June 05, 2007	Tuesday	Jamadi-ul-Awwal 19, 1428

ISLAMABAD, June 4: The federal government has asked provinces to prepare their next year budgets on the basis of an estimated Rs927 billion federal divisible pool, it is learnt. Informed sources told Dawn that the centre had earlier indicated two separate size estimates of the federal divisible pool to the provinces, including Rs970 billion and Rs927 billion. However, they have been finally told to prepare their respective budgets for the next year on the basis of Rs927 billion, with the assurance that any increase in overall revenue collection would be adjusted into their shares later.

Meanwhile, an official statement said the centre has released a total of Rs389.7 billion in the first eleven months of the current fiscal year compared to Rs302.2 billion during the same period last year, showing an increase of 28.9 per cent.

Accordingly, the provinces would get a total of about Rs410-420 billion on account of their 46.5 per cent share out of the federal divisible pool, compared with Rs321 billion estimates for the current year. Of this, Punjab’s share would be 57.36 per cent, followed by 23.71 per cent of Sindh and 13.82 per cent and 5.11 per cent to NWFP and Balochistan respectively.

Balochistan, which used to be financially hard pressed over the years, would now be able to get a total of Rs37.9 billion, including its share of divisible pool, straight transfers and subventions. During the current year, Balochistan would be getting about Rs33 billion, including Rs9 billion share in subvention. Its share in subventions would increase to Rs10 billion next year. Balochistan’s share in the federal public sector development programme has also been estimated to increase to 47 billion next year compared to Rs36 billion during the current year.

The sources said the provincial governments have significantly improved their financial management and Balochistan has emerged to be “the best performer”. These sources said the cash-starved province has shown highest revenue growth of more than 20 per cent this year. The province whose revenue stood at Rs1.2 billion two years ago was able to collect Rs2.8 billion during the current year.

For the first time after many decades, Balochistan was able not only to fund its entire public sector development programme but also retired over Rs6 billion debts. This debt retirement provided a saving of Rs1.7 billion to the province. In addition, the province also reduced its overdraft by Rs7 billion from Rs18 billion early this year. Its overdraft now stands at Rs11 billion. These sources said the federal government released another Rs3 billion to Balochistan on account of Gas Development Surcharge (GDS) that had been held back for years because of accounting reconciliation process. The payment of these arrears coupled with two foreign funded programmes – Balochistan Resource Management Programme (BRMP) and Balochistan Devolved Social Sector Programme (BDSSP) – enabled the provincial government to debt swap Rs6 billion, which also provided an additional fiscal space of Rs2 billion.

Moreover, the province also curtailed its recurring expenditure by Rs4.5 billion to Rs33 billion during the current year against budget estimates of Rs37 billion. This was done mainly through non-recruitment of policemen against a number of vacant posts.