ISLAMABAD, June 2: The federal government will transfer Rs1.45 trillion to the provinces out of the divisible pool under the 7th National Finance Commission award during the next financial year, against Rs1.20 trillion transferred to them in 2011-12.

According to budget documents, Punjab will get Rs710.29 billion, Sindh Rs373.61 billion, Khyber Pakhtunkhwa Rs241.75 billion and Balochistan Rs133.25 billion.

Transfers against divisible pool taxes will amount to Rs1.30 trillion, straight transfers Rs101.45 billion and GST on services Rs54.45 million.

In his budget speech on Friday, Finance Minister Dr Abdul Hafeez Shaikh said the federal government had to make major adjustments as a result of transferring resources to the provinces at such a large scale in two years.

The share of Balochistan from the divisible pool had been guaranteed at Rs83 billion in 2010-11 which was more than double the actual divisible pool share of 2009-10.

According to revised estimates of 2011-12, the share of Balochistan in divisible pool came to Rs94.963 billion which was based on revenue target of Rs1,952 billion. In case the revenue target does not materialise, the shortfall based on budget estimates of 2011-12 will be met by the federal government from its own resources.

For the first time in the country’s history, multiple indicators were adopted for distribution of provincial share in the divisible pool against the previous awards when population was considered as the sole criterion for distribution of provincial share.

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