (Link with Local government
department)
Provision of a single TVET sector LMS with provision for admissions, course
management, fee payment, scholarships and results (Link with Khyber Pakhtunkhwa IT
Board)
Establish a uniform procurement management system with dedicated Procurement
specialists
Patent and copyrights training for the faculty of technical education
Introduce exchange programs for faculty & students to undertake teaching and
collaborative research amongst National & International leading technical and vocational
institutes
Create a database of skilled graduates in the province and use the data to develop
demand for Pakistani skilled workers in other countries
Public Private Expand industry specific short courses with content designed in collaboration with
Partnership industry leaders
Dedicated resource centers and career counselling service for students to liaise with
Industries for placements and on the job trainings, apprenticeships& Internships
Start new TVET courses funded by TEVTA and taught through industry partners
Develop a unit within TEVTA to explore and develop new industry-academia
partnerships in key sectors
Extending Technical Education to Deni Madaris and bringing Deni Madaris students in
Mainstream

74 | P a g e
5.3.5.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Activity/Initiative Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Feasibility Study for Establishment of Construction
Machinery Training Institute at Swabi
One Liner Provision for Improvement & Development of 1492 1500 1600 1800
Technical Education
Procurement of Equipment / Machinery, Furniture & 150 150
Library Books for GPIs in Khyber Pakhtunkhwa.
Provision of Infrastructure Facilities & Equipment for the 329 329
Upgraded GPIs at Timergara, Takhtbhai, Swabi,
Abbottabad, Kohat and Nowshera to the Level of College
of Technology

5.3.6 BOARD OF INVESTMENT & T RADE

Milestone and Yearly Targets

Milestones Baseline Yearly Targets Mean of

verification
2019-20 2020-21 2021-22 2022-23

Promotion of  1 IRS 2 IRS 1 IRS Investmen 1 IRS Concerned

Investment  7 MOUs Showcasi Investmen t worth 10 Investors Stake
Opportunities of ng of t worth 10 Billion will worth 10 holders /
Khyber  NAYA tel Billion will be Billion Department
potential
Pakhtunkhwa and  Oil Refinery projects be attracted. will be s
Facilitation of  Projects in attracted. attracted.
Investment in tourism
collaboration with
concerned stake
holders
Image building of  Doing
the Province / Re- Advocacy that
branding the Province is
a suitable
destination for
investment in
different
sector of
economy by
highlighting
the
comparative
advantage of
the Province.
Creation of an  PPP Act 2014 ▪ Formulation, revision and implementation of
enabling /  Industrial investment friendly policies / Laws encompassing
investment friendly Policy 2016 attractive incentives for both local and foreign
environment in the

75 | P a g e
 Milestones Baseline Yearly Targets Mean of
verification
2019-20 2020-21 2021-22 2022-23
Province in  Hydro Power investors in collaboration with Concerned Stake
collaboration with Policy 2016 holders.
concerned stake  Tourism Policy ▪ One Window facilitation.
holders 2015
 Investment
Policy (in final
stage)
 Steps initiated
for Ease of
doing
business.

Yearly Cost Estimates for Development Interventions

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23

Road Shows / Seminar and Promotional 70 40 40 40

Materials
Capacity Building / Structuring of Khyber 70 75 80 85
Pakhtunkhwa-BOIT and Operations
Pre-Feasibilities / Feasibilities Studies / Sectoral 20 30 20 -
Studies
Advertisements 5 5 6 6

Sectoral Analysis of NMA 30 - - -

5.3.7 SCIENCE AND T ECHNOLOGY & INFORMATION T ECHNOLOGY

Various initiatives have recently been undertaken for utilizing modern scientific techniques,
technologies and advanced information management and communication systems to improve
governance, service delivery and enhance socio-economic prospects of the Province. ST&IT builds
capacities and fulfil the needs of both the public sector entities and the private sector for providing
evidence for policy formation and innovation and transforming businesses in the modernized digital
world.

Overview

Pakistan has witnessed an annual growth of 27% in the number of internet users and 13% in the
number of social media users since January 2017. But internet penetration stands at 29.92%, lower
than the South Asian average of 36%. These indicators point to the need for enabling policies and
improvement strategies. The Khyber Pakhtunkhwa government is focused on improvement and
mindful of the challenges.

As per Sustainable Development Goal #8, the technological up gradation and innovation can enable
us to develop high value products. The SDG # 9 also indicate that enhancement of scientific research
enables innovation and supports local technological development.

76 | P a g e
 Challenges
 No enabling environment for e-commerce
 Among the older service providers, Resistance to
change for adopting customer-to-government and
government-to-government IT enabled
environment viz. a viz. capacities among public
sector employees. A general inertia towards IT
based platforms in the public sector
 Informal economy of the province that relies on
cash transactions
 Absence for enabling environment for financial
inclusion to embark upon opportunities in ST&IT
areas
 Low base of research and appetite for
commercialization of scientific driven initiatives
 Inadequate government financing for the ST&IT
sector
 The merger of former Tribal Areas into Khyber
Pakhtunkhwa brings in an area where the footprint
of digital and information service is limited
Opportunities
 Progress on the CPEC and increasing political
stability has created opportunities for progress
 Recent Digital policy of the province has identified
a clear path and given a comprehensive
framework for digital growth.
 Linkages among and between government
departments are emerging for better use of IT
solutions
 During the SDS process, almost the entire young
workforce of all departments expressed desire to
have modern IT based solutions for HR, inventory
management and procurement. This willingness
to change is an opportunity like on other
 Recent initiatives of Khyber Pakhtunkhwa IT
board for pilot projects on policing, inventory
management, procurement tracking and
entrepreneurship incubator and mentorship for
new talent have showed promising results. An
ideal base exists in Khyber Pakhtunkhwa IT board
which can be leveraged with further investment
and political support

Strategic Objectives

Sector Objectives
Science and 1: Promotion of Product-Oriented Research & Development
Technology and
Information Technology 2: Improved automation of public sector offices with focus on C2G and G2G
3: Improved capacity in science and technology and information technology
4: Commercialization of viable projects to inculcate new business dimensions
for fostering economic growth and creating opportunities for employment with
focus on entrepreneurship development
5: Provisioning of enabling environment for ease-of-doing business with IT
solutions and encouraging innovation through technology startups and SMEs

Milestones

Milestone Baseline Yearly Targets Means of

Verification
2019-20 2020-21 2021-22 2022-23
Policy framework for Drafts Policies Implement Continuou Continuou Cabinet
ST &IT policies approved ation and s review s review meeting
by cabinet enforceme and and minutes,
nt improveme improveme annual policy
nts nt review reports
E-government Nil Baseline 5% 5% 5% Khyber
development index establishe improveme improveme improveme Pakhtunkhwa
for Khyber d for nt over nt over nt over IT survey
Pakhtunkhwa Khyber baseline baseline baseline
Pakhtunkh
wa

77 | P a g e
 Milestone Baseline Yearly Targets Means of
Verification
2019-20 2020-21 2021-22 2022-23
ICT development Nil Baseline 5% 5% 5% Khyber
index establishe improveme improveme improveme Pakhtunkhwa
d for nt over nt over nt over IT survey
Khyber baseline baseline baseline
Pakhtunkh
wa
Digital skills Nil Baseline 5% 5% 5% Khyber
establishe improveme improveme improveme Pakhtunkhwa
d for nt over nt over nt over IT survey
Khyber baseline baseline baseline
Pakhtunkh
wa
Network readiness Nil Baseline 5% 5% 5% Khyber
index establishe improveme improveme improveme Pakhtunkhwa
d for nt over nt over nt over IT survey
Khyber baseline baseline baseline
Pakhtunkh
wa
Ease of doing 8 Prepare Strategy Strategy Peshawar Khyber
business (rank) for strategy to implement implement among top Pakhtunkhwa
Peshawar uplift ation ation 3 cities in IT survey
Peshawar Pakistan
ranking for ease of
doing
business
Commercialization of 4 4 4 4 Market
new products records
Number of research 15 18 20 20 22 Official
studies conducted publications

Number of yearly 15 18 20 20 22 Official

innovative projects publications
supported from youth
of school /college
/universities

The strategy for ST&IT department builds on the Khyber Pakhtunkhwa 100 Days Plan and PTI’s
Agenda which strive to induce an enabling environment for economic growth.

Reform Area Initiative

Legislative, Policy Formulation of Pakhtunkhwa’s Business Registration Portal and its integration into
and Institutional e-services of Securities and Exchange Commission of Pakistan
Reforms
Policy for ease-of-business through rationalization of taxation regime and financial
inclusion

Pilot projects of making government paperless in the Higher Education, Libraries

and Archives department

Introducing, incentivizing and enforcing digital payments

Policy formulation for Data Privacy and Data Protection

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 Prioritized adoption of Cloud based services and hosting by the government based
on the standard framework given by the Khyber Pakhtunkhwa IT Board

Implement standard cyber security protocols across government departments

Khyber Pakhtunkhwa science, technology and innovation policy promulgation

Innovation in Encouraging Innovation through technology start-ups and SMEs

governance and
service delivery and Establishment of innovation fund to support entrepreneurs / start-ups in the digital
Linkages with other space
sectors
Investing through PPP mode into Digital Access projects (FTTH)

Catalyze Applied Research

Public Private Support the Business Process Outsourcing (BPO) industry in Khyber Pakhtunkhwa
Partnership
Announcing sunset on copper-based networks in the Province

Establishment of SEZs/Digital Cities/Technology Cities

Promotion and Support to Scientific Innovation/ Product Development by Youth of

Schools/ Colleges/ Universities

Strengthening the start-up ecosystem in Khyber Pakhtunkhwa (Start-up Khyber

Pakhtunkhwa - OAIEC, prototyping (Fab Lab), patenting, seed fund, events)

Propagation of Synthetic Biology II (Made in Khyber Pakhtunkhwa - import

substitution through cutting-edge science and technology)

All the above initiatives will also be replicated in the NMA, where appropriate.

The strategic objectives and the milestones will be achieved through the following actions:

Initiatives Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Encouraging Innovation through technology start-ups 132 145 159 175
and SMEs
Establishment of innovation fund to support 122 134 147 162
entrepreneurs / start-ups in the digital space
Develop a digital competency and literacy framework to 60 66 72 80
assess and improve digital literacy levels
Khyber Pakhtunkhwa Youth Employment Program and 340 374 411 453
digital internship and ICT certification and early age
programming
International Acceleration Program (Component of 22 24 27 29
Private Incubators Collaboration Program)
Khyber Pakhtunkhwa Open Wi-Fi 50 55 60 66
Khyber Pakhtunkhwa Telemedicine 17 19 21 23
Khyber Pakhtunkhwa Cyber Emergency Response 21 23 25 27
Centre
Establishment of SEZs/Digital Cities/Technology Cities 132 145 160 176
Digital Governance and Data Centre 32 35 39 43

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 Initiatives Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Establishment of SEZs/Digital Cities/Technology Cities 37 41 45 49
Khyber Pakhtunkhwa science, technology and - - - -
innovation policy
Skill up Khyber Pakhtunkhwa - Khyber Pakhtunkhwa's 90 100 100 -
network of STEAM academies
Promotion and Support to Scientific Innovation/ Product 100 100 50 50
Development by Youth of Schools/ Colleges/
Universities
Khyber Pakhtunkhwa Institute of technology 500 300 200 200
development
Khyber Pakhtunkhwa Science and Technology Fund 500 1,000 1,000 1,000
Catalyze Applied Research 185 565 670 850
Strengthening the startup ecosystem in Khyber 400 1,000 - -
Pakhtunkhwa (Startup Khyber Pakhtunkhwa - OAIEC,
prototyping (FabLab), patenting, seed fund, events)
Propagation of Synthetic Biology II (Made in Khyber 250 100 - -
Pakhtunkhwa - import substitution through cutting-edge
science and technology)
Total 2,989 4,225 3,186 3,383

5.3.8 T OURISM

Overview

The tourism sector is considered to be a key source of inclusive poverty reduction in the developing
world114. Travel and tourism in Pakistan contribute directly to 2.9 % of GDP whereas the tourism
industry supports 1.5 million jobs across the country, which is far less than the sector’s full potential.
Share of Khyber Pakhtunkhwa in national tourism sector was calculated as 19% of national average
which meant that 8.8 million domestic tourists visited Khyber Pakhtunkhwa annually a few years ago.
115
Job creation through tourism often occurs in locations where other employment opportunities are
limited. As a labor intensive sector, it employs a large share of unskilled or semi-skilled workers,
including youth and women, thus maximizing impact for the poor and marginalized in the
population.116

A higher share of Khyber Pakhtunkhwa in domestic tourism, compared to its share in population, is a
clear indicator of the competitive edge the province possesses over other provinces/regions of the
country. The current institutional setup for tourism management and promotion in Khyber
Pakhtunkhwa includes the Tourism Corporation Khyber Pakhtunkhwa (TCKP) and the Department
of Tourists Services. The main responsibilities of TCKP are to promote local and foreign tourism, to
monitor and manage all tourism activities and to play the role of catalyst by providing a level playing
field for the private sector. In addition, Pak-Austrian Institute of Tourism and Hotel Management is

114
Reclaiming Prosperity in Khyber Pakhtunkhwa province; ICG, 2015
115
ibid
116
WB Investment Climate 2012)

80 | P a g e
responsible for producing skilled human resources in the hospitality sector. All these organizations
are collectively working under the Department of Sports, Tourism, Youth Affairs, and Archaeology &
Museum.

The number of domestic tourists has seen an impressive growth since the year 2015 and places such
as Galyat, Chitral, Swat and Kaghan have enjoyed popularity amongst various tourist segments. In
addition, new sites including Kumrat (District Dir) are also opening up gradually for those who prefer
to remain off the beaten track. A recent survey completed by the Government of Khyber Pakhtunkhwa
and funded by the World Bank administered Multi-Donor Trust Fund, highlights both opportunities
and challenges for the tourism sector. The survey in four tourist destinations (Kalam, Kumrat, Naran
and Galyat area) reveal that; (i) the sector provides direct jobs to 8,665 individuals; (ii) around 4.5
million tourists visit these four sites annually; and (iii) tourists are contributing more than US$650
million to the local economy annually. In addition to these four, several other destinations across the
province such as Kalash Valleys (Chitral), Thandiyani (Abbottabad), Malam Jabba (Swat) and Gor
Gathri (Peshawar) are also experiencing annual growth in the number of visitors117.

Following is a list of major challenges and opportunities faced by tourism sector in Khyber
Pakhtunkhwa province.

Challenges
 Several tourists’ spots (like Galyat) have witnessed an
increase in visitor traffic, however, lack adequate
infrastructure to support this increase. Lack of waste
disposal is perhaps a pertinent indicator of this. This
has also led to stress on the ecology and natural
resources of the region e.g. the extinction of rainbow
and brown trout in the river Swat and Kunhar and the
foul stench in the area118.
 Unlicensed tour operators and the unchecked building
spree in tourist areas that are not only environmentally
harmful but come up short on the quality assurance
criteria.
 Medical tourism from Afghanistan has declined
significantly mainly due to border management and visa
related issues.
 Security Issues related to disturbances in far flung
areas with high tourism value in the province
 Government directly dealing with tourism sector as
manager and provider, leading to “crowding out” of the
private sector
 Issues related to visas, travel advisories and security
clearance for the foreign tourists
 Absence of enabling policy framework for promoting
role of private sector in tourism promotion including
challenges related to public private partnership
framework implementation
 Institutional challenges within tourism sector
organizations as regulatory, development and
Opportunities
 Highest level political buy-in for tourism
promotion and sector development at the
provincial and federal level
 Existence of unexplored and high rich
cultural and archaeological heritage in the
province
 Availability of a vast pool of local and
domestic tourists which can be harnessed for
bringing about a boom in the tourism sector
in the province
 Internationally competitive pricing and
affordability of tourist services
 Presence of a decent communication
infrastructure for linking untapped resources
of touristic value
 Revival of peaceful environments and
stability for attracting domestic as well as
international tourists
 Improved international travel policies of the
federal government for facilitating
international tourists in Pakistan
 Availability of all seasons tourist attractions in
the province
 Untapped potential of faith-based tourism

117
Kiran Afzal, Senior Private Sector specialist; published in Global Village Space, 2018
118
‘Booming domestic tourism has caught Pakistan unprepared’.

81 | P a g e
 promotional roles are confused and hampered through
ambiguous jurisdictions
 Lower priority in development budget allocations and
recourse to sustained funding windows
 Lack of professional management and business-friendly
capabilities in tourism department HR
 Weak enforcement and standards setting/compline
regime for provision of tourist services including issues
in synchronization of provisions under The Pakistan
Hotels & Restaurants Act, 1976, The Pakistan Tourist
Guides Act, 1976 and The Travel Agencies Act, 1976
 Weaker institutional capacities for branding, marketing
and promotion of tourist services
 Missing inventory of tourism assets and heritage
resources

Strategic Objectives:

Sector Objective
Tourism 1: Put in place a holistic and technically sound destination management
strategy, covering existing and new destinations in the province
2: Prioritize infrastructure development for improving the quality and
accessibility of tourists destination and touristic experience

3: Promote investment, entrepreneurship and job creation through involving

private sector in tourism development activities in the province
4: Pilot and roll out innovative, IT-supported facilitation and branding
techniques for attracting international as well as domestic tourists to
destinations in the province
5: Contribute to revenue generation through increased touristic activates in
the province

Milestones

Following table presents milestones and yearly targets for the tourism sector in Khyber Pakhtunkhwa
which are based on “100 Days agenda” of the provincial government.

Yearly Targets
Baseline 2019-20 2020-21 2021-22 2022-23 Means of
Milestones
Verification
Develop and NA 5 destinations 5 5 5 Annual
implement destinations destinations destinations Progress
holistic Reports of
destination the
investment & Department
management
plans in 20
destinations
Develop NA All Divisional One third Additional Remaining -do-
recreational HQs District HQs one third one third
facilities in District HQs District HQs
major cities

82 | P a g e
 Yearly Targets
Baseline 2019-20 2020-21 2021-22 2022-23 Means of
Milestones
Verification
Ensure NA Management Plans Plans Plans -do-
complete Plans for implemented implemented implemented
management Destination
and safety of Management
tourist developed
destinations,
heritage sites
and museums
NA 1/3rd of 1/2 of All of -do-
Ensure all
Government Government Government
government
Rest Houses Rest Houses Rest Houses
rest houses
in province in province in province
are open for
open for open for open for
the public
Public Public Public
Construct NA Additional 50 Additional 50 Additional 50 Additional 50 -do-
metal roads Km added in Km added in Km added in Km added in
and roadside the year the year the year the year
facilities to
provide easy
access for
tourists
Develop at One One One -do-
least 3 trails additional trial additional additional
and Jeep & jeep track trial & jeep trial & jeep
friendly tacks added track added track added
Develop toolkit NA Tool kit Tool kit -do-
for public developed provided to
private and approved all offices
partnership for and
new destinations
destinations
Support NA No of Increase in Increase in Increase in -do-
tourism related participants No. of No. of No of women
MSMEs receiving additional women participants
through business participants participants receiving
business development receiving receiving business
development services business business development
services and development development services
trainings to services services
women
entrepreneurs
and workers
Increase NA Additional Additional Additional Additional -do-
employment number of number of number of number of
opportunities tourism sector tourism tourism tourism
through new jobs created sector jobs sector jobs sector jobs
destination in private created in created in – created in
development sector in the private private private
and province sector in the sector in the sector in the
formalizing province province province
jobs in tourism
sector

83 | P a g e
 Yearly Targets
Baseline 2019-20 2020-21 2021-22 2022-23 Means of
Milestones
Verification
Introduce NA Mobile app(s) -do-
mobile apps and web-
and web- based
based platforms
platforms for made
tourist functional
facilitation
NA Digital data Increase in Increase in Increase in -do-
collection and No of No of No of
monitoring destinations destinations destinations
Create and
system and tourist and tourist and tourist
integrate
developed services services services
digital data
covered by covered by covered by
collection and
digital data digital data digital data
monitoring
collection collection collection
system
and and and
monitoring monitoring monitoring
system system system
Establish NA GIS-based All Mileage -do-
geographic road asset covered by
information management GIS-based
system-based system road asset
road asset developed management
management system
system developed
Expand the NA Additional No Additional Additional Additional No -do-
network of of tourist No of tourist No of tourist of tourist
tourist facilitation facilitation facilitation facilitation
facilitation centers centers centers centers
centers to established established established established
include with facilities with facilities with facilities with facilities
medical
supplies,
tourist police
and rest areas
Launch NA Social Media Social Media No of user No of user -do-
extensive Campaign Campaign Feedback on Feedback on
social digital designed Launched social media social media
campaign to
promote a
softer image of
the province
Organize at NA No of Family No of Family No of Family -do-
least one Festivals Festivals Festivals
family festival launched launched launched
in all major
cities and
tourist spots of
the province
Conduct a NA Design and %age %age %age -do-
revenue Running of Increase in Increase in Increase in
mobilization Revenue Tourism Tourism Tourism

84 | P a g e
 Yearly Targets
Baseline 2019-20 2020-21 2021-22 2022-23 Means of
Milestones
Verification
study to mobilization Sector Sector Sector
enhance study to Revenue in Revenue in Revenue in
revenue from enhance the province the province the province
tourism and revenue from
travel sectors tourism and
travel sectors
Promote high NA No of tourist Revenue Revenue Revenue -do-
end tourism in visiting Chitral generated generated generated
Chitral to tourist through high through high through high
attract high facilities end tourism end tourism end tourism
spenders in Chitral in Chitral in Chitral

The following reform initiatives will be undertaken for achievement of the milestones

Reform Area Intervention

Provincial Government to act as facilitator and regulator for provision of tourist
services
Restructuring of Khyber Pakhtunkhwa Tourism Development Corporation as per
principles of Corporatization
Development and roll out of tourism-sector focused PPP framework in the province
Legislative, Policy
Mainstreaming environment-friendly, eco-tourism strategies in the province
and Institutional
Reforms Development of quality assurance and standard-setting regime and its implementation
for all tourist services in the province
Development of time-bound and costed “Branding and Marketing Strategy” covering
all aspects of tourism promotion in the province
Development of ICT material and outreach services for promoting potential and
revenues from touristic activities in the province
HR strategy and IT solution encompassing need assessment, recruitment, training,
development, career progression, career planning, refresher trainings, performance
Innovation in management and feedback, transfers, postings and retirement planning; with links to
governance and budgeting/finance module (Linked with Khyber Pakhtunkhwa IT Board)
service delivery
Launch of an IT-based tourism promotion policy and its rigorous implementation (Link
and Linkages with
with Khyber Pakhtunkhwa IT board)
other sectors
Establish a uniform procurement management system with dedicated Procurement
specialists (Linked with Khyber Pakhtunkhwa IT Board)
Formulate a new PPP strategy with costed options for expanding and improving
Public Private existing public-private partnerships in the tourism sector
Partnership
Implement the privatization of public sector rest houses in Galyat and Swat

Yearly cost estimates

Initiatives Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Construction of tourism roads and allied infrastructure 2,000 2,300 2,645 3,042
Develop jeep friendly tracks and pony trails
200 230 265 304

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 Initiatives Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Develop recreational facilities in major cities 500 575 661 760
Develop Tourist Facilitation Centers 100 115 132 152
Policy and legislative reforms/initiatives 100 115 132 152

5.3.9 YOUTH AFFAIRS

Overview

Khyber Pakhtunkhwa’s current population of 30.5 Million119 includes 40 % youth in age groups (10 to
29). Men and women aged 20-29 years constitute about 13 % of Khyber Pakhtunkhwa’s
population.120 Pakistan’s adoption of the 17 SDGs has further highlighted the need for government’s
commitment to make progress on youth-centric policies and interventions. Among 169 SDG targets,
as many as 65 can be seen as directly or indirectly referring to the youth whereas around 20 targets—
pertaining to Goal 2 (hunger), Goal 4 (education), Goal 5 (gender equality), Goal 8 (decent work),
Goal 10 (inequality), and Goal 13 (climate change) are specifically relevant for the youth. In Khyber
Pakhtunkhwa, School enrollment in ages (10-14) stands at 93.3% and 69.2% respectively for boys
and girls. The same ratio comes to around 88.1 % and 56.2 % for boys and girls respectively in ages
(15-19) whereas this stands at 83.9% and 42.8% for male and female youth in ages (20-24).
According to the Labor Force Survey 2017-18, labor force participation rate among youth of Khyber
Pakhtunkhwa (ages 20-24) is 81.06% among males and 15.74% among females. The unemployment
rate is 10.8% among male youth and 10.12% among female youth.

The last youth policy of Khyber Pakhtunkhwa was approved in 2016. The “Sports, Tourism, Culture,
Archaeology, Museums and Youth Affairs Department” is the administrative department, responsible
for steering youth sector policies and reforms. Reference may be made to the population policy of
Khyber Pakhtunkhwa (2015) which looks at the issue of the youth primarily from the perspective of
family planning and general health. However, greater emphasis is missing on youth health needs,
especially in the context of the minimum service delivery standards (MSDS) for health care. Cross-
cutting issues such as age, sexual health etc. have been incorporated in Khyber Pakhtunkhwa’s
MSDS, highlighting the importance of these issues for betterment of the youth. As regards, on-going
development interventions for the youth in Khyber Pakhtunkhwa, these include, Monthly stipend
Scheme for Unemployed Youth (2015) and Free Provincial Youth Technical Education Scheme
(2010-13)

Challenges
 Missing opportunities of entrepreneurship among the
youth including lack of access to meaningful
employment
 Weaknesses of education system and its failure in
empowering the young minds with a well-rounded,
contemporary and balanced education including moral
values and religious tolerance
 Limited opportunities of inculcating leadership skills in
Opportunities
 Returning peace to almost all regions and
districts of the province affords the possibility
of reaching out to the youth everywhere,
especially for counter radicalization programs
 Announcement and ownership of “Paigham e
Pakistan” by the state institutions and
religious scholars is an opportunity to
educate the youth

119
Census 2017
120
Labour Force Statistics, 2017-18 (Statistical Table 1.1)

86 | P a g e
 the youth, and non-engagement of the youth in political
decision making process
 Fewer organizations and systems for involving youth in
small- and medium- enterprise development activities
 Prevalence of menace of drug abuse due to
disenchantment with opportunities for growth
 Lack of gender specific mentorship programs and role
models
 Growing radicalization of youth, especially through
social media
 Greater emphasis of development
community on youth related initiatives is a
potential for more development partner
cooperation
 Popularity of sports like cricket, football,
volleyball and the track and field
competitions; and the natural good physique
of the youth in the province can be
harnessed for producing role model athletes
and sportsmen and women

Strategic Objectives:

Sector Objective
Youth Affairs Uplift Khyber Pakhtunkhwa Youth through Inclusive Employment
Opportunities by:
i. Providing seed money to the young entrepreneurs
ii. Fostering young leaders for meaningful participation in all
walks of life
iii. Ensuring increased opportunities for youth employment in
all sectors of economy
iv. Enhancing engagement with youth to enable them to play a
constructive role in of life
v. Unleashing the potential of young women in all spheres of
life through constructive and gainful engagement
vi. Undertaking special initiatives for youth empowerment

Milestones

Milestones Baseline Yearly Targets Means of

verification
2019-20 2020-21 2021-22 2022-23
Distribute Rs six N/a Rs 1.5 Rs 1.5 Rs 1.5 Rs 1.5 Annual
billion interest billion loan billion loan billion loan billion Progress
free loans disbursed disbursed disbursed loan Reports of the
among deserving disbursed Department
youth to promote
self-employment
Scale up Khyber N/a No of 25% 50% 50% -do-
Pakhtunkhwa initiatives increase in increase in increase
Impact launched No of No of in No of
Challenge – a initiatives initiatives initiatives
forum for youth launched launched launched
entrepreneurs
Establish Youth N/a Endowment Endowment Number of Number -do-
Welfare Fund Fund Beneficiarie of
Endowment Established Capitalized s Beneficiar
Fund to Support and Made ies
Extraordinary Functional
youth talent
Foster incubation N/a Legal & No. of Ideas No. of Ideas No. of -do-
centers such as Policy Implemente Implemente Ideas
NIC, DURSHAL Framework d Implemen

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 throughout for d increase ted
Khyber Incubation by 25% increase
Pakhtunkhwa Centers by 25%
Approved
Empower youth N/a No. Youth in No of Youth No of Youth No of -do-
through LGs in LG as Nazims Youth as
representation Committees of LGs Nazims of
as local bodies’ LGs
members in each
village & NC
Launch talent N/a Talent hunt No of 25% -25% -do-
hunt programs to program beneficiaries increase in increase
identify young Design of TH No of in No of
leaders and approved Program beneficiaries beneficiar
provide platforms -of TH ies -of TH
for success Program Program

Engage with N/a No of youth 25% 50% 50% -do-

youth to make involved increase in increase in increase
them champions No of youth No of youth in No of
against hate involved involved youth
speech involved
Establish job N/a No. of Job No. of Job No. of Job No. of -do-
placement Placement Placement Placement Job
centers across centers centers centers Placemen
Universities in established established established t centers
the province, in 20% in 20% in 30% establish
ensuring jobs for universities universities universities ed in 30%
at least 20% of universiti
young graduates es
Augment Khyber N/a No. of 20% 30% 30% -do-
Pakhtunkhwa interns in increase in increase in increase
youth internship the program number of number of in number
programs by interns interns of interns
increasing the
number of yearly
interns by double
Promote N/a Skill No of No of No of -do-
standardized Developmen Certification Beneficiarie Beneficiar
skills t s Provided s from Skills ies from
development Certification Trainings Skills
certifications and System Trainings
trainings in line Approved
with the industry
demands
Operationalize N/a Policy No of 20% -do-
youth framework Committees Increase in
development for Youth Launched No of
committee to Developmen Committees
work as a t
conduit between Committees
the youth and approved
the government

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 Implement N/a Women Compliance Compliance Complian -do-
special quotas to Quotas Reports Reports ce
ensure Approved Developed Developed Reports
participation of and Policy Develope
women in formulated d
Khyber
Pakhtunkhwa’s
economy &
industry
Ensure presence N/a Policy 25% of 50% of 100% of -do-
of female Frame work Districts Districts Districts
monitoring for Women have have have
officers in every Monitoring Women Women Women
district for timely Officers Monitoring Monitoring Monitorin
resolution of Approved Officers Officers g Officers
discrimination &
harassment
instances at
work place
Introduce special N/a Youth Dev No of No of No of -do-
youth Program beneficiaries beneficiaries beneficiar
development Designed increase by ies
programs for the and 25% increase
merged areas Approved by 50%
Establish Jawan N/a No of Jawan No of Jawan No of Jawan No of -do-
Markaz in every Markaz Markaz Markaz Jawan
district to serve established established established Markaz
as information in 25% of in 50 % of in 75% of establish
hub for youth districts districts districts ed in
development 100% of
districts
Promote youth N/a Tourism No of 25% 50% -do-
mobility & Package for beneficiaries increase in increase
tourism through Youth youth No of in No of
travel packages Launched beneficiaries beneficiar
for the youth youth ies youth
Initiate special N/a Sports Sports Sports Sports -do-
sports programs Programs Programs Programs Programs
for developing for Youth for Youth for Youth for Youth
sports facilities at launched in launched in launched in launched
the district level 25% of 50% of 75% of in 100%
districts districts districts of
districts

Yearly cost estimates

Initiatives Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Provide interest free loans to the youth 1,500 1,800 2,000 2,200
Establish Youth Welfare Endowment Fund
500 700 900 1,200

Special initiatives 500 800 1,200 2,000

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 6. THEMATIC AREA 4: ENERGY SECURITY

6.1 OVERVIEW
The province of Khyber Pakhtunkhwa Province (Khyber Pakhtunkhwa) is blessed with immense
hydropower potential on account of its topography and bounty of main upstream rivers such as Indus,
Siran, Kunhar, Chitral, Panjkora etc. Khyber Pakhtunkhwa has aggregate power potential of nearly
30,000 MW. Most of the hydel projects under development are in public sector, however, Government
of Khyber Pakhtunkhwa is also encouraging financing of hydropower projects through alternative
financing modes. For decades, the province served as the “energy-basket” of the country through
Tarbela Dam whose power generation capacities ultimately fell short on account of the demands of
population increase and industrialization.

The province has immense potential for generating more hydropower due to presence of rivers,
gorges, river tributaries and canals with reasonable gradients and v-shaped valleys carved out by
rivers. Natural landscape is ideal for building dams, tunnels and other civil works related to
hydropower development. In view of high demand for energy, hydropower projects offer stable
positive cash flows and high returns on investment. Hydropower projects also benefit from
exemptions of income tax, withholding tax on import of machinery and turnover rate tax.

S.n# Name of Project / Location Date of Installed Remarks

Completion Capacity
(MW)
1 Malakand-III , Dargai Nov 2008 81
2 Pehur, Swabi Mar 2010 18 Connected to PESCO
PPA not signed
3 Reshun, Chitral June 2007 4.2 Rehabilitation under
progress
4 Shishi, Chitral June 2010 1.8
5 Machai Oct 2017 2.6 Connected to PESCO
PPA not signed
6 Ranolia Oct 2017 17.0 Not Connected to National
Grid
PPA not signed
7 Daral Khwar Sep 2017 36.6 Connected to National Grid
but disconnected. PPA not
signed
Total 161.2
Revenue to province PKR 3 Billion

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The Provincial Government’s prime purpose for establishing Provincial Electricity Development
Organization (PEDO) was to have an investment arm in the power sector. Initially the Government
invested in private sector Independent Power Projects as minority shareholder through PEDO. PEDO
now is run on commercial basis and is undertaking energy projects by itself. Details of the Hydel
Power Projects (HPP) are given in the table above.

PEDO’s Hydropower Policy 2016 offers different incentives for encouraging public and private
investments in power generation.

PEDO’s power generation will be enhanced by another 216 MW upon completion of under-
construction projects. HPPs with installed capacity of
Under Construction PEDO Projects
911 MW are in advanced stage of planning phase and
Installed
are expected to start soon.
S.No. Project Location Capacity
(MW)
In addition to these, PEDO has completed 18 feasibility
Mansehr
studies for HPPs which has a cumulative capacity of 1 Jabori HPP 10.20
a
2,666MW. These sites have been awarded to various
2 Karora HPP Shangla 12.00
private, State Owned companies of Pakistan and
3 Koto HPP Lower Dir 40.80
foreign Countries. In addition, feasibility studies for
4 Matiltan HPP Swat 84.00
HPPs with potential capacity of 956MW have been
5 Lawi HPP Chitral 69.00
initiated and are in advanced stages.
Total 216.00
PEDO has initiated work on generation of 33.175 MW
of hydropower through Micro-Hydel Power Projects across 11 districts of the Province including
Abbottabad, Buner, Chitral Dir Lower, Dire Upper, Kohistan, Mansehra, Shangla, Swat, Battagram,
and Torghar.

Within the next two decades, renewables will be the main source of energy for the world as
governments in both developed and under-developed countries strive to move to hundred %
renewable energy sources over the next ten to twenty years. Renewable energy sources include
solar, in particular floating solar, wind, small hydel projects, and biomass. Energy & Power
Department is also working on the developing solar power generation in the form of the projects.

District Implementing EPC Agreement Tariff Submission Sum of COD

Entity Signing Date Capacity
(MW)
D.I.Khan FAS Energy In process Submitted 50.00 2021
Target Energy In process Submitted 50.00 2021
AASAl Power In process Submitted 49.50 2021
Kohat Siddiqsons In process To be Submitted 50.00 2021
Nowshera Siddiqsons In process To be Submitted 50.00 2021
Grand Total 249.50

Khyber Pakhtunkhwa is the new geological frontier, and due to the enabling environment provided by
the Government, the Province has become the largest oil (about 50%) producing province in Pakistan.
Huge deposits of the oil and gas have been discovered in southern belt of the Province, including
district Kohat, Karak, and Hangu. At present, Khyber Pakhtunkhwa has proven remaining recoverable

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reserves of more than 110 Million barrels of oil and 1,282 Million Cubic Feet of gas. Presently, the
province is producing around 43,000 barrels of oil per day, 430 million standard cubic feet per day of
gas and 823 metric tons per day of LPG from 2 out of 28 blocks. Further new blocks will be identified
in the NMA with estimated resources of more than 4.5 billion barrels of oil and 20 TCF of gas.

Khyber Pakhtunkhwa has opened new avenues of economic development in the Province through
the exploration of its indigenous oil and gas resources. Khyber Pakhtunkhwa holds promise for new
exciting discoveries, particularly in Kohat and Peshawar Basins, which has become main area of
focus after successful discoveries by OGDCL and MOL. Most of the area of Khyber Pakhtunkhwa is
still lying unexplored and therefore there is a high potential of future hydrocarbon prospects in the
Province.

The Government of Khyber Pakhtunkhwa being cognizant of oil and gas reserves and potential in the
energy sector established Khyber Pakhtunkhwa Oil & Gas Company Limited (KPOGCL) which is
entrusted with the responsibility of carrying out oil and gas exploration and production activities itself
and also to allure more foreign and local exploration and production companies, thus paving path for
fast track exploration and production in the province.

Key challenges persisting in this sector and the opportunities that exist are briefly noted below:

Challenges
 Low levels of investments both by public and
private sectors
 Lack of incentives for HP generation due to low
WAPDA tariffs
 Lack of provincial transmission system to power
industrial and commercial hubs through
provincially generated power
 Policy shifts discouraged consistent engagement
with private sector for boosting PPP in energy
sector
 E&P Department lacks the necessary expertise
and infrastructure to cope with the complex issues
of energy project design, implementation, tariff,
generation, transmission, distribution and revenue
collection
 Non-availability of viable grid interconnection and
transmission line arrangements
Opportunities
 Proven hydropower potential of around 30,000MW
in the province
 Untapped oil and gas reserves in Khyber
Pakhtunkhwa
 Energy generation from wastes and disposals in
the urban centers of the province
 Widened investment base due to expanded area
of Khyber Pakhtunkhwa upon the merger of
erstwhile FATA
 Potential for micro and mini hydel power projects
exist especially in the off-grid areas

6.2 STRATEGY
6.2.1 OBJECTIVES

The Khyber Pakhtunkhwa Government’s overarching objectives for the energy sector are as follows:

Sector Objectives
Energy and Power 1. Enhancing provincial power generation capacity through investments in
renewable energy sources
2. Create fiscal space for the provincial government through power generation
revenue

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 3. Progressive increases in provincial oil, gas and LPG production
4. Institutional strengthening and capacity building
5. Outreach of services to remote areas of PESCO and TESCO consumers for
redressal of issues faced by them
6. Access to sustainable and affordable energy

To achieve these objectives, the Department will have to utilize and leverage existing resources for
increased revenue generation for the Province, as well as establish new revenue streams in the
energy sector. In addition, the Department will need to initiate institutional reforms at the provincial
level, and work with the Federal government to reform the Federal level regulatory bodies and
agencies so that they are aligned with the Department and facilitate developing the energy resources
of the Province.

6.2.2 MILESTONES

Progress made towards achievement of strategic objectives outlined in the preceding section will be
measured with respect to the following set of milestones.

Department Milestones Yearly targets

2019-20 2020-21 2021-22 2022-23
PEDO Review and update Drafting of Approval by the Government and
Pakhtunkhwa Hydro Policy Policy implementation
Public Sector Power Projects 62.80 153.00
Completed (MW)
Private Sector Power Projects: 150.00 100.00
Completed (MW)
Public Sector Power Projects: 157.00 100.00 100.00 -
To be started (MW)
Private Sector Power Projects: 1,000.00 500.00 500.00 750.00
To be started (MW)
Revenue Increase (PKR in 3.00 5.00
billions)
No; of Mini / Micro Hydel 100.00 150.00 150.00 150.00
Power Projects
No; of Solar Home Solutions 1,400.00
No; of Solarization of Schools 2,100.00 2,082.00 2,000.00 1,500.00
No; of Solarization of Mosques 1,000.00 1,000.00 1,000.00 1,300.00
KPOGCL Total Oil Production (barrels 300.00 700.00 2,400.00 6,900.00
per day)
Total Gas Production (million 12.00 28.00 42.00 82.00
cubic feet)
Total LPG Production (tons per - - - 300.00
day)
FWO Refinery Land Establishment of 03 refineries by 2023
acquisition,
NOC’s,

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 Department Milestones Yearly targets
2019-20 2020-21 2021-22 2022-23
OGRA
License
Revenue from productions 87 204 408 7,485
blocks (Baratai, Paharpur,
Pezu, Kulachi, Lakki)
Exploration of new block Exploration an allocation of new blocks
Energy and Establishment of 1,000 micro- 1,000 new micro-hydel projects to be
Power hydel projects established by 2023
Department
Solarization of schools, 8,000 schools, 187 BHUs, and 4,400
mosques, and BHUs mosques to be solarized by 2023
No; of Solar Home Solutions 1,400
No; of Solarization of Schools 2,100 2,082 2,000 1,500
No; of Solarization of Mosques 1,000 1,000 1,000 1,300
Energy generation through Nil 249.5MW
Solar Plants
Electric Reformed legislative Amendmen Implementation
Inspectorate framework ts in legal
framework

6.3 SECTOR PLANS

The Khyber Pakhtunkhwa Government has planned a number of reform initiatives in order to support
and expand the energy base in the Province. Foremost, it intends to seek the Federal Government’s
cooperation to amend federal laws regarding the power sector for creation of a competitive energy
trading market. This will also entail corresponding updating of PEDO Act and Hydel Development
Fund Act. The provincial government is seeking tax exemption for PEDO’s power projects at par with
WAPDA and private sector project companies.

The Khyber Pakhtunkhwa Hydropower Policy 2016 is being updated with regard to captive power
projects and ultimate ownership of such projects. Also, it is essential to develop a policy for other
renewable energy sources, along the lines of the Khyber Pakhtunkhwa Hydropower Policy 2016, in
order to encourage power generation from alternate sources. The possibility of investment tax credits
and subsidies for renewable energy projects also needs to be assessed. The provincial government
may incentivize and reward installation of small solar units in existing residential and commercial
buildings to ease demand, especially during peak hours.

6.3.1 ENERGY AND POWER DEPARTMENT

The Provincial Government has initiated measures to restructure the Energy & Power Department in
order to address the current need for expertise and infrastructure in dealing with the complex issues
of energy project design, implementation, tariff, generation, transmission, and distribution and
revenue collection. The Department will be restructured into specialized sub-departments thereby
enhancing its effectiveness by acquiring highly skilled human resource. The Department also intends
to engage a consultant who would assess its human resource needs and assist with hiring the best
suited candidate for crucial posts.

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The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of the objectives and milestones of this thematic area over the period of SDS. These
include i) reforms initiatives; and ii) costed projects.

6.3.1.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Legislative, Restructuring of the department by forming three sub-departments i.e., generation,

Policy and transmission and distribution
Institutional
Reforms Amendment in the rules of business to support the restructuring process

Assessment of HR capacities and needs to be aligned with mandate of restructured

organization
Setting up of Provincial Transmission Company to address the issues of load
management

6.3.1.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Development Interventions Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Institutional Strengthening 60 140 200 300

6.3.2 PAKHTUNKHWA ELECTRICITY DEVELOPMENT ORGANIZATION

At present, the combined capacity of projects initiated by PEDO is 157 MW although it has planned
several more projects that await funding and implementation. PEDO has executed power purchase
agreements with the Central Power Purchasing Agency for only part of the energy that is supplied to
the national grid whereas the remaining capacity is supplied to the national grid with no compensation.
The Department is assisting PEDO negotiate with the Federal Government and the Central Power
Purchasing Agency to execute PPAs for electricity supply that is not covered by such agreements,
and to recover unpaid arrears. Break-up of Khyber Pakhtunkhwa’s current power generation capacity
is given in the table at the right.

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

6.3.2.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

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 Legislative, Restructuring of PEDO and hiring of professional workforce to optimally capitalize the
Policy and HPP potential of Khyber Pakhtunkhwa
Institutional
Reforms Review and enactment of PEDO Act
Needs assessment to determine the energy requirements of Special Economic Zones
under the CPEC initiatives
Amendment of HDF Act to facilitate financing of HPP

Innovation in Research on setting up waste-to-energy initiatives in urban and peri-urban localities of

service delivery Khyber Pakhtunkhwa
and governance
Public Private Developing and show-casing HPP projects at national and international level to attract
Partnership private investment for energy projects in Khyber Pakhtunkhwa

6.3.2.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Department Development Interventions Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
PEDO Power Generation through 28,000 28,000 28,000 28,000
renewable sources (HDF and
PPP)

6.3.3 KHYBER PAKHTUNKHWA OIL AND GAS COMPANY LIMITED

KPOGCL with the vision “to be one of the leading Exploration and Production Company of the region”
is determined to explore/exploit the untapped oil and gas resources in the Province through its own
resources along with farm-out / farm-in agreements in collaboration with other international and
national exploration and production companies via joint venture partnership. KPOGCL, a provincial
holding company in Khyber Pakhtunkhwa has demonstrated a strong commitment to economic
development and is working in collaboration with oil and gas industry to improve provincial economic
growth and these cooperative efforts will accelerate foreign investment in the Province oil and gas
reserve to reduce Pakistan’s dependency upon imported sources of energy.

To expedite oil and gas operational matters and to bring swift and commercial decision making,
Government of Khyber Pakhtunkhwa reconstituted the Board of Directors of KPOGCL aiming core
business enhancement. At present, KPOGCL is joint venture partner in six petroleum blocks (Baratai,
Paharpur, Karak North, Peshawar East Pezu and Kulachi). KPOGCL endeavors to increase joint
venture shares in prospective petroleum blocks, planned to farm-in into new blocks (Tirah, Orakzai,
Latambar, & Wali West) as joint venture and also strives to get new exploration blocks as an operator
with the aim to fast-track exploration and production activities and further promote the oil and gas
business in the Province. KPOGCL being operator of Lakki Block is currently engaged in seismic
processing and interpretation of vintage seismic data.

The Khyber Pakhtunkhwa Government intends to approach the Federal Government with a number
of proposals for supporting KPOGCL through its initial stages, such as giving KPOGCL a 5% carried

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interest with an option to increase up to 15% interest in each concession within the Province. This
will replace the current 2.5% working interest in exploration blocks of the Province.

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

6.3.3.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Legislative, Formation of Oil and Gas Development Fund
Policy and
Institutional • Amendments in Petroleum Policy 2012 and Rules 2013
Reforms i. Carried interest of minimum 5% to PHCs
ii. Creation of new exploration zones in NMAs with extra incentives

10 Years exemption for PHCs from income tax

Zero PST during exploration

All technical (G&G, production, drilling) data of Province to be provided free of cost to
respective PHCs
PHCs to be considered as strategic partners

Access to real time oil and gas production and consumption data

Approval of seepages guidelines

6.3.3.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Interventions Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Exploration and production activities 1,600 3,300 3,300 5,000
in JVs and Lakki Block
Institutional strengthening 50 65 100 110
Professional training 10 13 18 22
Investment roadshows - 5 8 12

6.3.4 ELECTRIC INSPECTORATE

The Khyber Pakhtunkhwa Government attaches significant importance to protecting rights of

electricity consumers within the Province. It performs this function through the Electric Inspectorate
that operates under the Energy & Power Department. The Inspectorate can serve as a cost-effective,
time saving alternative to litigation by consumers regarding billing disputes. The Inspectorate, at

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present, lacks the human resource, local presence and awareness among the masses that would
enable it to operate effectively. Therefore, plans have been devised to increase its human resource
and invest in training of existing staff. Adequately staffed additional field offices, especially in the
newly merged FATA areas, will be opened over the next four years. A public outreach program and
media campaign to create awareness about the Electorate’s activities for consumer rights protection
are also planned.

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

6.3.4.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Legislative, Policy and Conferment of Magisterial Powers
Institutional Reforms
Amendment in Electricity Rules 1937

Innovation for improved service System Automation

delivery and governance

6.3.4.2 C OSTED P ROJECTS

Development Interventions Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Purpose-built infrastructure / testing 75 75 50 -
laboratories
Establishment of Regional / 50 37 - -
Divisional offices

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 7. THEMATIC AREA 5: LOCAL GOVERNANCE, URBAN & RURAL
DEVELOPMENT, HOUSING & TRANSPORT

7.1 OVERVIEW
Government of Khyber Pakhtunkhwa has demonstrated its strong political commitment to the cause
of local government system in the last five years. The new government has taken a policy decision
to further deepen the scale of devolution and has accordingly undertaken a rigorous review of the
existing local governance system in the province. A reform package is in the process of being
presented for final approval. Similarly, the government is also extending local governance system to
the NMA for empowering local communities in these areas.

Latest local government system in the province has been a success story on many counts. Under
Khyber Pakhtunkhwa LG Act, 2013, a number of innovations were introduced in the shape of transfer
of up to 30% development budget to the local governments; establishment of village and
neighborhood councils and devolution of key service subjects to the local level. Provincial
Government is presently in the process of finalizing important set of amendments to the local
governance system, where the fulcrum of decentralization will be Tehsil as around 130 tehsil rural
governments will be established and empowered politically and financially for performance of
devolved functions. Alongside the municipal functions, tehsil rural governments will also be made
responsible for devolved functions including primary healthcare and school education. It is pertinent
to mention that Provincial Government is also extending local governance system to the NMA which
represents a bold experience for mainstreaming erstwhile FATA region of the province. It is expected
that the latest round of local governance reforms will improve citizen-state relationship besides
contributing to the objectives of improved and accountable service delivery for common citizens in
the province.

Mainstreaming urban governance is another pillar of decentralization reforms being finalized in the
province. The provincial cities produce about 80% of the province’s wealth and are home to about
20% of the population. Rapid population growth at the rate of 2.89% has caused the urban
environment to expand rapidly in an uncoordinated, unplanned, and unregulated manner. Basic urban
services such as water supply, solid waste management and treatment, storm water drainage, and
urban transport facilities are becoming increasingly unable to respond to the population pressures
and economic demands of the province.

As per latest population estimates, urban demography of the province has undergone huge changes.
Over 3/4th of province’s population still lives in rural areas but almost 2/3rd of this population lives
within a travel time of one hour from a city, whereas 90% of the population of the province lives within
two hours distance from an urban center121. The province has been witnessing the emergence of
urban agglomeration phenomenon in three categories; a) Central Khyber Pakhtunkhwa where
districts of Peshawar, Charsadda, Mardan, Swabi and Nowshera cover almost 10% of the area of the
province and contain 37% of the population concentrated in and around four cities b) Hazara Region
including districts of Haripur, Abbottabad and Mansehra, with an area of 11% of the province,

121
Executive Summary; Reclaiming Prosperity in Khyber Pakhtunkhwa; ICG, 2015

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containing 15% of the provincial population; c) Other conglomerates include Swat, D.I.Khan and
Kohat. 122 Two further aspects of urban phenomenon in Khyber Pakhtunkhwa province are also
noteworthy, namely incidence of double digit poverty in some of the cities of the province (forming
part of Pakistan’s top ten cities on this count) as well as the visible phenomenon of rural population
shifting to urban and peri-urban areas.123

Population by urban/rural in Khyber Pakhtunkhwa-2017 Census

Description Urban Rural Total
Population 572,96,34 247,93,737 305,23,371
Male 297,23,67 124,95,278 154,67,645
Female 275,65,77 122,98,236 150,54,813
Transgender 690 223 913
House Holds 741014 3104154 384,51,68

It is on account of these factors that the provincial government in Khyber Pakhtunkhwa has placed
greater focus on important components of urban development. Key actions under Government’s 100
Days Plan on urbanization sector include themes of city governments (Action 1), rapid economic
growth through economic growth strategy ( Action 11 ), availability of clean drinking water in urban
areas ( Action 22 ), pollution control ( Action 23 ) and transformation of Peshawar City ( Action 26 ).
Present document is accordingly designed to reflect the same strategic level priorities which the
provincial government aims to pursue in the coming years through pursuit of multiple opportunities in
the sector.

The next section provides a summary presentation of the existing challenges and emerging
opportunities in Local Governance, Urban Development, Transport and Housing sectors in the
province which will form the basis of focused interventions under the present strategy.

Challenges Opportunities
 Reorganization of the new local government system with the  Further democratic strengthening of
Tehsil as the new stage for service delivery manganite and local governments will usher in reformed
the roll out to NMAs for the first time. local governance regime for both the
 The absence of a cohesive urban planning framework which urban as well as rural areas.
has led to non-adherence to spatial planning principles  Reorganization of the local government
 Weak enforcement of zoning regulations &master plan institutions i.e. Local Council Board,
provisions. Local Government Directorate General,
PUDB etc.
 Overlapping & unclear jurisdictions between province & local
governments.  Government of Khyber Pakhtunkhwa
has identified125 urban agglomerates
 Imbalance between existing and desirable incentives to as one of the key growth drivers in the
service &industrial sectors, especially when it is seen that province which could spur fast track
services sector is already on center stage of formal as well development in the urban areas. These
as informal economy of Khyber Pakhtunkhwa urban centers. can be groomed as hubs of job
 “Under-Utilized” and sub-optimal utilization of true potential opportunities and engines of growth by
of “Land Markets” within the urban areas. This can be cited balancing service sector growth
as one of the major reasons for prevalence of double digit alongside boosting development of
industry and green economies.

122
ibid
123
Government of Pakistan, 2018 “State of Pakistan Cities’ Report” 8
125
Reclaiming Prosperity in Khyber Pakhtunkhwa, 2016

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 Challenges Opportunities
urban poverty124.  There is opportunity for Vertical
 Multiple organizations with unclear and overlapping Development which can lead to
mandates (Municipalities, District Administrations, increased housing facilities, efficient
Development Authorities, Municipal Service Agencies, land use &modernization of living space.
Cantonment Boards, Industrial Estates, Provincial  More recent emphasis on mass transit
Government Bodies, Federal Government bodies etc.) with &rapid mobility systems, can bring dual
little effort to delineate “agency” and “authority” roles in urban benefits to public as well as private
governance. This leads to turf battles among functionaries. transport systems.
 Limited public transport facilities and the missing systems for
pedestrian and motorist convenience (e.g. adequate parking,
vehicle testing and emission) is limiting mobility in urban
areas.
 Lack of institutional capacity and budgetary constraints have
combined to lower the living standards of citizens in urban
centers.
 Shortage of adequate housing units has given rise to slums,
speculative land and unregulated rental markets.
 Unbridled mushrooming of Hosing societies
 Challenges of environmental degradation and the risk of
major disasters

7.2 STRATEGY
7.2.1 OBJECTIVES

Sector Objectives
Local Governance & 1: Real devolution with tehsil council as the fulcrum and continuation of the
Rural Development VCNC with reduced members and represented in the tehsil council
2: Improved local governance and institutional rejuvenation for balanced urban
and rural development
3: Sustainable rural development through effective local governance &rural
uplift to forestall unplanned urban migration
4: Reorganized provincial and local institutions for local governance
Urban Development 5: Enhanced quality, accessibility and affordability of better municipal services
through improved infrastructure, secured urban centers & efficient service
delivery
6: Balanced economic growth for jobs creation and mainstreaming services
sector
7: Streamlined physical and spatial planning along with effective land use
regulation & enforcement
8: Role of private sector and civil society
Transport 9. Enhanced Connectivity through efficient mobility and improved mass transit,
public transport, non-vehicular transport (bicycle lanes) and pedestrian
facilitation

124
The State of Pakistani Cities’ Report, 2018, Government of Pakistan

101 | P a g e
 10. Improved regulation and enforcement regime for governing transport
sector in the best interest of commuters and pedestrians
11. Improved transport planning and research regime for complimenting urban
development reform agenda of the government
Housing 12. Sustainable Growth in Housing Sector through additional housing units &
Satellite Towns

7.2.2 MILESTONES

Milestones Baseline Yearly Target Means of

Verificatio
2019-20 2020-21 2021-22 2022-23
n
Forming 120 plus new tehsil Nil 120 - - - LGRD
government set ups Reports
Election of tehsil chairmen Nil 120 - - - -do-
by direct elections
Revamp the PFC structure Old Award PFC Award Resource - - Revised
and award for the new set announced Transfer PFC
up as per Award
new
formula
New institutional architecture RoBs as New RoBs New Trainings - Copies of
for the new system (Rules of per LG Developed RoBs RoBs
Business etc.) Act 2013 & rolled out
Approved and
trainings
Fully functional local NA Minimum 20% 50% 80% Citizen
governments ensure Service Complian Complian Complian Satisfactio
improved service Delivery ce to ce to ce to n Survey
Standards Service Service Service
Notified Delivery Delivery Delivery
Standard Standard Standards
s s
Need based Budget by each Pilot Approval of Approval Approval Approval
local council passed by end District Budget by of Budget of Budget of Budget
of July each year. Only July by by July by July by by July by
50% of by 75 % 100% of 100% of
LGs of LGs LGs LGs
Allocation of 30 % of the 30% 30% of Allocated Allocated Allocated P&D
Provincial ADP for local Minimum province 30% 30% 30% Annual
governments ADP released released released Report
allocated to by 75% by 100 % by 100 %
LGs
Improved Municipal services NA 50% of LG 60% of 70% of 80% of LGE&RD
through LG projects (Street ADP LG ADP LG ADP LG ADP departmen
pavement, Drinking water allocated to allocated allocated allocated t annual
supply, Solid waste Municipal to to to progress
collection/treatment, street Service Municipal Municipal Municipal report
lights etc.) Delivery Service Service Service
Projects Delivery Delivery Delivery
projects projects projects

102 | P a g e
 Milestones Baseline Yearly Target Means of
Verificatio
2019-20 2020-21 2021-22 2022-23
n
Improved life Quality through NA 25% of 50% of 75% of - Citizen
Rehabilitation and citizens citizens citizens Satisfactio
construction of Rural Roads express express express n Survey
and drains. satisfaction satisfacti satisfactio
on n
Launch of Community NA Developme CD CD - Project
Development Programme nt and Program Program Progress
for Social Uplift & Local approval of Lunched Lunched and
Economic Growth CD in 25% of in 50% of Completio
Program the the n Reports
Districts Districts
Environmental Improvement Very few Civic Civic Civic Civic Project
through Establishment of parks in amenities amenities amenities amenities Completio
Parks, Picnic Spots and Play dilapidate established establish establish establishe n Reports
Grounds. d state in 25 % of ed in 50 ed in 75 d in 100
the districts % of the % of the % of the
districts districts districts
Uplift & Beautification NA Beautificati Beautific Beautifica Beautifica Project
schemes in the province on Projects ation tion tion Completio
at all Projects Projects Projects n Reports
Divisional at all at 50% of at 80% of
HQs District Tehsil Tehsil
HQs HQs HQs
Construction of high quality Plans for Plans for 25% of 50% of
bus terminals in District & Constructio Construct District & District &
Tehsil HQs across the n of Bus ion of Tehsil Tehsil
province Terminals Bus HQs have HQs have
in 25 % Terminal Bus Bus
District & s in 50% Terminals Terminals
Tehsil HQs District & with with
Tehsil complete complete
HQs citizen citizen
facilitation facilitation
Construction of Roads, Provincial Master Master Master
Highways, Inter-changes & Master Plan Plan Plan
Flyovers in Peshawar & Plan Impleme Implemen Implemen
Major Cities. developed ntation tation tation
and starts in starts in starts in
approved 25 % of 50 % of 75 % of
for highway Divisional Divisional Divisional
interchang Headqua Headquar Headquar
es, flyovers rters ters ters
and inter-
changes
Spatial Development Plans ( NA 25% of 50% of 75% of 100% of Reports by
Master, Land use & urban districts districts the the Urban
renewal/regeneration Plans ) covered by covered districts districts Policy Unit
for major Cities of the spatial by spatial covered by spatial
province developme developm by spatial developm
nt plans ent plans developm ent plans
ent plans

103 | P a g e
 Milestones Baseline Yearly Target Means of
Verificatio
2019-20 2020-21 2021-22 2022-23
n
Integrated land use plan for NA Integrated Urban Urban Urban Reports by
the province including its Provincial Data seta Data seta Data seta Urban
urban areas Including Land use and GIS and GIS and GIS Policy Unit
development and plan develope develope developed
maintenance of urban data developed d to d to cover to cover
set and GIS to promote and cover 50% of 75% of
research and disseminate approved 25% of the the
innovations in urban sector the province province
governance province

Development of Quality, NA Provincial Plan Plan Plan Provincial

Reliable, Sustainable and Transport implemen implemen implement Transport
Resilient transport Infrastructu ted ted ed Plan
infrastructure to support re Plan achieving achieving achieving Implement
economic development as developed 25% of 40% of 75% of ation
per SDG-9 targeting and the the the Report
passenger and freight approved targets targets targets
volume by mode of
transport. (SDG-9)
Making cities sustainable NA Feasibility Multi- Strategy - Implement
through promoting Multi Study for Model Implemen ation
Modal Transport Network Multi-Model Transport tation in Reports by
including road network and, Transport Network Peshawar Departme
the railway services (as per Network Strategy City nt
SDG-11) Completed approved
Development of a NA Provincial Rules to Complian Complian Reports by
comprehensive system of Town operation ce ce Urban
town planning at different Planning alize reported reported Policy Unit
levels in the province to Act Town from 25% from 50%
ensure systematic integrated Approved Planning of the of the
growth of urban areas Act districts districts
approved

Undertaking concerted NA Comprehe 25% 50% 75%

efforts for providing nsive additional additional additional Housing
“Housing for all” including Housing for housing housing housing for All
common citizens to achieve All units units units Program
population stabilization” Program added in added in added in Progress
approved the the the Reports
and province province province
launched

To develop a strategy for Strategy Strategy Strategy

acquisition and development developed implemen - - Implement
of sites through public tation ation
finances with the assistance and Report
of private sector for NA resource
overcoming housing mobilizati
shortage in the province on
started
To make efforts for provision Low Cost Program Program Program Program
of low cost housing facilities Housing implemen implemen implement Implement
to less affluent and Program tation tation ation ation
for the started started started Report

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 Milestones Baseline Yearly Target Means of
Verificatio
2019-20 2020-21 2021-22 2022-23
n
vulnerable sections of province with 25% with 50% with 75%
society developed of target of target of target
and achievem achievem achievem
approved ent ent ent
Increase in housing stock NA Policy 25% of 50% of - Housing
through checking growth of framework notified notified Departme
slums and Kachi abadies, & for slums slums nt
formulation of resettlement improving and kachi and kachi Progress
and relocation plans living abadies abadies Report
(through a relevant agency conditions improved improved
to be notified by the in slums through through
government) approved policy policy
framewor framewor
k k
implemen implemen
tation tation
Comprehensive programme NA Provincial All All district - Housing
for the development of Plan divisional HQs Departme
satellite, intermediate and developed HQs develop nt
secondary towns to reduce develop plans for Progress
migration and meeting plans for at least 1 Report
housing demands at least 1 satellite
satellite town
town

7.3 SECTOR PLAN

7.3.1 LOCAL GOVERNMENT

Following is an indicative list of the suggested policy and institutional reforms. It may be noted that
this list is not exhaustive and relevant departments and sectors will be encouraged to identify and
pursue additional reform initiatives as per unfolding situation in near future.

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

7.3.1.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Intervention

Legislative, Policy Finalization/Enactment of Khyber Pakhtunkhwa LG Act 2019

and Institutional
Reforms Development of Consequential Legislation for Khyber Pakhtunkhwa LG Act 2019
Development of Over-arching Framework for Area Development Authorities
Establishment of LG Reform Unit in LGRD Department
Development and approval of Site Development Rules

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 Reform Area Reform Intervention

Formulation and enactment of Anti-Wall Chalking Act

Framing and enactment of Spatial Planning Act
Establishment of Building Control Authority
Development of HR Rules and Regulations for Local Council Board, Peshawar
Development Authority, and Directorate General of Local Government
Development of Asset Management, Contract Management and Property Rules
Public Private Partnership Framework for LG sector
Innovation in Municipal Service Delivery Innovations (Community led development, PPP, Out-
governance and sourcing)
service delivery and
Linkages with other Citizen Satisfaction & Feedback Innovations (Grievance Redressal)
sectors Academic Twining and Institutional Partnerships for Knowledge building
(Academic Richness in Public Sector Governance)
Evidence based decision making by adoption of an effective Human Resource
strategy and IT solution encompassing need assessment, gap analysis,
recruitment, training, development, career progression, career planning, refresher
trainings, performance management and feedback, transfers, postings and
retirement planning; with links to budgeting/finance module (Linked with Khyber
Pakhtunkhwa IT Board)
Moving towards Smart Cities Paradigm (Smart Cities )
Establish a uniform procurement management system with dedicated
Procurement specialists (Linked with Khyber Pakhtunkhwa IT Board)
Next Generation Mobility ( pro-pedestrian, non-motorized transpiration, Pilots for
promoting bikes )
Urban Farming (Vertical Vegetable Gardens, Kitchen Garden)
Digitally Reprogrammable Space-Concentration & not Expansion
Urban Forestry
Public Private The Sharing City (Unleashing Spare Capacity; Car Sharing, Air BnB )
Partnership
Accessing Private Sector Equity & Innovative Financing Instruments (Private
Sector Financing for Civic Investment
Encouraging Urban Start Up Businesses and Idea Incubation/Piloting (Innovative
Business Encouragement)
Mobility on Demand (Uber)

7.3.1.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Intervention Costs Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Municipal Services Program 70 70 70 83
Khyber Pakhtunkhwa District Governance & 800 800 500 441
Community Improvement Program

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 Intervention Costs Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Rehabilitation of Rural Roads in Khyber 600 600 600 779
Pakhtunkhwa Province
Community-based Rural Development Projects 1,902 2,708 3,179 3,825
Construction of Northern section of Ring Road 837 921 1,013 563
(Missing Link), Peshawar from Pajjagi road to
Warsak Road.
Peshawar Uplift Programme 440 732 2,306 1,947
Construction of Northern Section of Ring Road - - - -
(Missing Link), from Warsak Road to Nasir Bagh
Road
Internal Roads Rehabilitation Project in 250 276 303 1653
Peshawar City. (SDG)
New General Bus Stand in Peshawar (Funds - - - 4,507
would be raised by PDA) (SDG).
Improvement of Municipal Roads in Urban Areas - 550 577 -
of Khyber Pakhtunkhwa
Uplift & Beautification of Divisional Headquarters 600 660 726 575
in Khyber Pakhtunkhwa
Provision for WSSCs in Divisional HQs of 600 660 726 264
Khyber Pakhtunkhwa
District Uplift & Beautification Scheme 169 186 204 4,288

7.3.2 HOUSING AND PHYSICAL PLANNING SECTOR

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

7.3.2.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Legislative, Legislation for the proper Planning & Development Control in Urban/Rural Areas
Policy and
Institutional Subsidiary Legislation to streamline, Standards, Engineering Standards / Codes,
Reforms Building Codes, Urban Design Standards and Strategic Development Plans,
Condominium Development Regulatory Framework
Innovation in Evidence based decision making by adoption of an effective Human Resource
governance and strategy and IT solution encompassing need assessment, gap analysis, recruitment,
service delivery training, development, career progression, career planning, refresher trainings,
and Linkages performance management and feedback, transfers, postings and retirement planning;
with other with links to budgeting/finance module, (Linked with Khyber Pakhtunkhwa IT Board)
sectors
Establish a uniform procurement management system with dedicated Procurement
specialists (Linked with Khyber Pakhtunkhwa IT Board)

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 Public Private Partnering with the private sector for implementation of the housing sector plan
Partnership

7.3.2.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Intervention Yearly Cost (Rs in Million)

2019-20 2020-21 2021-22 2022-23
Construction of High Rise Flats for Government. 241 231 50 .
Servants at Phase-V, Hayatabad, Peshawar
Construction of Flats for Civil quarters, Peshawar 100 100 300 151

F/s for establishment of Housing Schemes for . . . .

Government. Servants/General Public in Khyber
Pakhtunkhwa
Development of Various Housing Schemes for 60 7,675
Government. Servants/General Public on state Land in
Khyber Pakhtunkhwa
Establishment of Housing Foundation for Government. 15 20 25 20
Servants
Feasibility study for Construction of Commercial Multi 15 10 - -
Plexes in Mardan Pabbi & Warsak, Peshawar
Construction of Flats at Civil Quarter Peshawar 50 150 250 440
Construction of Multi Plexes at Mardan 147 147 147 147
Construction of Multi Plexes at Pabbi 255 509 509 255
Construction of Commercial Multi Plexes at Warsak 323 323 323 323
Land Bank for Satellite Town 1,250 1,250 1,250 1,250
Construction of Flats at Civil Quarter Peshawar 500 500 500 500
Urban Policy Unit 77 85 93 565
Strategic Development Plan for Div. HQrs 128 123 44 -
Slums Up gradation 103 115 - -
Khyber Pakhtunkhwa Cities Improvement Project 335 151 168 126
Development of Provincial Land Use Plan 15 - - -
Preparation of Master Plan for Conservation and 26 25 25 -
Renewal of the Walled City of Peshawar Khyber
Pakhtunkhwa
Preliminary Feasibility Survey for outer ring road 6 13 - -
Peshawar.

7.3.3 T RANSPORT

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The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

7.3.3.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Intervention

Legislative, Development of Urban Mobility & Sustainable Transport Sector Policy

Policy and
Institutional Development of Transport Sector Regulatory Framework
Reforms Institutional Development Arrangements for Transport Planning, Data Generation,
Research and Statistics Policy
Re-organization of Motor Vehicle Authority of modern lines
Re-organization of Provincial and Regional Transport Authorities on modern lines
Development of Pedestrian Facilitation Policy
Evidence based decision making by adoption of an effective Human Resource strategy
Innovation in and IT solution encompassing need assessment, gap analysis, recruitment, training,
governance development, career progression, career planning, refresher trainings, performance
and service management and feedback, transfers, postings and retirement planning; with links to
delivery and budgeting/finance module, (Linked with Khyber Pakhtunkhwa IT Board)
Linkages with Establishment of dedicated procurement management system aligned with transport
other sectors sector requirements
Public Private Expansion of female only transport project (Pink bus) to 12 districts
Partnership

7.3.3.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Construction of Peshawar Mass Transit System 2,000 4,000 4,000 3,116
Detailed Design of Peshawar BRT Corridor-2, GT 100 100 34 -
Jamrud Road
Greater Peshawar Region Mass Transit – Circular 25 25 - -
Railways
Establishment of Transport Planning & Traffic 100 100 11 -
Engineering Unit
Establishment of Transport Inspection Stations in 50 100 150 72
Khyber Pakhtunkhwa province
Capacity Building of Transport Department 100 100 100 100
Evidence-based Transport Policy - - - -

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 Intervention Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Office Automation & Introduction of Web Based 50 50 50 50
Technology
Establishment of Transport Institute - - - -

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8. THEMATIC AREA 6: AGRICULTURE, FOOD SECURITY AND
SAFE ENVIRONMENT

Khyber Pakhtunkhwa (Khyber Pakhtunkhwa) has got tremendous opportunities in developing and
promoting Green Economy that constitute Agriculture, Livestock, Fisheries, Food, Forestry, Wildlife
and Environment. The Green Economy offers livelihood opportunities for over one third of the
population of Khyber Pakhtunkhwa and play a major role in supporting the tourism industry and
organic farming besides supplying fresh water resources for irrigation and drinking purposes. The
province has got largely mountainous terrain with only 30 % of the total land available as cultivable.
Agriculture which employs over 41% of the labor force and contributes more than 14% to provincial
GDP, is one of the key driver of growth and livelihood opportunities. The Household Integrated
Economic Survey (HIES), 2015-16 has reported that the number of those living below poverty line in
Khyber Pakhtunkhwa has gone down by nearly half to the level of 23.86 %.

Agriculture is a key driver of growth in Khyber Pakhtunkhwa as it employs 41% of the labor force and
contributes 14% to the provincial gross domestic product (GDP). Despite significant potential, the
sector faces a myriad of problems and challenges, but at the same time provides opportunities for
growth. Management of the sector is important to overcome these challenges and take advantage of
the opportunities. However, a sustainable agriculture sector will only be attained if environmental
protection and conservation as well as climate change issues are given due consideration. These
efforts will directly support achievement of the sustainable development goals (SDGs) 2, 8, 10 and
13.

8.1 OVERVIEW
Khyber Pakhtunkhwa has a total land area of 10.17 million hectares, only 1.87 M ha of which is
cultivable. Out of this cultivable area, 56% is rain-fed. Around 90% of farmers have small
landholdings, typically ranging from 0.4 to 5 ha (1.0 to 12.5 acres). The province has an uneven
rainfall distribution pattern along its five agro-ecological zones – from 250 mm in the south (D.I. Khan)
to over 1,000 mm in the north (Abbottabad).

Almost all crops can be grown in the province. Fruit area covers 36,702 ha with an average annual
production of 333,716 metric tons (MT). Area for vegetables is around 32,682 ha with an average
annual production of 336,083 MT. The province has a livestock inventory of 8.3 M head of cattle and
2.5 M head of buffalo, representing 20% and 7% of the total livestock production in the country. In
addition, Khyber Pakhtunkhwa produces 10% of milk and 9% of total meat production of Pakistan.

Water sources include 6,100 km of rivers and streams, 6,400 ha of lakes and 54,600 ha of dams and
reservoirs which also serve as fish farms for around 3,200 tons of harvest per year.

Wheat buffer stocking is done as this is the staple food in the province, with grain Godowns in every
district to manage reserves. In 2017-18, the wheat requirement of Khyber Pakhtunkhwa was
3,894,279 MT and 635,159 MT for NMAs.

Environment, Forestry and Wildlife Department play a major role in not only protecting the
environment but also increasing production of the green economy goods and services. The rugged

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terrain of Khyber Pakhtunkhwa is well suited to forestry and wildlife resources as forests cover over
20.6% of the total geographic area in Khyber Pakhtunkhwa. The Billion Tree Tsunami initiative which
has restored and planted trees over 350,000 hectares of degraded forest lands is internationally
recognized initiative which is being replicated throughout Pakistan. The Provincial Government during
last five years prioritized forestry sector and injected financial resources to the tune of Rs.6889.465
million by launching Green Growth Initiative (GGI) in 2013-14-2017-18. The Billion Trees Afforestation
Project (BTAP) was conceived and target of raising One Billion Seedlings set under GGI which was
achieved within 3 years. Resultantly, the forest cover of the province has increased by 6%.

Challenges
 Land fragmentation, small landholding, and
infertile lands are major obstacles in
promoting green economy in the area
 Agricultural land conversion for human
settlements also contributes to the
decreasing cultivable land area
 Low income from farming, high postharvest
losses and lack of value adding knowledge
and activities are some of the production
related challenges faced by the farmers
 Support services like credit and agricultural
insurance are not common
 Environmental problems also beset the
sector, as dumping of untreated solid
wastes; sewage and industrial effluents on
land and water bodies are unregulated
 Climate change has also affected not only
the food production sector, but also the
forest and wildlife
 Dry arid areas in the south as well as the
fragile mountains and glaciers of the north
need special adaptation strategies
Opportunities
 Federal agriculture uplift programme will inject the
needed investment in the agriculture sector in Khyber
Pakhtunkhwa which can be exploited to fill the
developmental gaps
 The Khyber Pakhtunkhwa Province is blessed with a
unique agro-ecological landscape mostly possessing
pollution free air, land and water resources in the
upland watersheds that offer great deal of opportunities
for eco-tourism, biodiversity, organic farming and high
value crop production
 The cold water fish, customary trans-humid small
ruminants and open grazing of big livestock, backyard
rural poultry are well suited to enterprise development
for high in demand low cholesterol organic food
 Meeting the national and global obligations of enforcing
the relevant Multilateral Environment Agreements
(MEAs) and achieving the SDGs targets, Khyber
Pakhtunkhwa can earn a great deal of mileage and
good well from the national and global community
besides paving way for resource mobilization
opportunities
 The green economy development can greatly help in
the achievement of “the future we want” targets set at
the World Conference on Sustainable Development,
2012 and the SDGs targets that Pakistan has adapted
in 2016
 CPEC having special economic zone at Rashakai,
Mardan in Khyber Pakhtunkhwa can play pivotal role in
increasing the trade volume as well as increased
exports from Khyber Pakhtunkhwa

8.2 STRATEGY
8.2.1 OBJECTIVES

Sector Objectives
Food Production and 1 Increased food production and trade
Trade
2 Use of climate-smart production technologies
3 Value-addition and reduced post-harvest losses
4 Agricultural insurance and credit

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Environment and Natural
Resources Management
Institutions, Partnerships
and Innovation
5 Agricultural land zoning
6 Reforestation
7 Sustainable resources use management
8 Water and soil pollution control
9 Institutional and policy reforms
10 Public-private partnerships
11 Science, technology and innovation

8.2.2 MILESTONES

Milestone Yearly Target

Baseline 2019-20 2020-21 2021-22 2022-23 Means of
Verificati
on
Increased vegetable production 376,899 387,889 399,525 411,510 425,912 Bureau
(MT) (3% annually) of
Statistics
Increased fruit production (MT) 96,078 100,078 104,578 109,878 113,578 -do-
(4% annually)
Increased livestock inventory 10.8M 11.34 M 11.907 M 12.502 M 13.127 M -do-
(head) (5% annually)
Mass animal vaccination and 1.08 M 1.13 M 1.19 M 1.25 M 1.31 M - do-
deworming (10% of inventory)
Increased area under certified 90,000 110,000 140,000 170,000 20,000 - do-
wheat seed (acres)
Increased production area for 32,682 33,280 33,946 34,625 35,317 - do-
vegetables (ha) (2% annually)
Establish and strengthen 32 32 32 32 Dept of
government seed production units Agric.
or nurseries (4 per district) reports
Establish fish hatcheries and fish 50 53 56 58 Dept of
farms Fish
reports
Establishment of animal 4 6 6 8 Livestock
laboratories Dept.
report
Farm Service Centers supported 32 32 32 32 Dept of
(1 per district) Agric.
reports
Flooding structures (number) 2000 2000 2500 3000 Survey
Irrigated area (2 % increase 1.00 M 1.03 M 1.05 M 1.07 M 1.09 M Bureau
annually) of Stat
Disaster management plan (1 per 16 16 Survey
district)
Soil conservation structures 6,650 6,700 6,700 6,700 Survey
Rainwater harvesting structures 4,500 6,500 9,500 9,500 Survey

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 Milestone Yearly Target
Baseline 2019-20 2020-21 2021-22 2022-23 Means of
Verificati
on
Number of solarized tube wells 218 218 211 270 Survey
Reduction in post-harvest losses 5% 5% 5% 5% Survey
in crops
Postharvest facilities (4 per 144 144 144 144 Survey
district/year)
Enhancing food storage capacity 19.6% 24.4% 22.2% 26.7% Food
up to 30,000 tons Dept
reports
Modernization of storage at NRC 0% 9.5% 42.9% 47.6% - do -
Azakhel up to 15,000 tons
Rehabilitation of existing 20.0% 20.0% 38.0% 40.0% - do-
Godowns (up to 50,000 tons)
Cold storage facilities. (1 per 10 10 10 16 Survey
district)
Community-based enterprises 20 20 20 12 Survey
Trainings for SMSEs 40 40 40 40 Training
reports
Credit program (Rs) 1B 1B 1B 1B Dept of
Agricultur
e
Insurance guarantee fund (Rs) 200 M 200 M 200 M 200 M Dept of
Agricultur
e
Cultivated area (ha) 1.87 M 1.87 M 1.87 M 1.87 M 1.87 M Bureau
of stat
Area converted to non-agricultural 0 0 0 0 -do-
use
Trees Planted 100,000 100,000 100,000 100,000 Dept of
Forestry
Increased forest cover 26% 27% 28% 29% 30% -do -
Genetic resources management 1 -do-
plan (1 for province)
Watershed management plan (1 10 10 10 2 -do-
per district)
Capacity built for EPA for 100 100 100 100 EPA
enhanced Monitoring of over 300 reports
units through GIS
Inventory of Industrial Pollution 64 64 64 64 -do-
units (2 inventory per district per
year
Public-private partnerships 100 100 100 100 Dept of
formed Trade

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 Milestone Yearly Target
Baseline 2019-20 2020-21 2021-22 2022-23 Means of
Verificati
on
Private sector availing incentives 50 50 50 50 Dept of
Finance
Private sector investments (Rs M) 500 500 500 500 -do-
Technologies generated 50 50 50 50 R&D
Center
Technologies disseminated 50 100 150 200 Dept of
Agricultur
e
Institutions supported 40 40 40 40 -do-
Trainings conducted 160 160 160 160 -do-
(5/district/year)
Business incubation 32 32 32 32 -do-
Standards developed 2 2 2 2 -do-
Farmers trained (10/training/year) 1,600 1,600 1,600 1,600 -do-

8.3 SECTOR PLANS

The strategies will be implemented in close coordination with relevant departments and agencies of
government such as the Department of Agriculture, Environment, Forestry, Fishery, Wildlife,
Livestock, Finance and Trade. More importantly, the role of the Farm Service Centers as conduits of
inputs and credit, marketing of products, service providers of farm machineries and post-harvest
equipment and storage, and innovations will be explored. The strategy will be implemented for the
whole province, including the NMAs.

8.3.1 FOOD PRODUCTION AND T RADE

The first strategy on food production and trade focuses on enhancing the productivity and growth of
the sector. This is done through the use of technologies aimed at improving yields and increasing
production of horticultural crops and livestock, farm diversification, provision of credit and insurance,
as well as climate smart actions through capability building and training. The improvement in
production is expected to result to increases in marketable surplus. Thus to ensure optimal returns to
producers, postharvest facilities to minimize losses, value addition activities, trainings to develop
farmer business capacities will be provided. The whole gamut of interventions along the value chain
will be made, together with linkages with the private sector. These activities will be made within the
context of strengthening capacities of farmers for adaptation tot eh climate change by providing them
technologies and engineering structures as support.

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

8.3.1.1 R EFORM I NITIATIVES

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The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the NMAs, innovations and PPP regime.

Reform Area Reform Initiative

Enhancing sector
productivity and growth
Increasing trade and
income
Strengthening climate
change adaptation
capacities
Promoting innovative technologies for higher yield and increased production
of commodities with emphasis on organic farming
Provision of inputs such as certified seeds, fertilizers
Programs for extension, training and information, education and
communication campaigns
Strengthen seed production units for high-yielding varieties
Promotion of diversification into high value commodities with high-value
adding potentials
Strengthen animal disease surveillance, diagnostic and response system
and improve the existing as well as establish new animal health facilities to
ensure disease free livestock
Access to credit and agricultural insurance to mitigate risks due to climate
change and other events
Increase irrigated area
Provision of post-harvest facilities and technologies, including cold chain
and cold storage facilities, packing and sorting houses
Facilitate value addition techniques, market access, and develop farmer
marketing skills
Strengthen community-based enterprises
Establish functional ICT-based market intelligence system for profitable
trade
Value chain management
Linking with private sector
Suitable plant varieties and livestock breeds adaptable to high temperature
Improved water management practices for moisture conservation
Flooding structures due to increased water from rains and glacier melt
Promote efficiency in water distribution

8.3.1.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Strengthening of Farm Service Centers for 500 500 500 500
supply of inputs, farm machineries, marketing,
credit, and dissemination of technologies
Establishment of certified nurseries 100 100 100 100
Disaster risk preparedness 250 250 250 250

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 Intervention Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Capacity development for SMSEs or 125 125 125 125
community based enterprises
Animal health laboratories for disease 500 500 500 500
surveillance and diagnostics
Programs for flooding structures 125 125 125 125

Credit programs 1,000 1,000 1,000 1,000

Insurance programs focusing on weather based 200 200 200 200

index systems
Enhancing commodity chain (input supply and 1,750 1,750 1,750 1,750
post-harvest facilities)
Laboratory accreditation and inspection for 125 125 125 125
product certification
Distribution and building of postharvest facilities 750 750 750 750
and machineries
Installation of agricultural tube wells 60 60 60 60

8.3.2 FORESTRY, ENVIRONMENT AND NATURAL RESOURCES STRATEGY

Sustainable agriculture is necessary to minimize negative impact on the environment and natural
resources. Conversely, the state of environment and natural resources brings with it both positive and
adverse effect to the agriculture sector. Hence there is a need to consider the interdependent nature
of these sectors. Reforestation and watershed management strategies will be implemented to protect
the agricultural areas in the lowland and valley areas. Biodiversity resources needs to be managed
properly as this is the ultimate source of genetic materials for food and pharmaceuticals. Lastly, the
need for soil and water conservation is paramount considering the effect of changes in temperature.
Engineering solutions will be considered as an adaptation mechanism in this area of concern.

The sector plan outlined here primarily comprises of two key and specific pillars which will help in
achieving the objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

8.3.2.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Reforestation Replanting of trees, shrubs and grasses and increase forest cover through
afforestation and protection involving local communities
Sustainable resource Management of genetic resources, biodiversity and natural resources
use management
Watershed management
Pursue ecosystems approach
Promoting Soil and Construction of disaster and climate resilient irrigation systems and/or
water conservation retrofitting of existing systems

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 Soil conservation systems
Sustainable Wildlife Sustainable Management of Wildlife will be ensured through various innovative
Management and community based initiatives.

8.3.2.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Tree planting program 125 125 125 125
Construction/retrofitting of existing irrigation 250 250 250 250
systems
Strengthening and capacity building of EPA 19 10 28
for enhanced Monitoring of over 300 units
through GIS
Inventory of Industrial Pollution units 17 9.5 28
Establishment of modern technology in 10 2 8 40
brick kilns
Construction of three new EPA complexes at 5 10 20 65
D.I.K, Abbottabad and Swat
Formulation and implementation of a plan of 10 10
action for establishing genetic resources
management and conservation
Formulation and implementation of a natural 10 10
resource management program
Sustainable Wildlife Management 1564.477 667.708 645.168 512.132

8.3.3 INSTITUTIONS, PARTNERSHIPS AND INNOVATION

Strategies for food production and environmental management will not be as effective without
institutions, policies, partnerships and the use of innovations. Policy reforms are crucial as this will
govern and dictate the behavior of the various players in the sectors. These policies need to be in
place, current, relevant and effective so that appropriate regulation can occur and governance will
ensue.

The ultimate sustainability measure for agricultural growth and competitiveness will be the
participation of the private sector. As a starting point, encouraging them to go into partnerships with
the public sector through provision of incentives is a good strategy to explore.

Most importantly, an innovation-driven economy will result to economic growth and development as
the use of technology can result to efficient use of resources, drives down costs and improves profit
conditions.

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The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

8.3.3.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Institutional reforms and
policy agenda
Promotion of public-
private partnerships
Application of innovations
Formulation and enforcement of zoning laws or local land use plans,
particularly protecting agricultural land conversion for other purposes
Formulation and/or revision of Water Act, Irrigation policies, disaster risk
reduction act, forestation laws, seed act, livestock breeding act, fisheries
act,
Policies on disaster preparedness, response and mitigation
Harmonization of local laws with national and international laws and
standards in agriculture and agribusiness
Formulation of standards on biosafety, and truth in labelling, traceability and
certification
Farmer’s association
Adoption of certification standards, particularly for organic and other green
commodities
Provide incentives for private sector participation in the agricultural value
chains such as tax holidays
Investments for water conservation including flood diversion, water
harvesting and storage
Incentives and programs to encourage private sector investments in
agricultural engineering including farm to market roads, and post-harvest
facilities
Improving private sector capacity for agribusiness
Facilitate private sector initiatives for market access, trade information and
linkages with local, national and international trade
Research and development for new varieties and techniques for improved
productivity and increased competitiveness of agricultural products
Extension services, including provision of trainings,
Use of information and communication technology, especially for accessing
markets, disseminating products and input sourcing
Improving research capacity through institution development
Business incubation particularly for green commodities

8.3.3.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

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 Intervention Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Policy review, formulation and advocacy 2 2 2 2
activities for the passage of laws, policies
and guidelines for food security, environment
and climate change
Actions for private sector investment for 5 5 5 5
market awareness, study tours, and trade
fairs
Strengthening institutions for technology 500 500 500 500
generation and dissemination
Capacity building 300 300 300 300
Development of commodity standards 50 50 50 50
production, food safety and trade

Prime Minister’s, Agricultural Emergency Program for next five years.

Project Name Budgetary Share (PKR in Millions) Total

Cost
(PKR in

Baluchistan
Pakhtunkh
Millions)
Federal

Farmer
Khyber
Punjab

Sindh

share
Increase Productivity & Profitability of Crops wa
Productivity Enhancement of 2,470 12,535 2,203 1,386 707 - 19,301
Wheat
Productivity Enhancement of 760 2,048 789 307.87 6.28 - 3,912
Sugarcane
Productivity Enhancement of 1.400 6328 2878 200.80 626.87 - 11,433.50
Rice
National Oilseeds Enhancement 4218.30 3069 2968 261.30 559.20 - 10,176.00
Conserve & Increase Productivity of Water
Conserving water through lining 56,466 18,499 28,648 9,653 26,125 40,314 179,705
watercourses.
Enhancing command area of 10,731 1,781 3,454 432 4,666 6,736 27,800
small and mini dams in Barani
areas
Water Conservation in Barani 4,166 - - 6,250 - 2,606 13020
areas of Khyber Pakhtunkhwa
Harness Untapped Potential of Fisheries
Shrimp farming. 1453 2090 1300 - - 4842.78
Cage fish culture. 697 3725 1300 1,135 - 6856.87
Trout farming in northern areas 1519.83 - - 772 - 2291.97
of Pakistan
Livestock Projects
Save the Calf Program 572 1239 946 676 - - 3433.00

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 Project Name Budgetary Share (PKR in Millions) Total
Cost
(PKR in

Baluchistan
Pakhtunkh
Millions)

Federal

Farmer
Khyber
Punjab

Sindh

share
wa
Buffalo calf fattening program 318.73 600 483 364 146 - 1911.73
Backyard poultry program 68.50 139.13 40.50 81.00 81.85 - 329.13

Projects approved for Public Sector Development Programme for 2019-20 are listed below:

Intervention Cost Estimates (PKR in millions)

Total Provincial Federal Former
Share Share Share
National program for Improvement of Water 19,587 9147 5640 4800
Courses in Pakistan Phase II
Water conservation in Barani areas of 13,074 6,846 3,906 2,322
Khyber Pakhtunkhwa
National Programme for Enhancement of 2,738 1,421 898 420
Command Area of Small and Mini Dams in
Barani area
Wheat Productivity Enhancement Project in 2,195 878 480 837
Khyber Pakhtunkhwa
Productivity Enhancement of Rice in 330 173 76 81
Potential Areas of Khyber Pakhtunkhwa
National Oil Seed Crop Enhancement 514 305 193 16
Program in Khyber Pakhtunkhwa
Productivity Enhancement in Sugarcane in 421 254 103 64
Khyber Pakhtunkhwa
Poverty Alleviation through development of 835 548 137 150
Rural Poultry in Khyber Pakhtunkhwa
Save the Calf program in Khyber 1,554 1,243 311 0
Pakhtunkhwa
Federal Fattening Program in Khyber 827 661 505 0
Pakhtunkhwa
Development of Cold Water Fisheries in 1,261 757 505 0
Khyber Pakhtunkhwa

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9. THEMATIC AREA 7: NARROW THE TRUST GAP BETWEEN
CITIZENS AND STATE THROUGH PEACE BUILDING, RULE OF
LAW, TRANSPARENCY AND ACCOUNTABILITY

Given the peculiar situation stemming from the womb of the war on terror, the province has
come out of a prolonged conflict and now stabilizing. In such an environment of fragility, it is
important that the trust between state and the citizens is restored and strengthened.

Strengthening the citizen-state contract and sustaining peace has therefore been given much
attention in national and provincial policies and also gets traction in the Sustainable
Development Goals (Goal # 16). Both the manifesto of the ruling party and the 100 Days
Plan envisage strengthening of governance through reforms in rule of law sector.

9.1 OVERVIEW

The incidences of militancy in Khyber Pakhtunkhwa have remarkably improved after the
formulation and
implementation of
1262
Incidences of Casualities in Khyber
National Action
Plan 2015. A Pakhtunkhwa due to militancy
number of law LEA's
enforcing agents Killed
860
and civilians died
and injured due to 523 LEA's
Injured
militancy in the 516
province during 469
291
Civilians
2013. However, 339 Killed
295 266
133 152
the situation has 119
198 139 133 74 43
considerably 210 37 Civilians
107 100 71 83 18
64 54 17 Injured
improved as the 15
2013 2014 2015 2016 2017 2018 2019
incidents of
militancy have substantially declined afterwards as depicted in the graph. Criminal activities
in the province during the last three years remained at par though specific instances may
have shown some abrupt behavior. The judicial system has been railing with huge backlogs
of cases. According to the LJCP, there is a backlog of 29, 270 cases at the High Courts of
Khyber Pakhtunkhwa. One reason for the high backlog is in the number of cases registered

122 | P a g e
every year which is growing around 10%126 annually. The conviction rate in recent years has
improved. Rule of law in the province has improved and is better than other provinces.127

In order to reduce the burden on judiciary, the provincial government is working on the
creation of Mediation Commission. The idea behind the Commission is to expeditiously settle
disputes according to the social mores prevalent in the province within the bounds of law. It
will be introduced after the provincial assembly approves the Khyber Pakhtunkhwa
Regulation of Mediation, 2019, bill. Also, the Chief Secretary’s office is working on
strengthening the provincial Anti-Corruption Department.

Goal 16.10 of the SDG recommends public access to information and protection of
fundamental freedoms in accordance with national legislations and international agreements.
The right to information of the citizens was acknowledged in the 18 th amendment by inserting
a new article, 19-A, in the constitution. Khyber Pakhtunkhwa emerged as first province to
promulgate the Right to Information and Right to Services acts which were the key pillars of
the charter of good governance the then government had chalked out at the onset of its
establishment. 13,093 requests for information have been filed by citizens since the
establishment of the RTI Commission out of which more than 90% were responded128. In
2018, the Right to Services Commission received a total of 404,360 applications. Out of
these, 359,045 applicants were provided service within stipulated time which translates into
89% efficiency rate.

The provincial government is working on creating a legal framework for the regulation of
charities. It is also ensuring to make merger of ex-FATA into the province an opportunity for
development and not a disaster.
Challenges
 Post conflict fragile peace building
 Redundancies and obsoleteness in the criminal
justice system
 Huge backlog of pending cases
 Capacity and human resource issues in judiciary,
police, prosecution, and other arms of criminal
justice system
 Absence of robust coordination mechanism among
the agents of justice system i.e. judiciary, policing,
prosecution, and prisons etc. both at the provincial
and the district levels
 Overcrowding and violation of human rights in
prisons
 Extension of judiciary, police, and prosecution to
the NMAs
 Seamless transition of levies and khasadar forces
Opportunities
 Reformed police act 2017 providing a strong legal
framework for efficient and independent policing
force
 A police service with high moral of independence
and being appreciated and praised across the
country
 Improved law and order situation lessoning the
burden on law enforcement agencies, judiciary,
and prosecution
 Renewed commitment of stakeholders for
reforms in the judicial system and doing away
with the backlog
 Commitment to the NAP framework for combating
terrorism has been refreshed
 Mainstreaming of FATA to recover it from conflict
and terrorism and to establish the rule of law

126 Home & Tribal Affairs Department, Khyber Pakhtunkhwa

127 PILDAT provincial rule of law index 2016 puts Khyber Pakhtunkhwa at the top slot among provinces
128 RTI Act and the RTI Commission was ranked at 1 st position with all provinces and federal government in

competition in the PILDAT Score Card (survey conducted in 2016)

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 Challenges Opportunities
into police service  Enhanced availability of finances for extending
 Establishment of physical infrastructure for law and improving ROL institutions in the NMAs
enforcement agencies and judiciary in the NMAs through ten year development plan

9.2 STRATEGY
9.2.1 OBJECTIVES

Sector
Peshawar High Court
Home Department, Police,
Prisons, Prosecution,
Reclamation & Probation,
Public Safety Commission
Objective
1: To reduce backlog of cases through focus on dispensing quality justice
2: Reducing incidence of major crimes while strengthening transparency
and accountability in police through community voice for improved and
judicious security
3. Reducing burden on judiciary through the introduction of Mediation
Commission
4: Enhanced rehabilitation of prisoners, probationers and parolees and
reduced recidivism
5: Secured, well-maintained, and adequately accommodative jails
providing conducive environment for behavioral corrections of prisoners

6: Improved prosecution and investigation services

7: Traffic management and safer road use
Right to Information 8: Improved government accountability through access to public
Commission, Right to information and service delivery
Service Commission

9.2.2 MILESTONES

Milestones Baseline Yearly Targets

2019-20 2020-21 2021-22 2022-23
Reduction in the pending cases (by 203,003 152,500 122,000 110,000. 101500
50% by 2023)
Increase strength of investigation 5% 6% 8% 10%
officers to 10% of the total
workforce (only SIs and ASIs)
Increase the number of female 100% 150% 200% 300% 400%
police officers by 4x
Training of police annually 18,000
Police Station Based budgets 50% 70% 90% 100%
prepared and ensuring use of
annual policing plans by all districts
Completion of under construction 0 1 2 2 3
prisons

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 Milestones Baseline Yearly Targets
2019-20 2020-21 2021-22 2022-23
Increase in number of Parolees, 3,000 3,300 3,600 3,900 4,000
Probationers, and Social
Investigation Reports
To establish Human Rights Cells, 05 HRC 11 ADR 11 ADR 12 ADR
ADR Centres, and Judicial Centres, 02 Centres, Centres, 03 Centres, 09
Complexes PHC 01 Judicial Judicial Judicial
Benches, Complex Complex, Complexes
01 Judicial 01 Judicial , 04 Tehsil
Complex Academy, Complex
05 Tehsil
Complex
Establishment of fully functional 12129 25 28 32 32
public safety commissions
throughout the province
Fully functional regional complaints 0130 3 7 - -
authorities throughout the province
Reduce average case load for 48 40 32 25 20
investigative officer
Complete buildings for 07 02 04 07
Specialized Police Schools
Fully functional Safe City Project 0 1 1.5 1.75 2
Establish Forensic Labs in Khyber 2 02 Fully equipped state-of-the-art forensic labs
Pakhtunkhwa
Increase the amount of information 40 50 60 70 80
gained through PIOs
Decrease the amount of 60 50 40 30 20
information gained through
complaints to RTIC

9.3 SECTORAL PLANS

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of the objectives and milestones of this thematic area over the period of SDS. These
include i) reforms initiatives; and ii) costed projects.

R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

129 Khyber Pakhtunkhwa Police Act, 2017, is challenged in the Peshawar High Court. All progress is dependent
on the court’s decision.
130 Khyber Pakhtunkhwa Police Act, 2017, is challenged in the Peshawar High Court. All progress is dependent

on the court’s decision.

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 Reform Area Reform Initiative
Institutional and Khyber Pakhtunkhwa Mediation Bill
Legal Reforms
Implementation of Judges Performance Policy

Human Rights Cells to be established at Circuit Benches Level

Alternative Dispute Resolution (ADR) Centres to be established at District level

Secretariat for District Judiciary to be made fully functional

Propose Amendments in Criminal Procedure Code and Civil Procedure Code

DCJCCs131 to be made fully functional and effective

Setting up of Minor Cases Courts in each district

Creation of special benches in the High Court and designated courts to dispose of
particular categories of cases in a speedy manner

Extension of Legal Aid services for the assistance of people who can’t afford
access to justice
Thorough review of the categories of offences to significantly reduce the incidence of
arrest for minor offences

Establishment of Medico-Legal Directorate at Home Department

Strengthening of Khyber Pakhtunkhwa Police Investigation Branch

Financial Management Reforms in Khyber Pakhtunkhwa Police

Establishment of Model Police Stations

Recruiting and posting more women police officials at general police stations

Move from reactive to preventive and proactive policing, as per annual police plans

Enhance operational specialization within police by constituting a Security and

Protection Unit, strengthening the Investigation Branch, capacity-building of Counter
Terrorism Department and Special Branch
Constructive engagement of Police with media and civil society

Changes in the service structure for the creation of the office of the Prosecutor
General
Protection programmes for witnesses, judges, and prosecutors

Engagement of Youth, especially students of seminaries, in cultural and sports

activities
Review of Prison Act & Rules

131 District Criminal Justice Coordination Committees

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 Reform Area Reform Initiative
Enactment of Khyber Pakhtunkhwa Witness Protection Act
Amend Civil Procedures, Limitation Act, Special Relief Act, Preemption Laws, Letters
and Administration and Succession Certification, Land Acquisition Act, Land Revenue
Act, Rent Laws and Contract Act, Service Laws etc.
Framing of Khyber Pakhtunkhwa Borstal Rules, 2013

Commissioning of Khyber Pakhtunkhwa Prisons Staff Academy - Haripur

Installation of Model Interview Rooms in District Jails

Improvement in health facilities for prisons and disposal of solid/wastes of hospitals

Installation of CCTV system with control rooms and power back up

Procurement of arms, ammunition, and security equipment

Application and monitoring of comprehensive correctional policy

Establishment of Model Probation Offices

Khyber Pakhtunkhwa Human Rights (Amendment) Act, 2019

Regularize School of Tactics and School of IT to enable training of 1,600 officers per
year
Legislation and implementation of Khyber Pakhtunkhwa Government Litigation (Civil)
Bill, 2019
Reforms in NMA Seamless transition of Levies into Police

Establishment of 7 District Judicial Complexes and 25 Tehsil Judicial Complexes

Establishment of RTSC field offices in the 7 districts

Extension of KPIC’s services by the nomination and training of Public Information

Officers (PIOs) in all the NMAs
Functioning of the Human Rights Directorate in all the NMAs

Construction of 7 Prisons at the NMAs’ headquarters

Amendment in Criminal Procedure Code and Civil Procedure Code

Innovation in Automation of Courts

governance and
service delivery Digitize central crime record office and launch e-ticketing

Institutional Capacity Building of KPJA132

132 Khyber Pakhtunkhwa Judicial Academy

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 Reform Area Reform Initiative
Establishment of Model Police Stations

Installation of CCTV in investigation rooms, reporting rooms and lock-ups

Improvement in office infrastructure
Establishment of Model Probation Offices

Extension and upgrade of Prisons Management & Information System

Prosecution Case Management & Monitoring System

Private Public Investment in Prisons Industries

Partnership
Employment for Probationers and Parolees through Corporate Social Responsibility

Establishment of learning institutions for the prisoners through Corporate Social

Responsibility

Certification of labs for forensics

C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

9.3.1 JUDICIARY

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Infrastructure Development 3,318 3,551 3,827 3,616
Infrastructure Development in NMAs 6,786 9,331 5,908 -

Active Regulatory Regime established in District 20 14 11 11

Judiciary
Active Inspection Regime established in District 56 82 87 92
Judiciary
Active and Efficient Human Resource System 84 112 100 102
Established
Access provided to Fundamental Rights and 7 20 21 21
Mass Awareness Created

Enhancing Capacity of Khyber Pakhtunkhwa 83 54 50 51

Judicial Academy
Establishment of ADR Centers 2 127 193 629

Establishment of HRC at Circuit Benches 24.725 20.35 20.35 20.35

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9.3.2 POLICE

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Financial Management Reforms in Khyber 170 180 180 170
Pakhtunkhwa Police

Increase overall police strength with a minimum 8,000 12,000 16,000 20,000
of 10% every year
Improvement in Office Infrastructure 125 125 125 75

Recruitment and posting of more women police 250 250 250 250
at police stations
Institutionalize and improve the quality of 240 230 240 230
training imparted by the specialized training
schools and gradually increase the training
budget of Police
Improvement of Processes and Functions in 200 300 400 500
Investigations
Improve urban policing through Safe City 8,000 10,000 8,000 4,000
Projects in the major cities and specialized
training for officers serving in urban centers

Enhance operational specialization within police 1,000 1,000 1,000 1,000

by constituting a Security and Protection Unit,
capacity-building of Counter Terrorism
Department and Special Branch

9.3.3 PRISON

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23

Capacity building of Prison Staff 12 13 13 12
Improved Prison Facilities for Women and 71 60 60 60
Juveniles
Improving the initial and continuing training of 60 60 65 45
IoP personnel
Construction of Prison 1,000 1,200 1,500 1,600

Skills development and technical training 160 125 125 100

programmes for prisoners and establishment of
prison industries
Educational opportunities to prisoners 25 25 25 25

Improve living conditions in prisons (sewage, 100 100 100 100

heating, water filtration & chillers)
Feasibility study of transport of prisoners by 10
prisons department

9.3.4 PROSECUTION

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 Intervention Cost Estimates (PKR in millions)
2019-20 2020-21 2021-22 2022-23
Develop and Operationalize Case Management
30 40 25 -
and Monitoring System (CMMS)
Establish a Khyber Pakhtunkhwa Training
Academy and develop a training program
300 - - -
through the Khyber Pakhtunkhwa JA in the
interim
Improvement in Office Infrastructure –
Construction of Integrated facilities in 11 150 100 100 100
Districts

9.3.5 DIRECTORATE OF RECLAMATION AND PROBATION

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Establish model probation offices and provision
of transport and telephone facilities to all -
120 120 120
probation officers

Improve the service structure of DRP

45 45 45 45

9.3.6 HOME

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Pakistan Action to Counter Terrorism (PACT)
with special reference to Khyber Pakhtunkhwa 100 100 100 -
through UNODC
Strengthening Rule of Law Project (SRLP) 70 70 60 -
Establishment of Law Reforms Cell at Home &
Tribal Affairs Department.(Rule of Law Road - 25 25 -
map)
Establishment of Forensic Science Laboratory
(FSL) at Peshawar (UNDP Assisted). - 1000 1000 1000
Establishment of Forensics and Medico-legal
50 40 - -
Directorate.(Rule of Law Road map)

9.3.7 HUMAN RIGHTS DIRECTORATE

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23

Directorate of Human Rights and its districts 50 60 73 -
based resource centers with integrated facilities
for public prosecutors, government pleaders,
and probation officers

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 10. THEMATIC AREA 8: ADEQUATE WATER FOR
AGRICULTURAL AND DOMESTIC USES

Water is an essential prerequisite for all forms of life. Nevertheless, a continuously increasing
population, unregulated urbanization and climate change are placing unprecedented strains on the
province’s receding water resources. Ensuring water availability is, therefore, imperative for food
security, economic uplift, employment generation and sustaining living standards.

Ensuring long-term sustainable use of water for agricultural and domestic uses requires judicious
management of surface and ground water resources of the province. From amongst government
departments, Irrigation Department, Agriculture Department, Public Health Engineering Department
(PHED) and Local Government Elections and Rural Development (LGE&RD) Department are
responsible for planning and regulating use of the province’s water resources. While PHED and
LGE&RD are mandated with water supply and sanitation functions, supplying water for agricultural
uses is the mandate of Irrigation Department. Sustainable Development Goals (SDGs), National
Water Policy 2018, Khyber Pakhtunkhwa Drinking Water Policy 2015, Khyber Pakhtunkhwa
Sanitation Policy, and Khyber Pakhtunkhwa Climate Change Policy 2018 offer policy frameworks for
the development, operation and conservation of the province’s water resource and ancillary systems.

United Nations’ Sustainable Development Goals provide an overarching international policy

framework with regard to sustainable use of earth’s resources and for ensuring universal access to
basic human rights. SDGs envision that by 2030, member states will achieve universal and equitable
access to safe and affordable drinking water, access to adequate and equitable sanitation for all,
improved water quality, increased water-use efficiency across sectors, and will adopt integrated
approach towards management of water resources133.

Consistent with the National Drinking Water Policy 2009134, National Environmental Policy 2005 and
the overarching SDG targets, the provincial government developed a provincial Drinking Water Policy
2015 which recognizes safe drinking water as a basic human right and undertakes to spend 10% of
the ADP to provided clean drinking water to the public. Ensuring water security is one of the key policy
objectives of Khyber Pakhtunkhwa Climate Change Policy 2018. The draft Khyber Pakhtunkhwa
Sanitation Policy envisions provision of reliable solid-waste management, wastewater disposal and
treatment facilities to a progressively increasing population base.

In Khyber Pakhtunkhwa, surface water is found in the form of springs, precipitation, lakes, streams,
rivers and glaciers. Ground water is found as aquifers and alluvial deposits. The available water
resource is used for the dual purpose of irrigating agricultural land and domestic use such as drinking
and sanitation.

133SDG 6
134National Water Policy recognizes the emerging water crisis and lays down a broad policy framework and
sets up principals for water security on the basis of which the provincial Governments can formulate the
respective master plans and projects for water conservation, water development and water management.
National Water policy recognizes the need to ensure that water sector receives at least 10% of the Federal
PSDP allocation in 2018-19 and progressively increasing it to 20% by 2030 and envisages corresponding
increases in water sector allocations in provincial budgets

131 | P a g e
10.1 OVERVIEW
Khyber Pakhtunkhwa has a total area of 18.40 million acre of which only 37% is cultivable. Despite
having a reasonably elaborate irrigation infrastructure, only 34 % of the province’s total cultivable
area is irrigated. Furthermore, Khyber Pakhtunkhwa is unable to use 32 % of its water share under
the Water Apportionment Accord 1991 due to non-availability of corresponding water storage
infrastructure.135

Pakistan’s current storage capacity is hardly 10% of inflows against the world average of 40%. The
problem of water shortage is further compounded by outdated irrigation practices, which resulted in
sub-optimal use of water resources. Water for irrigation purposes is getting polluted due to reckless
disposal of municipal and industrial waste in irrigation channels. This hazardous waste becomes part
of food chain through consumption of waste-laden irrigation water by crops which is precipitating in
health complications for people of the province.

Pakistan has, over the years, become a water-stressed country. Pakistan’s per capita water
availability has undergone an 82 % decrease over the last seven decades – from 5,260 cubic meter
in 1951 to 940 cubic meter in 2016. Like, the rest of the country, Khyber Pakhtunkhwa’s water
resources are also under stress due to a
geometric increase in its population, Provincial Irrigation Infrastructure
urbanization and the adverse impact of S.N
Description Unit Data
climate change. This climate change o
impact is also affecting availability of water Gravity Flow
1 numbers 84
for irrigation purposes. Effects of this Irrigation Schemes
shortage are expected to become more Lift Irrigation
4 numbers 45
pronounced with time. With agriculture Schemes
being a dominant contributor to provincial 5 Storage Dams numbers 31
GDP, upgradation of irrigation 6 Tube Wells numbers 962
infrastructure for conservation, storage and 7 Surface Drains kilometer 2,818
optimized use of available water resources 8 Sub Surface Drains kilometer 2,045
has become imperative.
Flood Protection
9 embankment & kilometer 405
Khyber Pakhtunkhwa’s irrigation
Spurs
infrastructure consists of 3,482 km of
canals with a culturable command area of 1,471 million acres. A total of 31 dams, having a storage
capacity of 0.28 MAF, feed a command area of 298,939 acres.

Irrigation, water supply and sanitation services are not financially self-sustaining and therefore require
significant provincial government subsidies on yearly basis. Unchecked urbanization and
development of townships in fertile irrigated lands remain another concern which has caused a
decline in Culturable Command Areas (CCA). Intense floods in the recent past have exacted an
enormous toll on the provincial economy in the form of loss to human lives, livestock, property and
agricultural produce. Existing flood protection infrastructure has proved insufficient for controlling
heavy floods resulting from climate change phenomenon.

135
Khyber Pakhtunkhwa only utilizes 5.97 MAF of its share of 8.78 MAF

132 | P a g e
Existing and planned trans-boundary developments on western rivers are a source of further concern
from irrigation perspective. "Indus Basin Replacement Works" (dams in particular) are approaching
the end of their design life due to siltation. Depletion and quality deterioration of groundwater coupled
with lack of awareness in general public about the impending threat of water scarcity is resulting in
unchecked wastage of sweet water. Sub-optimal use of irrigation water is further exacerbating the
scarcity of irrigation water.
In conformity with the vision of Sustainable Development Goals, Government of Khyber Pakhtunkhwa
envisions providing universal access to safe drinking water and sanitations services by 2030. In this
respect, PHED is already providing potable water and sanitation services to approximately half of the
rural population. Allocation-Expenditure trend for PHED during the last five years is presented below.

PHED: Allocation - Expenditure Trend (million rupees)

8,000
Amount (million rupees)

7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
2013-14 2014-15 2015-16 2016-17 2017-18
Allocation 3,261 5,851 7,362 4,213 5,160
Expenditure 1,454 6,075 5,548 5,670 4,020

Whereas water remains a fundamental, indispensable necessity for human life, it is evident that
allocations to PHED over the last five years have been inconsistent and out of step with demands
imposed by a fast increasing population.

PHED’s ADP spending on key functional areas during the last five years is presented in the following
figure.

Comparative Investments in Last Five Years

Sanitation Services 20%

Rehabilitation of Existing Schemes 30%

New Water Supply Schemes 50%

0% 10% 20% 30% 40% 50% 60%

133 | P a g e
The Government of Khyber Pakhtunkhwa is faced with the challenge of providing safe drinking water
to a population that is increasing at an exponential rate. Past and projected population growth data
are detailed as follows.

Khyber Pakhtunkhwa Population Growth Trend (million)

50.00
41.44
40.00 34.12
29.18
30.00 25.12 25.84

20.00 15.09

10.00

-
1998 2017 2018 2022 2026 2030

Present population coverage with respect to provision of water supply services is depicted in the
following figure.

Water Supply: Population Coverage

Unserved Population 46%

Served Population 54%

Total Population 100%

0% 20% 40% 60% 80% 100% 120%

In addition to launching of new schemes, PHED is also maintaining a sizeable portfolio of water supply
schemes in rural areas of the province. Outcomes of a recent study on water supply and sanitation
schemes in the province are presented below.

Condition of Existing Water Supply Schemes

Operational Schemes 4,389

Design Life Completed: Pumps 2,501

Design Life Completed: Distribution Systems 1,717

Non-Operational Schemes 1,064

Damaged Storage Tanks 472

- 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000

134 | P a g e
The above figure suggests that 24% of water supply schemes are non-operational due to paucity of
funds. Moreover, 2,501 pumps and 1,717 distribution systems have completed their design life, which
means they also need to be replaced to ensure continued extension of services in areas served by
the respective systems. On the other hand, recovery rates are very low. During 2017-18, an amount
of Rs 205.4 million was recovered under water supply charges by PHED. Reduced water rates (Rs
120 per month for domestic pumping schemes and Rs 60 per month for gravity schemes) along with
weak enforcement are the main reasons for low recovery. Recovery from operational water supply
schemes is only 8% of operational expenditures. The following table pertaining to revenue and
expenditures of functional water supply schemes duly depicts this imbalance.

Expenditure Recovery per

Recovered per functional functional
Number of Revenue Current Expenditure on scheme scheme
Functional water (PKR in functional schemes (Amount in (Amount in
supply schemes Million) (PKR in Million) PKR) PKR)
4,389 205.4 2,485 566,172 46,799

Access to clean drinking water and safe sanitation practices are primary public health determinants
having direct bearing on health outcomes. Incidence of waterborne diseases such as diarrhea,
typhoid, hepatitis etc. is high in Khyber Pakhtunkhwa. Water and sanitation services providers have
found it difficult to keep pace with the demands of a fast increasing population. A large number of
water supply schemes are dysfunctional and require major rehabilitation works and up gradations.

Challenges Opportunities

• Huge financing requirement for funding the Master
Plan of PHED Department that is envisaged to be
necessary for meeting the infrastructure
requirement. of the total funding requirement of
PKR 171 Billion, PKR 41 Billion are required
during the period of SDS (2018-2023)
• The province is deficient on irrigation
infrastructure. Khyber Pakhtunkhwa is not able to
utilize 2.81 MAF of its water share under the
Water Apportionment Accord 1991 due to lack of
required infrastructure. Cultivable wasteland
constitutes 66% of the total cultivable area.
• The province has inadequate flood control
infrastructure. There is no flood warning /
forecasting system in place.
• Sub-optimal use of water due to outdated
irrigation practices is adversely affecting
agricultural output.
• Subsidized water supply and sanitation services
are resulting in fiscal imbalance. Revenue from
water rates is not sufficient to recover operational
costs of water supply and irrigation schemes.
• Per capita water availability is declining at an
alarming rate. Annual per capita availability in
Pakistan has recede below 1000 cubic meter,
making it a water stressed country.136
• There is a premium on enhancing the capacity of
water storage and distribution infrastructure. The
unutilized share of 2.81 MAF of water allocated to
Khyber Pakhtunkhwa under the Water
Apportionment Accord 1991 provides an incentive
to invest in irrigation infrastructure.
• Sufficient landmass is availability for cultivation.
Which can significantly increase province’s
agricultural output. Due to lack of infrastructure,
only 2.277 million acres (34%) of the total
culturable landmass of 6.720 million acres can be
irrigated. In terms of size, the province’s non-
irrigated land constitutes 200 % of the irrigated
land. Availability of such massive land mass for
irrigation purposes presents a good opportunity for
promoting well-being of the province’s people.
• Modern irrigation techniques optimizing water
usage. Agricultural output can be increased
manifolds by replacing the prevailing flood
irrigation method with more innovate methods
such as drip irrigation and other modern irrigation
practices. Switching to the innovative mode should
then be incentivized through awareness
campaigns and soft loans for covering transition
costs.
• Rationalization/withdrawal of the irrigation and
domestic water subsidies can make the public

136Average per capita availability is projected to go down to 575 cubic meter by 2050

135 | P a g e
 Challenges
• Increased extraction of groundwater is resulting in
depletion of groundwater and increased salinity.
Lack of engineering solutions to address this
problem is a further compounding factor.
• Contamination of water bodies and distribution
systems poses a major threat to human life and
food chain. Contaminated ground and surface
water is a primary reason for prevalence of water
borne diseases. A combination of adequate
funding, legislation, water quality testing and strict
enforcement is needed for protection against use
of contaminated water for domestic and irrigation
purposes.
• Low level of public awareness on efficient use of
water for domestic, agricultural and industrial
purposes. Sensitizing masses about sustainable
use of this precious water resource is a major
challenge for bringing about a behavioral change.
• Climate Change and its impacts on water
resources pose a formidable challenge for the
Government of Khyber Pakhtunkhwa which
essentially has an agro-based economy.
According to a recent IMF report, Pakistan ranks
3rd in the world among countries facing acute
water shortage. Reports by the United Nations
Development Program (UNDP) and Pakistan
Council of Research in Water Resources
(PCRWR) have warned that Pakistan will reach
absolute water scarcity by 2025. PCRWR
reported that Pakistan touched the water-stress
line in 1990 and crossed the water-scarcity line in
2005. According to PCRWR, if this situation
persists, Pakistan is likely to face an acute water
shortage or drought-like situation in the near
future.
• Coping measures may include upgradation of the
province’s flood control infrastructure and
commissioning of early warning / flood forecasting
systems.
• The provinces lacks financial resources for testing
and developing innovative water management
approaches and methodologies.
10.2 STRATEGY
10.2.1 OBJECTIVES
Sector Objective
Public Health Engineering 1: Improve quality of life for common man through provisioning of clean
(water & Sanitation) drinking water and safe sanitation practices in a sustainable manner
2: Improve the regulatory regime and make public infrastructure sustainable
Irrigation 3: Improve water resource management contributing to enhanced income
from agricultural land by mitigating water scarcity
136 | P a g e
Opportunities
infrastructure sustainable. Progressive elimination
of water subsidies through water metering,
introduction of use-based charges in lieu of fixed
charges and fine-tuning of the tariff structure will
help the government preserve the marginal value
of water being used.
• Qualitative improvement in irrigation and domestic
use water presents an opportunity for significantly
reducing disease prevalence in the province.
Considering that government hospitals and
healthcare units offer subsidized treatment, high
disease prevalence inflates the size of health
subsidies. Investment in improving water quality, in
addition to promoting general well-being of the
population, also presents an opportunity for
creating fiscal space for the provincial government
by reducing instances of subsidized treatment.
• The volume of solid waste generated in urban
centers makes it feasible for being used for power
generation.
• Systems automation provides an opportunity to
minimize human input in assessment and
collection of user charges and improving efficiency
in revenue collections. At present, revenue
assessment and collection take place in a
disaggregated manner resulting in transparency
issues, low collection efficiencies and weak
analysis capacities.
• Alternative financing modes present an opportunity
to complement provincial government finances
The provincial government will need to explore
more innovative sources of project finance such as
Public Private Partnership (PPP) and China
Pakistan Economic Corridor (CPEC) to materialize
early fruition of available opportunities
 4: Improve efficiency of irrigation water usage

10.2.2 MILESTONES

Irrigation

Milestones Baseline 2019-20 2020-21 2021-22 2022-23

Number of dams 19 21 23 26 30
Total irrigated area (million acres) 2.27 2.28 2.29 2.32 2.50
Length of Flood Protection 350 375 380 385 390
Works/Structures (km)
Revenue Receipts (Abiana + Other 350 360 370 380 400
sources) (PKR in millions)

Public Health Engineering

Milestones Baseline Yearly Targets

2019-20 2020-21 2021-22 2022-23

Population with access to clean 17.766 18.195 18.681 19.167 19.797
drinking water (in millions)

Number of new water supply 5851 143 162 162 210

schemes
Number of existing water supply 498 240 230 270 165
schemes to be upgraded

Number of new Water Quality 8 existing 2 mobile 2 mobile 2 mobile 2 mobile

Testing Laboratories water water water water
quality lab quality lab quality lab quality lab

Number of new Solarized Water 442 100 120 170 82

Supply Schemes
Population with access to sanitation 0.625 0.45 0.445 0.515 0.7
facilities (in millions)

Number of new sanitation schemes 250 180 178 206 280

Determination of sustainable 0 1
groundwater potential through
independent third party survey
Power generation from solid waste N/A To be determined after feasibility study
(MW)

10.3 SECTOR PLANS

10.3.1 IRRIGATION

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

137 | P a g e
10.3.1.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Institutional and Legal
Reforms
Innovation in governance
and service delivery
Implementation of National Water Policy 2018.
Enabling the province to utilize allocated its full share as per Water
Apportionment Accord 1991
Approximately 300000 acres additional area to be brought under irrigation
Water conservation through construction of new small dams &
management of existing water resources
Awareness regarding water conservation
Elimination of obsolete and overlapping of laws
Construction of flood management structures
Improved water sector planning through robust and oversight mechanism
Improved performance of human resources
Enhanced revenue receipts
Determination of sustainable ground water potential

10.3.1.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Cost Estimates (PKR in millions)

Intervention
2019-20 2020-21 2021-22 2022-23
Completion of 176 ongoing schemes under
16000 17000 17500 15060
ADP 2018-19
Increase Command Area through
3880 4605 4125 2390
construction of irrigation projects
CRBC Lift-cum-Gravity Project , DIK 10465 10465 10465 10605
Construction of Small Dams 3000 4000 4000 5000
Construction of 3 sub-surface dams 500 500 1000 1000
Implementation of National Flood
3000 3000 3000 3500
Protection Plan (NFPP-IV) Phase-I
Installation of Telemetry System 150 150 100 0
Consultancy for restructuring of the
Department by creation of specialized 50 75 100 100
wings
Consultancy to review and modernize all
10 10 10 0
water related statutes
Mass media campaign for creating public
12 12 12 14
awareness regarding water conservation
GIS mapping of command area and
cropped area for assessment of revenue.
60 100 40 0
Hiring of consultancy services for software
development and collection of taxes

138 | P a g e
 Cost Estimates (PKR in millions)
Intervention
2019-20 2020-21 2021-22 2022-23
Hiring of consultancy firm for assessing
100 100 100 0
ground water quality &quantity

10.3.2 PUBLIC HEALTH ENGINEERING

The sector plan outlined here primarily comprises of two key and specific pillars which will help in the
achievement of objectives and milestones of this thematic area over the period of SDS. These include
i) reforms initiatives; and ii) costed projects.

10.3.2.1 R EFORM I NITIATIVES

The reforms initiatives given below spell out the sector specific initiatives covering actions pertaining
to legislation, policy, institutional reforms, the merged districts, innovations and PPP regime.

Reform Area Reform Initiative

Institutional and Legal
Reform
Innovation for improved
governance and service
delivery
Reforms in NMA
Innovation in governance
and service delivery
Enforcement of PHED Drinking Water Policy 2015
Approval of PHED Khyber Pakhtunkhwa Sanitation Policy
Revision and alignment of Provincial Drinking water policy with SDGs
Improve outreach to water users through efficient complaint redressal
system
Amendments in 1985 Drinking Water Supply Schemes Act.
Development & approval of updated WASH service delivery standards
(rural and urban utilities) for primary (PHED & LG/&RDD) and secondary
service providers
E-Bidding
E-Billing
GIS of infrastructure
E-Governance through MIS
Preparation and implementation of SoPs, guidelines and technical training
manual on Climate Change and Disaster Risk Reduction followed by
capacity building of key officials of primary and secondary service providers
Rehabilitation of existing schemes
Construction and Solarization of new schemes
Restructuring & Strengthening of human / logistic resources
E-Bidding, E-Billing, MIS/GIS
Behavior Change Strategy for economizing water usage
Updation of specifications, Market Rate System etc.
Revenue / water charges collection system improvement through easy
paisa etc.
Review and rollout of Water Sanitation and Hygiene Behavior Change
Strategy for up scaling of interventions

139 | P a g e
 Establishment of complaint/ citizen facilitation centers
Institutional capacity assessment of PHED

10.3.2.2 C OSTED P ROJECTS

As a second pillar of the sector plan the costed projects present an indicative investment portfolio
over the period of the SDS which covers soft reforms as well as infrastructure development projects
pertaining to infrastructure development and asset creation.

Intervention Cost Estimates (PKR in millions)

2019-20 2020-21 2021-22 2022-23
Water supply services interventions 2860 3240 3250 4218

Sanitation services interventions 894 890 1030 1406

Rehabilitation of Existing Water 600 590 684 422

Supply scheme/Non-functional
schemes

Solarization of existing water supply 600 730 1030 492

scheme

Power generation from solid waste 0 0 0 0

Capacity Building, Water 46 50 56 62

Conversation, CLTS, Water Quality &
Sector Reform Unit, E-Governance

140 | P a g e
 11. THEMATIC AREA 9: CROSS CUTTING

A few of the functional areas in the public sector cross cut all specialized areas of public policy and
service delivery administration. These cross cutting functions are at the center stage of governance
and public policy implementation. They either deal with the regulatory regime such as Finance,
Planning and Development and Revenue or they may be dealing with vulnerabilities and affirmative
action approaches in areas such as gender, social protection and social welfare.

11.1 ENHANCED FISCAL SPACE

11.1.1 OVERVIEW

Ensuring creating fiscal space for development cannot be overemphasized. SDS approaches the
solution in two different ways: (1) Enhancing the fiscal space through revenue mobilization efforts and
expenditure management – the customary approach, and; (2) Leveraging private sector’s investment
for financing social and economic sectors. While, the chapter on ‘Resources for the Strategy’
discusses in detail the former approach, the Public Private mode of financing is discussed below.

Public Private Partnerships (PPP) are considered to be an effective way to narrow the gap between
demand and supply of social and growth related infrastructure. It also ensures the required
investment in the public sector and secure more effective public resource management. If pursued
successfully, PPP has the potential to deliver the ‘triple win’, meaning delivering benefits to user,
governments and the private sector. Enhancing efficiency by reducing the cost and time overruns is
beneficial to users and governments and better quality of services is expected via the PPPs. Coupled
with the policies and institutional environments these PPP can become catalysts for economic growth.

Attaining sustainable economic growth can be accelerated through private sector involvement both
in social and economic sectors. The Government of Khyber Pakhtunkhwa is strongly committed to
explore Public Investment opportunities via PPP in the province. Key sectors and industries of Khyber
Pakhtunkhwa province are Oil and gas; Hydropower; Tourism; Minerals; Trade and logistics;
Agriculture and Livestock; Infrastructure/Transport; information and communication technology;
Economic zones development; and Human Capital which have the potential to attract PPP
modality137.

Challenges
 Heavy reliance on federal fiscal transfers & Low
level of provincial own receipts
 Heavy expenditure on pay, pension and
repayment of provincial debt
 Heavy expenditure on strengthening of law &
order apparatus
 Lower socio economic indicators
 Requirements of huge funds for strengthening of
judiciary
 Requirements of local government system
Opportunities
 Reforms in existing taxation regime
 PFM Reforms Strategy implementation
 More focus on expenditure management
 Rationalization of the throw-forward in public
sector investment
 Capacity building of tax enforcement arm
 Provincial resource mobilization strategy to
enhance fiscal space
 The PPP Act and establishment of PPP Unit in
P&D Department

137
Khyber Pakhtunkhwa Investment Policy

141 | P a g e
  Irregular and intermittent payment of net hydel  Khyber-Pakhtunkhwa revamped investment
profit strategy to attract PPP modality
 Requirement of huge funds for development of
hydel and oil & gas resources

11.1.2 STRATEGY

Objectives

Focus Area Objective

Enhanced fiscal space 1. Enlarging the provincial own source revenue, curtailing the non-
development expenditure and predictable realization of NHP
2. Attracting private sector participation in public investment

Milestones

Yearly Targets Mean of

Milestones Baseline
2019-20 2020-21 2021-22 2022-23 verification

PPP Policy Continuous Continuous

Framework review of review of Policy
PPP Law, Sector
, Improved PPP Law PPP Law Approval,
Strengthening PPP specific
PPP Law and Policy and Policy Approved
Regulatory and Committee, PPP
in the in the in the amendments
Institutional PPP Unit, 9 Strategies
context of context of context of from
Mechanism for PPPs PPP Nodes for 4 PPP
ease of latest latest provincial
established Nodes
doing developme developme assembly
business nts. nts
Enhanced
Enhanced Enhanced understand
understand understand ing of all
ing of all ing of 4 key Apex
Apex apex Committee
Committee Committee members Training &
Orientation members members through Exposure
Training, through through an disseminati Visit
APMG disseminati exposure on of Reports,
certification on of visit, 6 resource no. of
Capacity Building
, Exposure resource staff at material, Publications
Visit to material, 6 PPP Unit, Enhanced shared with
Sindh PPP staff at Enhanced skills of 6 Apex
Unit PPP Unit, skills of 2 staff at committee
2 staff at staff at PPP Unit, members
each PPP each PPP 2 staff at
node (in node (in each PPP
total 4 new 4 node (in
nodes), nodes), total 4
nodes)
Projects
Inventory of Projects
approval
under Public-Private NIL 2 4 6 6
from Apex
Partnerships
committee
Roadshows,
Investment NIL 1 2 2 2
Conferences, etc.

142 | P a g e
The Government of Khyber Pakhtunkhwa’s investment policy provides a comprehensive framework
to provide a conducive business environment to attract local as well as foreign investors. The strategy
for improving PPP is based on five pillars i.e.: Robust legislative framework, effective institutional
framework, capacity development, PPP projects and pipelines and marketing, promotional and
communication.

Cost estimates for the PPP programme for Khyber-Pakhtunkhwa (2019-2023)

(All amount in PKR in

Millions)
Budget Heads Funded by
Gover
Consu nment
Infrastru
ltancy of
Workshops/ cture
Traini Oth Khybe Unfunde
Conferences/ Financin Total GPP
ngs ers r d
Roadshows g
Pakht
Support
unkhw
a
Robust Legal 0.50
& Regulatory 3.00 - - - 3.50 - 3.50 -
Framework
Effective 0.30
Institutional 19.50 - - - 19.8 - - 19.80
Framework 0
Capacity 3.00
Building 334.80 40.40 - 0.20 378. 28.20 3.00 347.20
40
PPP Projects 0.50
& Pipelines 11.00 0.50 800.00 - 812. 200.50 3.00 608.50
00
Marketing, 37.00
Promotion and 2.00 - - - 39.0 - 1.00 38.00
Communicatio 0
n

11.2 DEVELOPMENT PLANNING AND INTERNATIONAL ASSISTANCE

11.2.1 OVERVIEW

Planning and Development Department acts as the brain-center of the Provincial Government, being
the policy and decision-making department as well as overseeing the development of the Province.
This department has responded to the development challenges of the Province in varying ways
through formulation of strategic policies encompassing viable and balance solutions for inclusive and
integrated growth.

The regulatory framework for the P&DD is provided by the Projects Manual, the Annual ADP
Guidelines and other related policies of the provincial and federal governments. P&DD has carried
out a number of reforms in the realm of development planning and has been at the forefront of using

143 | P a g e
technology as a tool to make its systems more effective and robust. To name a few P&DD has
established a well manned and equipped resource center housing

Project Management Information System which has all the development investments automated
coupled with a detailed GIS infrastructure. This has now been added by the new technology tools like
FORESEE and District Projects Management System.

Given the increased load of ever expanding projects, enhanced inflow of forcing aid (more loans now
than grants) and venturing into initiatives like the CPEC and BRT the P&DD now needs to gloss over
seriously its institutional and physical infrastructure and capacities. There is a need to improve
capacities to make planning more needs and evidence based, effective and also to provide for
strategic platform for research, policy planning than to be a clearing house for development projects.
There has been a number of studies and reports on the restructuring and reengineering of the
business processes of planning and development which demonstrate that a serious reform and
strengthening exercise is to be undertaken. The PFM Reform Strategy approved by the Cabinet,
Public Investments Management (PIM) and the Ten-Year governance plan of the government of
Khyber Pakhtunkhwa identifies a number of reforms to be initiated by the P&DD to harshness its
institutional strengthening.

In line with the principles of alignment, harmonization and use of country system of international
assistance outlined in the international aid architecture such as Paris Declaration, Accra Action and
HLF4 etc. the government is providing a home grown a development agenda, a medium term strategy
wherein the ownership primarily rests with the government and development partners’ synchronies
their initiatives accordingly. The provincial government intends to have a positive growth trajectory by
channeling funds through province’s systems and ensuring the enhanced predictability of the budget
support.

The foreign aid portfolio presents a picture of fragmented and proliferated projects across sectors and
areas with a systemic problems in terms of project design, implementation, impact assessment and
especially slow disbursements. These issues become more serious when the development partners
are extending foreign aid in the shape of loans where the impact assessment is skewed, cost over-
runs are high, disbursements are slow, and the loan aid turns into a debt burden. The recent trajectory
of increasing foreign loans from the multi-lateral and bi-lateral donors warrants a sustainable and
robust strategy / policy for foreign aid with a special focus on loans.

To enhance the real value of international assistance, the government will develop a partnership
framework for development partners to align their interventions and programmes with the strategic
priorities of the government and to incorporate in their country strategy in line with the provincial
strategy.

Challenges
 Ever heavy throw forward posing a planning and
budgeting problem.
 Depleting finical resources for investment in
development projects.
 Inclusion of erstwhile FATA in Khyber
Pakhtunkhwa taxing the capacities of P&DD.
 Increased foreign aid especially loan component
putting management burden on the staff.
Opportunities
 New government with a commitment to change and
continuation of policies.
 Support of the federal government in the shape of the
same ruling party at federal and provincial levels.
 Availability of increased TA and capacity building
funds from development partners.
 Formulation of Comprehensive Development
Partnership Framework

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  Unpredictable foreign assistance
 Accounting and reporting of Foreign
disbursement
 Enable donors to use country systems for
disbursing foreign aid
 Increased resources available as 3% of NFC for
NMAs.
 Improvement in international assistance through
alignment of Country Operational and Business Plan
(COBP) with country system and strategy

11.2.2 STRATEGY

OBJECTIVES

Focus Area Objective

Throw forward 1. Throw forward rationalized and brought down

Institutional strengthening 2. Planning and Development department made more robust and
modern
3. Business process for development planning revamped
International Assistance 4. Harmonized international assistance for integrated growth trajectory

Milestones

Yearly Targets Mean of

Milestones Baseline
2019-20 2020-21 2021-22 2022-23 verification

Throw forward
6-7 years 3years 3years 3years 3years ADP Review
rationalization
Implement Implement Implement
Preparatio
Foreign Aid policy ation and ation and ation and
n of draft
review review review
Project Updated
Business process Draft Implement Implement Implement
manual Project
reengineering manual ed ed ed
updated Manual
Institutional
Restructuring of P&DD assessmen Restructuring implemented
t

Number of All the P&D cells combined into a research and

Enhanced capacities
cells development wings

Automation DPMIS District DPMIS

GIS expansion GIS Cell GIS cells established in all districts and departments

Capacity building PhD fellowships for chiefs and assistant chiefs

11.3 GENDER EQUITY

11.3.1 OVERVIEW

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Human capital investments have improved the situation for women in Pakistan in health and
education access, as well as economic and political participation. Still, wide gender gaps remain
within the context of persistent poverty and gender-biased cultural norms. Ending all forms of
discrimination against women and girls is not only a basic human right, but it also crucial to
accelerating sustainable development. It has been proven time and again, that empowering women
and girls has a multiplier effect, and helps drive up economic growth and development across the
board. While some forms of discrimination against women and girls are diminishing, gender inequality
continues to hold women back and deprives them of basic rights and opportunities.

Despite their recognized constitutional, legal and religious rights, the status of women in Pakistan has
not been encouraging. Pakistan ranks at 134 out of 135 countries on Gender Parity Index at the global
level. It ranks 134 on economic participation; 129 on education; 123 on health and survival indicators.
Pakistan made only slight improvement in girls’ enrolment, access to drinking water and reduction in
child mortality. Proportion of women participation in parliament is 22.2 % which is highest in South
Asia and the only global gender indicator on which Pakistan performed well (however, women
representation in Parliament in Pakistan is on reserved seats and they have still not been able to
contest in general elections).

Turning to Khyber Pakhtunkhwa, the trends in gender parity are below the national averages. Khyber
Pakhtunkhwa economic growth has remained at 4.2% between the period of 2001-02 and 2016-17
compared to national economic growth of 4.6%. Women participation in formal labor force is only
14% compared to 22.7 % at the national level. The informal labor sector engages a large number of
women work force wherein agriculture sector employs about 74%, manufacturing sector including
textile and industries employs about 12% and community social and personal services sector employs
another 11.5% of women labor force in Khyber Pakhtunkhwa. Studies further indicate increase in
trend of rural to urban migration as well as out-migration (one quarter of all of Pakistan's workers
abroad are from Khyber Pakhtunkhwa). This has resulted in increase in number of women as
unacknowledged household heads. As per a study report, %age of women headed households in
Khyber Pakhtunkhwa has increased between 4 - 15% over the last few years. However, there are
limited opportunities for employment, entrepreneurship, training and participation in policy making
and political processes. Moreover, gender neutral policies, assessments and resource allocation has
not been able to achieve the desired results138.

Challenges
 Weak institutional mechanisms
 Outdated and discriminatory laws and procedures
 Weak monitoring and social accountability
mechanisms
 Lack of disaggregated data and analysis
 Lack of sector specific targets for women and girls
Opportunities
 Government commitment to promote gender
equality as signatory of SDGs
 Improved legislations for rights and obligations of
services for women and marginalized groups
 Initiatives for strengthening of accountability and
transparency measures (Management information
systems, gender disaggregated reporting,
complaint resolution cells etc.)

11.3.2 STRATEGY

OBJECTIVES
Focus Area Strategic Objectives

138
https://www.pc.gov.pk/uploads/plans/Ch10-Gender-and-women-development1.pdf

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 Gender Equity 1. Improved institutional mechanism to effectively address gender
discrimination and women empowerment issues

MILESTONES

Milestone Baseline Yearly Targets

2019-20 2020-21 2021-22 2022-23
Improved Drafting of bills 2 legislations Amendment draft Formulation Formulation of
legislative completed enacted for Enforcement of of Rules Rules
framework and (prevention Women’s completed for completed for
framework and and protection Ownership Rights Enforcement Prevention of
mechanisms bill 2019, burn tabled in the of Women’s Internal
for policy protection and Assembly Ownership Trafficking in
implementation rehabilitation Rights and Women
in place bill) Christian
Divorce Law
Amendment draft Protection of
Christian Divorce women rights
Law tabled in the Draft ready in informal
Assembly for economy
Prevention of (agriculture)
Internal
Trafficking in
Women and
tabled in the
Assembly
Women Notification of Orientation/capacity Departmental Implementation
empowerment gender development of all action plans started
policy notified mainstreaming relevant developed
committee departments on the based on the
policy policy

Quarterly
committee Quarterly
Quarterly
meetings committee
committee
meetings
meetings
Women and 245 Women 04 new 11 new centers 15 new 15 new centers
destitute Vocational centers centers
people Centers
equipped with functional
market oriented
skills to enable
their economic
stability
Improved Khyber- 23 district 11 district level All district All district level
government Pakhtunkhwa level committees on level committees
responsiveness commission on committees on status of women committees notified and
to reduce status of status of notified notified and functional
violence women notified women Orientation/ functional
against women Appointment of notified capacity Referral Smooth
ombudsperson Notification of development of the mechanism implementation
district level stakeholders in place
focal persons
Living 05 shelter 03 shelter 02 shelter 02 shelter 02 shelter
conditions of homes/Darul homes/Darul homes/Darul Aman homes/ Darul homes/Darul
marginalized Aman in place established

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 Milestone Baseline Yearly Targets
2019-20 2020-21 2021-22 2022-23
and Aman Aman Aman
disadvantaged established established established
group
(especially
women)
improved
Improved PC I Approved Helpline Helpline functional Helpline Helpline
support functional in 6 in 6 districts functional in functional in 7
mechanism in districts 6 districts districts
place
(Helpline for
addressing
women issues)

The intersectional approach to gender and security, and the transformative approaches to gender
training and mainstreaming are to be formulated and implemented at the national level through a set
of policies and affirmative actions. The government of Pakistan and provincial governments have now
expressed a commitment to gender equity and women’s empowerment as a signatory of SDGs. To
this effect, government has set up the provincial commission on status of women, sector and
provincial strategies are geared towards addressing gender issues, policies and budget making
processes are gender sensitive. These positive initiatives provide the foundation for a conducive
environment for pro-women legislations. To make gains toward gender equality and women
empowerment government has planned some key reform initiatives:
• Establishment of MIS system – collection and management of robust gender disaggregated
government data to inform gender sensitive policy and budgeting making process.
• Establishment of Khyber Pakhtunkhwa Commission on the Status of Women Act, 2016
• Khyber Pakhtunkhwa Protection Against Harassment of Women at the Workplace (Amended)
Act, 2018
• Khyber Pakhtunkhwa Domestic Violence against Women (Prevention and Protection) Bill,
2018
• Khyber Pakhtunkhwa Acid and Burn (Prevention and Rehabilitation) Bill, 2019
• Standing Operating Procedures (SOPs) for Working Women Hostels
• Khyber Pakhtunkhwa Protection Policy for Transgender and Intersex Persons
• Women Empowerment Policy 2017

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 12. IMPLEMENTATION MONITORING AND EVALUATION
FRAMEWORK

The SDS implementation and monitoring framework shall utilize the existing structures and business
processing in the line departments, Planning and Development Department, Directorate General
M&E and the GIS of the Resource Centre.

The objectives of the M&E framework are:

 To help provincial government build a mechanism (M&E system) that can be used to measure
the progress against strategic objectives and the milestones of the strategy; and,
 To give policy makers the possibility to evaluate long term changes the strategy will produce
on relevant areas, innovation, access, sustainable resource mobilization etc.

12.1 IMPLEMENTATION FRAME WORK

The SDS implementation framework shall ensure that the SDS identified interventions and initiatives
are made part of the reform initiatives to be funded by the annul development plan. This could be
made possible through a strict systematic approach embedded in the business processes for
development planning starting from the issuance of the ADP Guidelines and Budget Call circular. The
following steps shall be instrumental in ensuring the implementation of the SDS interventions:

Budget Call Circular and ADP Guidelines: ADP guidelines and the Budget Call Circular shall have
clear stipulations that the ADP to be submitted to the P&DD by the line departments shall be in
accordance with the SDS projects and initiatives. The ADP guidelines shall be accompanied by a
checklist / fact sheet for evaluating alignments of new project proposals with the objectives and
milestones of respective thematic area.

Gate Keeper 1: The Chief Planning Officer (CPO) of the line department shall perform as the first
gate keeper to sift the projects on the SDS check list. He shall be responsible to ensure that the ADP
projects being proposed by the department shall be aligned with the initiatives of the SDS in that
sector.

Gate keeper 2: When submitted by the line department the concern chief in the P&DD shall perform
as the second gatekeeper to examine and assess that the ADP is in line with the SDS initiatives for
that year. The Chief shall have a check-list developed for this purpose which shall be attached with
each and every project of the department.

Gate keeper 3: The chief economist in his review of the preparation of the ADP shall make sure that
the projects and schemes are aligned with the objectives, milestones and initiatives of the SDS.

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  Annual Strategy Review to be compiled and
Chief Minister Level presented by P&D

 GIS Cell
P&D Level  DG Monitoring

Departmental Level 

Independent Monitoring Units
CPOs

12.2 RESULTS M ONITORING AND EVALUATION

The oversight mechanism will be established as under:
i) Political level: The strategy will be operationalized through a Comprehensive
Development Partnership Framework. This framework would lead the strategy from a
political perspective and convene bi-annual review session i.e. High-level Dialogue, Apex
committee meetings etc. including international development partners.
ii) Strategic level: The Additional Chief Secretary will convene bi-monthly monitoring
meetings with the administrative secretaries of the relevant departments, who are
responsible for achievement of the strategic objectives and yearly milestones. Relevant
departments will assign focal person/section within each department to coordinate and
perform secretariat functions for progress reporting for these meetings.
iii) SDS tracker: Planning and Development Department shall develop an SDS tracker to
monitor that the SDS milestones, initiatives and objectives are tracked. The tracker shall
be uniform and shall have all the relevant data.

12.3 EVALUATION AND IMPACT ASSESSMENT

The Planning and Development Department will also commission objective and independent
assessments of the Sustainable Development Strategy (SDS) of the province, at least once every
two years. These independent assessments will inform how effectively institutional and systemic
changes have been implemented in the provinces under the strategy. If needed, government will seek
donors’ support for these assessments. The broader parameters of the evaluation would include;
relevance, connectedness, coverage, efficiency/effectiveness and impact.

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 13. NMA: BRIDGING THE DEVELOPMENT LAG

13.1 OVERVIEW
The Government of Khyber Pakhtunkhwa has a strong commitment to the sustained development,
prosperity and well-being of the people of the NMA (NMAs) and intends to carry out an accelerated
development program in order to enhance human potential, generate economic opportunities and
improve livelihoods. These commitments are being given shape in the form of the Tribal Decade Plan,
to address the historic development lag in a time bound manner and provide the citizens living in
these NMAs the same opportunities: political, social and economic as enjoyed by others.

The lag is reflected in development indicators, for example; literacy is 33.3%, whereas the national
figure is 58%, maternal mortality ratio is 395 per 100,000 and infant mortality ratio is 86, while for the
rest of the province it is 275 and 60 respectively, 38.3% of households have flush latrines, whereas
the figure for Pakistan is 71%. Some of these indicators are not only adverse compared with the rest
of Pakistan but also among the worst in the world. The TDS is cognizant of the Sustainable
Development Goals (SDGs) and has a corresponding timeline of 2030 in terms of ambition. Because
of the larger gap between the SDGs ambition and the situation in the MA, investments will need to
be context specific, and implemented effectively and efficiently in order to meet the 10 year objectives.

13.2 STRATEGY
For the NMAs, SDS approaches the medium term development planning on the model adopted in
the TDS which is a long term multi-sectoral strategy specifically for those areas, to be funded from a
special allocation of 3% of a non-fungible resources from the Federal Government through the P&DD
and the line Departments of the Provincial Government. The strategy adopted by the line departments
in the SDS for the rest of the Khyber Pakhtunkhwa will supplement and complement the TDS and
vice versa. The detailed TDS forms part of the SDS as its annexure.

The TDS sets five main themes for development socio-economic progress of the area to bring it at
par with the rest of Pakistan.

13.2.1 PILLAR-1: BUILDING RESPONSIVE AND ACCOUNTABLE INSTITUTIONS

Through investments in government offices and local governments, responsive institutions will be
created to provide the complete range of public services available to people in other parts of Pakistan.

Governance. The merger of these Federally Administered Tribal Areas into the Khyber Pakhtunkhwa
province means that the whole administrative paradigm changes, making governance the central
concern. While local governments will allow the citizens of this area to manage their own institutions,
institutional infrastructure will require government offices and staffing to be put in place as a first step.
Construction of government offices in the area, including the police. Criminal and civil litigation
procedures have been introduced meantime, however for these to operate within the geography of
the Merged Areas, TDS includes commitments to construction of adequate physical infrastructure to
house the judicial courts and associated functions. Police being a provincial subject, while the
restructuring of the Levies and Khasadar forces and amalgamation into the extended police force
continues, TDS will cater to the physical infrastructure required by the police to operate in the Merged

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Areas. While rudimentary judicial lock ups exist in the MA, proper prison will be constructed. Similarly,
proper reclamation and probation structure, and separate jails for juveniles need to be established.
Similarly, land “settlement”, formal land records, and therefore the land titling system does not exist
in most of this region, which painstaking task will be performed in the Merged Areas. All of this will be
accompanied by the procurement and provision of appropriate equipment.

Municipal development. One important priority of development of the Merged Areas is to provide
institutions of local governance where the citizens can decide on the type and level of local services
they want for themselves. A substantial investment will be made in creating 25 TMAs and 702 village
councils.

State offices for services. Provincial Government departments and implementing directorates will
either be moving to this area for the first time or their strength is likely to increase. Most notable
change is institution of police and judiciary services for dispute resolution. To gain from agglomeration
and economies of scale, the offices and residences of officials will be constructed in the form of Admin
Complexes at District Head Quarter and Sub Divisional Head Quarter levels. Other important
interventions in the sector are construction of a prisons, police lines in all 7 districts and 25 police
stations.

13.2.2 PILLAR-2: ENHANCING HUMAN POTENTIAL

Government aims to prioritize investments directed at enhancing human potential. The objective of
these investments is to provide opportunities for acquiring appropriate and adequate sets of skills to
participate in the national and global markets and achieve gainful employment. At the same time, to
enable the residents of the Merged Areas enjoy opportunities of life and participate fully in economic
and social activities health services will be provided. In case, where specific needs arise special
government programmes should be in place to meet those needs, so that people continue to access
opportunities of life and achieve high levels of wellbeing.

Education: Amongst the multiple proposed interventions, TDS gives priority to the primary tier of
education with the logic that improvements in quality and numbers at this level will provide the impetus
that is needed at the subsequent levels of education. Similarly, the other prong of the Strategy in the
education sector is giving priority to girls’ education in order to reduce the gender gap. This will be
done not only by investing in for example girls’ community schools, but also by skewing infrastructure
investments so that girls’ education gets two thirds of these. The policy interventions for college
education are similarly primarily targeted at improvement of quality and at expansion with an
emphasis on reduction of the gaps between make and female participation. In order to enhance
quality, a faculty development programme is proposed to be instituted through scholarships for faculty
members to enhance their qualifications to PhD and MPhil levels. In line with this, a quality assurance
mechanism will be developed within each college to ensure continued maintenance as well as
improvement, and indicators for college performance will be developed.

Health: The major increase in health spending is only one way to see the high priority government
assigns to this sector. TDS aims to address facility functionality rapidly along with instituting outreach
programs to enhance ANC, diagnostics using technology, timely identification of mothers requiring
specialist or SBA care and specialist care. These programmes will adopt innovative approaches to
accelerate addressing the health issues of the vulnerable populations of mothers and infants in the
Merged Areas. Vaccination is another priority where public expenditures will be programmed using

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technology enabled robust monitoring tools to deepen outreach and increase the FIC rapidly to reach
ultimately the required levels of herd immunity.

Drinking water and sanitation: Primary attention will be paid to rehabilitation and augmentation of
existing water supply schemes, including upgrading through installation of solar power. New water
supply projects giving preference to gravity fed systems, and where required solar energy will be used
for pumping water. Low cost sanitation investments will be undertaken, like hygiene awareness
practices campaigns in coordination with Health and Education Departments. Street pavements and
wastewater treatment plants though necessary will not have the same priority.

Social Welfare and Social Protection: The Benazir Income Support Programme cash transfers can
be augmented and enhanced by the provincial government through two options; increase the number
of beneficiaries by relaxing the poverty scorecard scoring upwards, or upwardly adjust the amount of
cash transfers to the current beneficiaries. Similarly, conditional cash transfers for education can be
extended to the NMAs, while the mother and child cash transfer programme run by the federal
government with World Bank resources in the MA can be augmented so that conditional cash transfer
aspect can be expanded in the area.

Youth, Sports and Culture: Planned investments for Youth, Sports and Culture seek to introduce
salubrious activities leading youth to their productive destinies. The interventions planned in the TDS
will promote cultural tourism adding to sources of income for local entrepreneurs and businesses.

Gender: Investments in water supply systems and sanitation will reduce the existing burden of labour
and health, social safety nets will attempt to address the imbalance of effects as well as levels of
poverty, extension of education infrastructure for girls will result in reduction of gender gap in
education, favourably skewed investments in favour of girls will similarly reduce the literacy gap
between men and women. Further specific investments will go towards increased mobility for women,
as well as hubs for accessing social services and information, creation of safe spaces linked to such
hubs and to include medico-legal and psycho-social support services. An awareness campaign
related to the services available for women will need to underpin these efforts.

13.2.3 PILLAR-3: EXPANDING ECONOMIC INFRASTRUCTURE

The Strategy has a major focus on expanding economic infrastructure. This focus aims to create an
armature for private sector investment and development. The key elements of economic
infrastructure are the primary public goods that will lay the foundation of private investment leading
to economic growth. Work on infrastructure will utilize implementation arrangement as suited to the
type of project and maximize value for money and efficiency in implementation.

Connectivity and Roads: Development of Merged Areas is contingent upon connectivity and roads
development. The Merged Areas are best signified in the low road density of 0.26 km per square km
compared to the national average of 0.33. TDS will add 1,800 km of roads to the existing 7,212 km
of road connections. The current road asset estimates include 2,121 km of shingled roads, not
suitable for heavy traffic and require regular and extensive maintenance. Investments under TDS will
add to the roads infrastructure and build high quality assets for public use. These will be made in
blacktopping and road widening projects according to local needs and development of reliable inter-
district linkages. Another area of investments will be construction of bridges.

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Rural Electrification, Transmission, Distribution and Generation: Short term investments will
focus on upgrading and rehabilitating the existing power distribution network, so that in stage one it
becomes capable of delivering the quota allocated to the MA, and meantime segregation of TESCO
and PESCO distribution systems can be contemplated. Since even the allocated quota is not
adequate to satisfy the estimated demand from this region, opportunities will be identified and
invested in to be able to exploit hydroelectric and solar power generation potential.

Water and Irrigation: Proper resource planning requires the establishment of hydro-meteorological
station and installation of river and stream gauges. Major investments are also focused on developing
surface water resources that include storage dams, check dams, construction of major intake and
conveyance channels, lining of water courses and command area development alongside on-farm
water management interventions. Planning will also be done so that over time water charges can also
be introduced in terms of water being a scarce resource.

13.2.4 PILLAR-4: ENHANCING ECONOMIC OPPORTUNITIES

Keeping in view the comparative advantage of the NMA, special programmes will be designed and
implemented to create employment that will increase incomes and broaden economic opportunities
for the residents. Early uptake of interventions will be achieved through context specific project
designs and implementation arrangements. While development will be built on existing social capital
specific to these areas, it will expand roads and opportunities into new vistas of economic
developments. To optimize gains from these projects, iterative planning approach will be adopted to
distil lessons from implementation and channel them into projects and subsequent implementation.

Agriculture: The TDS embodies a wide range of initiatives to develop on-farm incomes to introduce
modern and novel farming techniques that are easy to use and cost effective, increasing per acre
yields. A set of coordinated projects comprising introduction of new technologies for vegetable
production, establishment of orchards, seed production and access to markets will be implemented.
A special programme for high value horticulture will be implemented using innovative introductory
and promotional interventions to add to farm incomes in the areas. Through well designed and context
specific interventions, value addition along the value chain and agro business will be supported.
Another set of interventions to improve soil management, water courses development and land
development will add to productivity and produce positive results for farm incomes.

Livestock, poultry and dairy development: Livestock productivity in MA is mainly constrained due
to scarcity of fodder, poor quality of local animal breeds, poor animal management, disease outbreak
and irregular vaccination programme, poor infrastructure, ill-managed pasture and grazing land, and
absence of active disease surveillance system. Milk is the largest product of livestock sector and
accounts for more than 60% of the total value of livestock produce. Poor storage facilities,
inaccessibility to the market and unhygienic practices limits growth of milk production on commercial
basis. Disease diagnosis laboratories are required, as well as mass vaccination campaigns. Feed lot
fattening programme for large and small ruminants, breed improvement programme, restocking of
high yield animals for milk and meat, and development of dairy and meat hubs are interventions that
will boost production and generate surplus. Upgrading and refurbishment of veterinary
establishments, promotion of livelihood through backyard poultry, and establishment of mobile
veterinary services are also envisaged.

Fisheries Development: The potential of the water storage dams will be harnessed for fish
production. In addition, interventions will be fish stocking and monitoring in water bodies, increasing

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natural fish population in water bodies and adopting new measures to conserve natural fish resources
and overall improvement of aquatic health.

Industries and Enterprise Development: Starting from a low base of industrialization the TDS
affords attention to supply of specific infrastructure as a public good and also due attention is paid to
utilities like power supply, gas supply, water supply and sanitation services, mobile connectivity and
weak road network. It has comparative advantage in certain types of industry like marble. The
organized industrial zones in the shape of Special Economic Zones or Industrial Estates and rapid
improvement of business environment will be priorities in the sector. The initiatives will support
business development through improving access to finance, marketing linkages and business
information. Simultaneously, a number of interventions will be designed with partners especially in
the banking sector for making available financial products.

Accelerated Skills Development: This will require refurbishing the existing technical and vocational
training infrastructure immediately, as well as expanding it over time. It will also require deeper and
closer coordination at both the policy and implementation levels between the Elementary and
Secondary Education Department and the Industries Department so that there is no disconnect in
transition from one system to the other for young people. Industries department will work closely with
National Vocational and Technical Training Commission in recognition of the fact that there are
different disconnects among job market demands and skill providers, industrialists and other
stakeholders, and recommends that a dynamic TVET demand and supply framework is needed for
informing the stakeholders regarding market demands, TVET skills requirements, training facilities
and job placement. In order to give some boost to the income levels in the MA, government will utilize
existing capacity in the area, within the province, as well as nationally, including utilizing private sector
skills training opportunities, by funding in substantial numbers scholarships for youth of the Merged
Area.

Qabail Led Development: Not only is most of the population of the Merged Areas rural in nature, but
also there is considerable variation across the region in terms of terrain, natural resources, human
development indicators and ease of access and communication. This variation will be addressed
through area development efforts, utilizing existing tribal social capital (the jirga) and these efforts will
operate under the overall umbrella of the deputy commissioner but with a district manager in charge.
It will bring together provincial line departments to interface with rural habitation clusters in order to
address on-farm incomes, as well as trainings and skills for off-farm income generation,
supplemented with micro-finance access. Small scale village infrastructure with beneficiary
participation and operation and maintenance responsibility will be part of the area specific programme
and sub programmes. The QLD will be overseen by the same Steering Committee headed by the
Additional Chief Secretary designated for the ADU.

13.2.5 PILLAR-5: INSTITUTING SUSTAINABLE RESOURCE MANAGEMENT

Forestry: Forest, Wildlife and Environmental Management acquire significance as the Merged Areas
have a forest cover of over 19.5%. All of the forest land is under collective (shamilat) ownership and
forests are managed by the local tribes under customary laws. Applying the principles of sustainable
resource management, non-timber forest products will be promoted. Wildlife conservation with
community participation will build on the successful practices in Khyber Pakhtunkhwa. Rangeland
assessment and management along with watershed management will receive due attention. Over

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time, the departmental outreach and forest research will be extended in the Merged Areas to garner
their benefits for local flora.

Mines and Minerals: According to geological studies the NMAs have reserves of marble, copper,
chromite, granite, nephrite, dolomite, gypsum, iron, manganese, limestone, that pass the muster of
economic and technologic feasibility. The development approach for this sector enshrines
development of databases and access infrastructure as public goods to attract private sector
investment. The Government also envisages development of departmental capacities for its
regulatory functions to ensure wellbeing of persons engaged in the mines.

Oil and Gas: The Oil and Gas sector estimates indicate that the Merged Areas have the potential to
produce about 5 times the current production of Khyber Pakhtunkhwa, which is 48,000 barrels per
day or 56 % of national production that is around 86,000 barrels per day. According to another
estimate, it has 20 TCF gas and 2 billion barrels of oil reserves. In order to harness the potential of
subterranean resources, region based interventions have been planned. These build on the work
undertaken for development of these resources. The first three years’ focus is on surveys and
mapping, acquisition of shares in an operating block and harnessing the potential of hydrocarbon
seep sites for commercial use. This is followed up by interventions seeking private sector
participation.

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ANNEX: KEY FINDINGS OF THE REVIEW OF INTEGRATED
DEVELOPMENT STRATEGY AND STRATEGIC DEVLOPMENT
PARTNERSHIP FRAMEWORK

The Strategic Development Partnership Framework (SDPF) was developed by the Government of
Khyber Pakhtunkhwa (KP) for streamlining and improving the government-development partner
interface for enhanced impact and effectives of development assistance. It was in this context that
development of SDPF was followed by finalization of two additional strategic documents: Integrated
Development Strategy (IDS) and Economic Growth Strategy (EGS). The former aimed to align
resource allocation in development budget for target-oriented and quantifiable progress across all
sectors of governance. The latter, on the other hand, was specifically geared towards defining and
facilitating fast track progress in high growth and economic value sectors across the province. As the
SDFP/IDS period has come to a close, a review of the framework and strategy was undertaken for
lesson learning and reflection in future strategy development and implementation processes.

The review team undertook a rigorous literature review of key documents, conducted primary
research interviews with selected stakeholders such as representatives of the government and
international donors and analyzed financial and data as well as information generated through KPI
and M&E system under the framework. A total of 58 individuals were consulted across 16 sectors;
in addition, four (4) sector level consultations were also conducted. Analysis of the administrative
data on the SDPF/IDS KPIs took place, based on the data gathered as part of the secondary and
primary research. A lesson learned workshop was also conducted to inform this review, discuss
findings and devise recommendations. The secondary and primary research enabled the review team
to come up with a succinct situation analysis, presenting key lessons learnt, and recommendations
for improved coordination and accountability between the government and SDPF partners.

Lessons Learnt

Active follow-up and embedding “deeper” ownership for continuity

More active follow-up is warranted on part of the government and donors for effectiveness of any
strategic framework designed for fast track development. In parallel, there is a need for embedding
ownership beyond higher level political leadership and within the concerned departments for
continuity. The review has found that the initial years of SDPF related interventions and KPIs reporting
saw active follow up by Govt. and donor partners. However, there was visible tapering of interest in
the subsequent years on various counts. It became apparent that the government’s political priorities
were emergent in nature during later years leading to mismatch between these and IDS/SDPF
provisions /areas. At the same time, it was observed that donor funding in later years were mostly
based on parallel, sector-level engagement, beyond IDS/SDPF framework for collaboration. Thus,
weak follow-up and somewhat elusive “adherence regime” related to decisions of SCC and other
collaborative decisions on development were witnessed.

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At the same time, frequent transfers amongst government counterparts, specifically those assigned
SDPF/IDS-related tasks, adversely affected institutional understanding and prioritization to the extent
of such departments. This should have been countered by embedding ownership at the operational
(mid-tier) level within the department. However, this did not happen. Consultations revealed that
awareness amongst key officials in departments such as Chief Planning Officers, was limited as these
were found to be less aware of SDPF/IDS framework. Planning Wings in departments are the key
personnel with regard to ADP finalization who should have been fully sensitized to this theme.
Moreover, even where awareness was present, purpose or strategic understanding of the framework
and associated outputs was not clearly and evenly manifest. Thus, with the dwindling follow-up and
discontinuity, ownership of SDPF and IDS at the government level seems to have tapered off over
the latter years.

Addressing SDPF Monitoring Challenges

Active monitoring of SDPF and IDS KPIs was uneven, especially towards later years. This is not
surprising given the lesson learned above, where follow-up of the overall mechanism had seemed to
decrease over time. Departmental role appeared limited to filling in “reporting templates” shared by
P&D, without more meaningful ownership. The inability to report against some of the KPIs reviewed
earlier further demonstrates inadequate monitoring to some extent. Thus, course correction
measures/actions flowing from SCC and HLD appeared less visible due to vagueness of
implementation responsibilities. Active monitoring of KPIs was therefore needed, which can only take
place once there is ownership of the framework and strategy, as noted above.

Strong and embedded SDPF Secretariat

The review found that there was limited capacity and an insufficient structure of the SDPF Secretariat;
this had major implications and contributed to the weaknesses in the follow-up of framework and
strategy including the KPIs. Although a secretariat was formed, it was insufficiently staffed and mainly
performing administrative duties (drafting letters to departments; coordinating meetings etc.). It was
not playing the role of custodian of SDPF/IDS nor undertaking an active follow-up mechanism. This
finding was not new – it was recognized earlier by the donors, and also raised with the government
in the past. A re-structuring was warranted, and even a plan to revamp this structure with specific
roles and responsibilities was proposed. The secretariat clearly fell short of being “institutionally
embedded” within P&D Department to demonstrate ownership and accrue legitimacy to actions and
interventions related to SDPF/IDS regime.

SCC and donor coordination

The initial promise of Sector Coordination Committees waned in several cases. Determining co-chair
of sectors amongst donors proved challenge in terms of sustained interest / ownership across donors.
Mid-way through SDPF/IDS, several donors explicitly or implicitly reverted to coordination at the
sector level, outside of the SDPF/IDS ambit. Discussions with stakeholders revealed that this
mechanism was deemed more efficient, especially where the funding component was high or where
the sector was a priority in the respective donor’s country plan. Furthermore, coordination amongst
the donors itself proved a challenge as (palpably) little efforts were made by donors to compliment
respective Country Support Strategies with SDPF/IDS Priorities. With the tapering of government’s
interest and ownership, donor interest also witnessed a decline.

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Recommendations

 Policy level recommendations are designed based upon the present review and which can be
of immense relevance for the design of a future strategic framework for donor-government
collaboration in the province.
 Duplication and parallel strategies on development may be replaced with a single, holistic
development framework.
 This will be valid and relevant for government as well as for the donors. Multiple strategies
tend to confuse the departments besides delaying the fast track and clearly defined
implementation objectives.
 Political leadership at various levels (province, department, local) may be associated with
formulation process for sustained buy-in during implementation phase.
 This is crucial so that political buy-in for such development strategies is ensured from the very
beginning and hence any future deviation on resource allocation decisions are guarded
against.
 Development Policy and Research Institutions may be associated during design phase for
bringing about academic rigor and technical soundness in the final document.
 Basing the strategic development documents merely on input from government departments
has been seen to lead to problems in terms of realistic target setting which needs to be fully
informed through sector research and empirical evidence regime.
 Grouping of individual departments in “development sectors” may be carried out with equal
emphasis on “potential” as well as “capacity.”
 An arbitrary grouping can frustrate some of the departments who may not see their specific
problems and considerations fully catered for in the design of strategy. This in turn has
adverse implications for smooth implementation.
 Focus of strategic framework may be dominated by “sector outcomes” as against activity-
driven “outputs.”
 This is crucial as government is expected to work at a broader level in simultaneous pursuit
of developmental goals and objectives. A focus on outcomes as against outputs alone can
enrich the outlook of government for an all-encompassing progress.
 Finance Department may be fully associated during design phase for validation of quantitative
assumptions.
 Since Finance department has the most central role in defining the resource envelope besides
leading the process of funds’ release during implementation phase, keeping it fully on board
is absolutely vital for retaining relevance of any such strategy.
 International Development Partners may be requested to contextualize their Country Support
Strategies within provincial development framework.
 If individual country support framework of various donors is not sufficiently geared towards
meeting government expectations, full promise of government-donor collaboration will remain
only partially achieved.
 P&D Department may establish a fully resourced “Strategic Planning Unit” for steering future
Strategy while leaving “EAD-like” role for Foreign Aid Section.
 Given its present work load, foreign aid section alone cannot be expected to fully support roll
out of strategic development framework. It is hence important that just like other sector chiefs,
strategic planning cell within P&D department may also be established with a dedicated head
and technical support capacities.

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  Office of DG Monitoring may be associated from the beginning for mentoring/guiding
individual departments on Strategy monitoring roles.
 This office is the core M&E outfit within provincial government with requisite capacity
wherewithal. Bringing on board M&E directorate with SDPF development process, especially
in KPI development and subsequent monitoring can really add value to the technical
robustness of progress tracking and course correction during implementation phase.
 Sector Coordination Committees may be provided technical support from relevant sections in
P&D Department (health, education, energy, water etc.) for meaningful and rigorous follow up
& course correction.
 During the last SDPF implementation, SCCs were not duly supported by relevant sections
within P&D (energy, health, education, power etc) to the extent which was required.
Associating relevant P&D sections with pertinent SCCs can enhance the quality of discussion
besides ensuring institutional follow up in implementation phase.
 Planning Wings within ADs may be notified as “SDPF / Strategy Hub” for ensuring
sustainability and catering to frequent replacements.
 At present, this role assignment is of vague and diffused nature. It will be beneficial if planning
wings within each department are assigned clear mandates for development and
implementation of SDPF/IDS-like initiatives in the province.

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