PESHAWAR, Jan 10: Islamabad has adjusted over Rs40m from the NWFP’s subvention account on the grounds that the province had been made excess payment during the last financial year, senior official sources told Dawn.

Finance division, Islamabad, made a book adjustment of over Rs40m out of the total over Rs1.6bn funds released to the NWFP as special grant/subvention during the first five months of the current financial year, according to the sources.

Adjustment of accounts, said the sources, had been made on the grounds that during the last financial year ended on June 30, 2001, Peshawar had been released subvention funds more than its proportionate share.

The province, according to the NWFP government’s 2001-02 financial year’s budget document, was transferred (by Islamabad) a total of Rs3.827bn funds in the 2000-01 financial year as special grant. Balochistan and the NWFP receive it every year, in line with the 1996-97 National Finance Commission’s recommendations.

Interestingly, the federal government had, initially, projected transferring over Rs4.311bn as subvention to the NWFP during the 2000-01 financial year. However, at the close of that financial year, the province appeared to end up with a total Rs3.827bn subvention — some Rs484m less than the provisional budgetary estimates conveyed to Peshawar before the beginning of the last financial year.

After that the province received Rs484m less than the initially projected subvention funds at the close of the 2000-01 financial year, the NWFP underwent another reduction by over Rs40m under subvention funds already released in the last financial year.

“They (federal authorities),” said the sources, “made book adjustment adopting the stand that the province had been released funds under the subvention greater than its proportional share according to the population”.

In view of the over Rs1.6bn funds released to the province as subvention during the first five months of the current financial year it is expected that the province would not get what it had been promised for the 2001-02 financial year (under subvention).

The provincial government has indicated a projection of Rs4.311bn on account of subvention under its total Rs44bn revenue receipts budget for the 2001-02 financial year.

On proportional basis, said the sources, the province should have received Rs1.79bn as subvention during the first five months of the current financial year as against the Rs1.6bn funds it ended up receiving during that period.

The official sources talked to by this correspondent anticipated that keeping in view the subvention funds transferred to the province during the first five months of the current financial year it was not likely to get anything beyond Rs3.9bn by the close of the fiscal year.