Provinces receive Rs439b from Centre in July-March

ISLAMABAD: The Centre transferred Rs439 billion from the federal divisible pool to provinces during July-March 2009-10, which is more than two-thirds of total allocation.

Punjab being the most populated province was the largest recipient as it got Rs224 billion, according to official documents.

Punjab’s total share in the divisible pool is Rs334.4 billion under the Distribution of Revenue and Grant-in-Aid Amendment Order of 2006.

The resources are being distributed among the provinces solely on the basis of population. However, distribution from the next financial year will be according to the seventh National Finance Commission Award, which is based on multiple criteria rather than only being based on population.

Total federal divisible pool for the current fiscal year is Rs655.2 billion. Punjab handled its finances badly among all federating units as it ran into a deficit while the other three provinces were in surplus during the first nine months of the fiscal year.

Punjab’s total income stood at Rs266.2 billion while its expenditure was Rs277.2 billion, showing a deficit of Rs11 billion.

It collected only Rs17.8 billion as tax revenue and Rs12.5 billion as non-tax revenue. Punjab borrowed Rs9 billion from banks to finance the deficit, the documents showed.

Sindh, the second most populated province, got Rs131 billion from the Centre, which is more than two-thirds of its total share. Sindh is projected to get Rs194 billion from the federal divisible pool.

Sindh generated a surplus of Rs18.2 billion during the nine months. Its total revenue was Rs165.3 billion while expenditure was worth Rs150.8 billion.

In terms of percentage its revenue collection was better than that of Punjab. It collected a tax revenue of Rs15 billion and non-tax revenue of Rs4.9 billion.

Khyber-Pakhtunkhwa got Rs54.8 billion from the federal divisible pool. Its total share for the current fiscal year is Rs85.4 billion.

The provincial government generated a surplus of Rs21 billion. Its total revenue stood at Rs113.9 billion against spending of Rs92.9 billion during nine months. However, a major chunk of the revenue came through aid and grants.

The centre transferred around Rs29 billion to the Balochistan government, which is 70 per cent of the total annual allocation of Rs41.5 billion for the province.

The provincial government’s finances were in surplus during the period under review. Balochistan’s income was Rs59.3 billion while it spent Rs45.4 billion, earning a surplus of about Rs14 billion, the documents showed.

Published in the Express Tribune, June 2nd, 2010