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ISLAMABAD, Jan 18: The federal government is likely to increase provincial share from the divisible pool up to 50 per cent under the sixth National Finance Commission (NFC) award provided they commit never to seek grants for law and order, devolution and emergency situations, Dawn has learnt.
The provinces have, however, proposed to abolish the Rs20 billion subvention pool provided the distribution of divisible pool is made on a 50:50 basis between the federation and the federating units.
At the same time, the provinces have also demanded the inclusion of another source of income in the divisible pool in the shape of taxation on petroleum products, sources said.
The NFC will formally meet here on Monday to deliberate upon the issues and consider five-year income and expenditure projections submitted by the provinces.
Finance Minister Shaukat Aziz would preside over the meeting and ask the provinces to consider to withdraw their claims over grants in future. The sources said the revenue and expenditure estimates of the provinces, except Sindh, depicted a very uneven increase in expenditures as compared to their revenues.
The annual revenue of Punjab, Sindh, the NWFP and Balochistan has estimated to increase by 66 per cent, 73, 50 and 38, respectively, official data suggests.
However, the expenditure of Punjab, Sindh, the NWFP and Balochistan would rise by 95.5 per cent, 73.5, 72.4 and 96.96, respectively.
PUNJAB:The provincial government has estimated that its expenditure would increase by 95.5 per cent, while its revenues would increase by 66 per cent by the year 2008-09.
The total revenue of Punjab would increase from Rs27 billion in 2003-04 to Rs45 billion by 2008-09. Its tax and non-tax revenue is to increase from Rs16 billion and Rs11 billion to Rs27 billion and Rs18 billion, respectively.
Punjab's expenditure is estimated to touch Rs350 billion in2008-09 including Rs270 billion general expenditure and Rs80 billion development budget.
Its current year expenditure is projected at Rs179 billion, including general and development expenditure of Rs141 billion and Rs38 billion, respectively.
SINDH: It is the only province whose revenue and expenditure would increase by 73 per cent each. Its current year revenue of Rs15 billion includes tax and non-tax revenue of Rs11 billion and Rs4 billion, respectively.
The total revenue of Sindh would rise to Rs26 billion in 2008-09 including tax and non-tax revenue of Rs20 billion and Rs6 billion, respectively.
Sindh's current year expenditure is estimated at Rs121 billion including a development expenditure of Rs13 billion. Its expenditure is projected to go up to Rs210 billion including development expenditure of Rs40 billion.
NWFP: The current year's revenue of the province is Rs4 billion including a tax and non-tax revenue of Rs2 billion each. This would increase to Rs6 billion in 2008-09 including Rs3 billion each of tax and non-tax revenue.
The current year expenditure of the NWFP is Rs58 billion including a development spending of Rs14 billion. The total expenditure of the province would rise to Rs100 billion in 2008- 09 including a development budget of Rs30 billion.
BALOCHISTAN: Its current revenue is Rs1.8 billion including a non-tax revenue of Rs1 billion. The total revenue would go up to Rs2.5 billion including a non-tax revenue of Rs1.5 billion in 2008-09.
The annual expenditure of Balochistan for the year 2003-04 is Rs33 billion which also includes Rs9 billion development budget. Its annual expenditure would increase to Rs65 billion including a development budget of Rs20 billion.
The sources said that the provinces wanted that taxation on petroleum products should be made part of the divisible pool. The federal government collects around Rs45-50 billion every year on account of taxation on petroleum products. The federal government contributes Rs15 billion in the divisible pool to assist the provinces.
Punjab contributes around Rs3.5 billion, followed by Sindh with close to Rs1 billion and remaining by Balochistan and the NWFP. The sources said that the NFC was rather entering into a difficult stage in view of two other areas where a deadlock like situation has already emerged. They include net hydel profit to the NWFP and gas development surcharge (GDS) to Balochistan.
The decision has already been taken to refer the issue of net hydel profit to an arbitration committee. There is strong likelihood that GDS issue would also be resolved through arbitration, an official said.
