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| June 16, 2005 | Thursday | Jumadi-ul-Awwal 8, 1426 |
NWFP hopes for Rs8.8bn grant
PESHAWAR, June 15: The NWFP government will receive over Rs8.89 billion in special grants, including Rs3.89 billion subvention in accordance with the existing National Finance Commission (NFC) award, during 2005-06 to bridge a growing gap between its receipts and expenditure, according to official sources. “We have been assured of Rs5 billion special grant by Prime Minister Shaukat Aziz during a recent meeting between him and the chief minister at Islamabad apart from the subvention which the province receives in accordance with the NFC award,” Provincial Finance Minister Sirajul Haq told this reporter.
In reply to a question, he said the size of subvention would be unchanged and the province would get what it had been receiving since the NFC award came into effect in the 1997-98 fiscal.
“We would get Rs3.898 billion as subvention in addition to Rs5 billion,” said the minister.
Official sources pointed out that under the NFC award the annual share of subvention - which is provided to the NWFP and Balochistan to offset their underdevelopment - should be revised every year by applying the prevalent rate of inflation. But in the case of the Frontier province, the sources said, this share had been static as it had been receiving Rs3.89 billion for the past many years.
The provincial government is set to project Rs5 billion revenue receipts for 2005-06 as budgetary grant from the federal government.
The promised amount would be adjusted against the NWFP’s annual share in the new NFC award which is expected to be announced in the next few months though it would be effective from the next fiscal.
The sources said that a commitment to providing Rs5 billion budgetary grant was made by Prime Minister Shaukat Aziz during a recent meeting with NWFP Chief Minister Akram Khan Durrani.
The funds have been promised to help the province meet its growing expenditure requirements on account of increased salary of the government employees. The NWFP will be paying Rs6.5 billion extra in the next fiscal as a result of the raise announced by the federal government for the public sector employees.
The sources said that the centre agreed to provide additional funds to the province only after the chief minister apprised the prime minister about his government’s inability to present the budget because of huge deficit.
The chief minister reportedly informed the premier that the province would be facing a budgetary deficit of over Rs14 billion in 2005-06.
Other sources said the centre had agreed to accept the NWFP government’s demand because it would not be possible for the centre to get the federal budget 2005-06 passed if the NWFP did not present its budget.
“Provincial budget(s) make part of the federal consolidated fund. Therefore, if the NWFP does not present the budget then it causes constitutional ambiguity for the federal government,” said an official source.
Sources said that the prime minister had only made a verbal commitment for additional funds and there was nothing in writing in this regard.
Officials, however, expressed the hope that the commitment would be fulfilled and would not fall short of materializing as was the case with an identical commitment made by the then prime minister Mir Zafarullah Khan Jamali last year.
Mr Jamali, according to the sources, had promised to provide Rs8 billion to the province on account of net hydel profit during 2004-05 instead of Rs6 billion which the NWFP received annually.
However, the commitment remained unfulfilled and the province was given Rs6 billion only in line with the past practice.
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