Peshawar: In a strategic move to bolster financial stability, the Khyber Pakhtunkhwa (KP) provincial cabinet has sanctioned the creation of a ‘Debt Management Fund’. This initiative is aimed at managing the province’s increasing debt obligations by leveraging unutilized government treasury balances into low-risk investment instruments.

According to Zameen.Com, the newly approved fund will operate under the guidelines of the Khyber Pakhtunkhwa Public Financial Management Act of 2022, with specific rules set to govern its control and oversight. The primary objective is to generate revenue to counterbalance the mounting debt servicing costs exacerbated by currency depreciation, thereby ensuring long-term fiscal sustainability for the province.

The KP cabinet also outlined additional financial strategies, including policy guidelines for the province’s involvement in the carbon market. This involves allocations from carbon credit sales and imposing a 1% administrative charge to be managed by the Ministry of Climate Change, pending approval from other provincial governments.

Furthermore, the cabinet has passed a resolution to allocate a recurring grant of PKR 1.5 billion for public universities within KP, aiming to alleviate financial strains following a freeze on grants from the Higher Education Commission (HEC) since 2018.