ISLAMABAD, Sept 7: The centre transferred Rs400 billion to the provinces during the last financial year (2006-07) as share from the federal revenue under the National Finance Commission Award, which was 33 per cent higher than the fiscal year 2005-06.
The government had allocated a total of Rs381 billion in the revised estimates for the budget but the final share to the provinces increased to Rs400 billion as a result of higher revenue collection. As such, the provincial share in the federal divisible pool increased by about Rs19 billion or almost five per cent when compared with revised budget estimates.
The government has estimated the current year’s provincial share in the divisible pool at about Rs492 billion, which is likely to go up at the time of finalisation of federal accounts. The fiscal transfers to the provinces include grants and loans from the federal government.
According to the full provisional data of consolidated federal and provincial budgetary operations released by the ministry of finance, the province of Punjab received Rs191.50 billion during financial year 2006-07 compared with Rs148.55 billion of 2005-06, showing an increase of about 29 per cent. The province is estimated to get Rs236 billion this fiscal year.
The data suggests that the centre transferred about Rs131.30 billion during the financial year ending on June 30, 2007, which was 36 per cent higher than Rs96.30 billion of 2005-06. Sindh is expected to get Rs144 billion under net transfers of the federal divisible pool this year.
The NWFP province was paid about Rs46 billion last financial year, which was 29.6 per cent higher than Rs35.50 billion it got a year earlier. The province is anticipated to be paid Rs56 billion during the current financial year.
The data suggests that Balochistan province received Rs31 billion share of the federal divisible pool last year, which was 54 per cent higher than the Rs20.30 billion it got in 2005-06. As such, Balochistan emerged as the biggest beneficiary in terms of percentage increase in share, followed by Sindh, at 36 per cent.
The share of the NWFP and Punjab in percentage terms stood at 29.60 per cent and 29 per cent. Balochistan’s share, however, is expected to come down to Rs29.60 billion during the current financial year.
The provinces are entitled to get one-sixth of sales tax revenue, which is subsequently transferred by the provinces to district governments and cantonment boards in full.
Under this head, Punjab’s share is 50 per cent, followed by Sindh at 34.85 per cent, the NWFP at 9.93 per cent and Balochistan at 5.22 per cent.
The remainder of the divisible pool is distributed among provinces on the basis of their population. Under this head, Punjab gets the highest share at 57.36 per cent, followed by Sindh at 23.71 per cent, the NWFP at 13.82 per cent and Balochistan at 5.11 per cent.
Moreover, Punjab, Sindh, the NWFP and Balochistan are entitled to get 11 per cent, 21 per cent, 35 per cent and 33 per cent, respectively, out of the Rs31 billion in collections from the provinces.
