PESHAWAR, May 3: In view of the steep fall in revenue collection by the CBR, the federal government is forced to make reduced payments on account of direct federal transfers to the four provinces, according to official sources.

The Central Board of Revenue’s inability to meet even the third time downward revised target for the current fiscal had apparently forced the government to pass on the impact of the shortfall to the four federating units in accordance with their respective share in the total national population, the sources said.

“Centre is not likely to release what it had originally projected to disburse among the four provinces through direct federal transfers during the current financial year,” said senior government functionaries.

The CBR missed the downward revised target for the first nine months (July-March) of the current financial year by over Rs9.6 billion after its total collections ended up at over Rs269 billion.

In accordance with the international lending agencies conditionalities Islamabad would pass on the impact of revenue shortfall to the federating units, thus making the initially projected direct federal transfers figures least dependent.

Provinces experienced 5 to 10 per cent cut in their respective direct federal transfers during the last four financial years because of continued shortfall in revenue.

The NWFP government, according to senior government functionaries, was expecting to end up with direct federal transfers five per cent less than the amount it had been conveyed by the centre for the current financial year.

Islamabad had projected to release Rs21.724 billion federal transfers to the NWFP during the financial year 2001-02. However, with the increasing gap between the revised revenue target and actual receipts, the NWFP together with the other three provinces, would likely to get less than projected transfers, the sources said.

A point to this effect has also been made on the part of the NWFP government in its policy document submitted recently to a leading international agency. The province, in this way, expects to under go a shortfall of over Rs1 billion under the direct federal transfers for the current financial year.

“Final figure of shortfall may be more than that,” apprehended the official sources.

Reduced payments made by the federal government has resulted in distorting the NWFP budgetary plan for the current financial year, causing major financial complications and forcing the provincial government to opt for expensive borrowings and unplanned cuts in expenditures.

The province, the sources said, was currently experiencing a shortfall of over Rs1.5 billion in direct federal transfers.