Provincial funds blocked to pay debt

Financial difficulties create hurdles in way of flood relief.

ISLAMABAD: In a bid to clear some circular debt, the federal government has withheld Rs20 billion of provinces on account of gas development surcharge, excise duty, general sales tax on services and gas royalty. Of that amount, Rs13 billion was to be released to Sindh and the rest to other provinces.

In a meeting of the fiscal monitoring committee, the four provinces urged the federal government and the ministry of petroleum and natural resources to immediately release the blocked funds and said that none of the ministries should withhold funds collected for the provinces.

Representatives of Sindh informed the committee that the federal government was yet to release Rs9.4 billion that was withheld in fiscal year 2009-10. The province was paid Rs44.436 billion out of its revised payment target of Rs53.749 billion.

Other provinces also urged the federal government to make payments to them under straight transfers agreed in the National Finance Commission award.

The committee was also of the opinion that the delay in fund transfers by the petroleum ministry was creating financial difficulties for the provinces especially in reconstruction and rehabilitation of flood-hit areas.

Published in The Express Tribune, January 7^th, 2011.