ISLAMABAD, May 3: The centre would transfer about Rs321 billion to the provinces during the next fiscal year (2006-07) as their share of the federal divisible pool, about 34 per cent higher than current year’s budgeted estimate of Rs240 billion, it is learnt.
The total size of the net proceeds of the divisible pool has been estimated at about Rs700 bn for the next year, after estimated deductions of collection charges and direct fiscal transfers to the district governments under 2.5 per cent general sales tax in lieu of octroi and zila tax, sources in the finance ministry told Dawn on Wednesday.
The sources said the federal government has conveyed to the provinces the size of their share of net proceeds of the divisible pool for the next year at Rs321 bn and has asked them to prepare their budgets on the basis of these estimates. This does not include project aid to the provinces.
The share of Rs321 bn also includes Rs27 bn subventions to be provided to the provinces. Balochistan would be the highest recipient of the subvention pool with a grant of about Rs9 bn, these sources said.
The sources declined to divulge the province-wise details but said the provinces would get a sizable increase in their shares than last year under the revised national finance commission announced by the president a few months ago.
Balochistan’s share would go up to about Rs32 bn including subventions and share of the general sales tax directly going to the districts, compared with its current year share of about Rs18 bn.
They said the figures have been worked out by the federal and provincial governments during a series of recent meetings of the provincial finance secretaries with federal secretary general and secretary finance. The last meeting of this series took place on Wednesday. The provincial governors and chief ministers also held meetings on the subject with the president and the prime minister in recent weeks.
For the current fiscal year (2005-06), the provincial share out of net proceeds of the FDP was estimated at Rs240 bn, which may slightly go up at the end of the year on the basis actual revenue collection. Net provincial transfers including grants, project aid etc were, however, estimated at Rs315.5 bn in the current fiscal year.
The budget 2004-05 had estimated Rs200.9 bn share to the provinces out of federal divisible pool which was later revised to Rs204.8 bn.
