PESHAWAR, Jan 8: NWFP’s fiscal plan for the 2001-02 financial year received a setback as a result of shortfall the province recorded in the direct federal transfers during the first five months of the current financial year.

Informed sources told Dawn that before the start of the current financial year, Islamabad had conveyed to the provincial authorities that the NWFP would receive Rs21.725 billion under the direct federal transfers — derived from the Federal Divisible Pool (FDP) — during the 2001-02 financial year.

However, the NWFP, in line with the last two financial years, is not likely to receive from the FDP what it had been promised before the start of the current financial year mainly due to the shortfall in the revenue recorded by the Central Board of Revenue (CBR).

“The shortfall in the CBR’s revenue,” said the Islamabad-based official sources, “has a direct negative impact on the provincial resources.”

The shortfall recorded by the CBR or downward revision of the Board’s annual revenue target means that the provinces would get less than what they had been promised at the time of the budget preparations for the 2001-02 financial year.

According to sources in the NWFP AG Office, the Frontier province received over Rs6 billion under the FDP during the first five months of the current financial year.

In accordance with the NWFP’s fiscal plan for the 2001-02, out of the total Rs21.725 billion release from the FDP the province should have received over Rs9 billion on proportionate basis at the close of the first five months of the current financial year.

However, Islamabad could not release that much amount due to shortfall in the CBR’s revenue.

The impact of shortfall recorded by the CBR was duly passed on to province(s) as a result of which, said the Islamabad-based sources, the NWFP was transferred funds (from the FDP), so far, much less than the amount it should have been transferred in line with the provisional budgetary estimates.

Reduced payments made by Islamabad to Peshawar during the first five months of the current financial year aggravated the financial woes of the provincial government.

Out of the over Rs6 billion amount transferred to the NWFP during the first five months, said the sources, the province received around Rs3 billion in cash whereas the rest of the amount was adjusted (by the Centre) against the NWFP’s multi-billion rupee cash development loan Peshawar owed to pay to Islamabad.

Similarly, said the sources, out of the cash amount provided to the province a sum of over Rs350 million was transferred for its onward disbursement among the District Councils — in place of the abandoned District tax and octroi.