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KIU Face Rs130 Million Annual Financial Loss

KIU Face Rs130 Million Annual Financial Loss.

Karakoram International University (KIU) Gilgit faces an annual financial deficit of Rs130 million due to the transfer of public sector colleges and schools to the Federal Board of Intermediate and Secondary Education (FBISE).

KIU Vice Chancellor Prof Dr Attaullah Shah disclosed this substantial loss during a meeting with Ministry of Kashmir and Gilgit-Baltistan Secretary Affairs, Jawad Rafiq Malik.

The transition, initiated in 2018 to standardize education across Gilgit-Baltistan’s districts, inadvertently plunged KIU into financial crisis.

Previously managing these affiliations, the university saw a sharp decline in revenue, exacerbating financial strain.

Financial challenges led to fee hikes, sparking widespread student protests. Government intervention temporarily halted fee increases, with a promise of a Rs200 million grant to KIU.

During the meeting, Dr Attaullah underscored escalating financial hurdles, highlighting a 135% increase in employee salaries against a mere Rs10 million budget rise from the Higher Education Commission (HEC). This imbalance left the university burdened with an additional Rs700 million.

Despite revenue growth from Rs350 million to Rs750 million over five years, Dr Attaullah stressed the necessity of a Rs200 million grant. He emphasized the university’s pivotal role in providing quality education and research, seeking cooperation to overcome financial challenges.

In KIU’s Annual Report covering July 2022-June 2023, the previous financial year posed numerous challenges, including low government allocations and heightened operational costs attributed to increased employee-related expenses (ERE). The report noted that the absence of financial support from the GB Government compounded these difficulties.

The report outlined a substantial surge in KIU’s operational budget, nearly doubling from Rs755 million in 2018 to a projected Rs1500 million for 2023-24. Notably, employee-related expenses surged from Rs550 million in 2018 to an estimated Rs1150 million in 2024, representing a Rs600 million net increase and exerting significant financial strain on the university.

Despite a rise in HEC allocations from Rs330 million to Rs440 million, KIU still faces a net burden of Rs490 million. Moreover, reduced external exam revenue and net losses from sub-campuses exacerbated financial pressures, resulting in a total added burden of Rs730 million over five years. The university also grapples with a fee default amounting to Rs60 million due to non-payment.

However, amidst these challenges, positive developments were noted in the report. These include a more than doubled student body, surging from 4,200 to 9,500, and a substantial increase in fee revenue from Rs180 million to Rs480 million over five years. Furthermore, notable achievements include a reduction in non-salary expenses from 48% to 28% of the total budget and controlled expenditures across various administrative areas.

As per the report, the forthcoming fiscal year presents even greater challenges for KIU, with expected rises in employee-related expenses stemming from salary and allowance increments mandated by the Federal Government. Amidst a static, if not reduced, HEC allocation of Rs430 million, KIU confronts the formidable task of generating Rs1020 million from internal resources to cover the projected total budget/expenses ranging between Rs1450-1500 million.

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