q ISLAMABAD, June 3: The centre has drastically curtailed the share of provinces in grants and subventions to Rs10.254 billion in the first nine months of the current fiscal year. It was Rs39.3 billion in the same period last year.

The reduction in share of subventions took place despite the fact that the overall size of subvention pool has to go up every year under the interim National Finance Commission (NFC) award which guaranteed at least Rs27.7 billion subventions to be distributed among the provinces on the basis of poverty rates. As such, the NWFP was to get the highest share of 35 per cent in subvention, followed by Balochistan 33 per cent and Sindh and Punjab 21 per cent and 11 per cent, respectively.

Finance Secretary Tanveer Ali Aghan was not available to explain as to why only one-third of special grants and subventions had been released in the last nine months of the current fiscal year when more than Rs29 billion had been earmarked in the budget and why the size of special grants and subventions to the provinces was brought down? A source, however, said that these transfers were slowed down to reduce federal government’s dependence on costly borrowing.

The centre, however, transferred about Rs300 billion to the provinces in nine months of the current fiscal as their share of net proceeds under the federal divisible pool, including Rs10 billion special grants and loans. This was about 26.5 per cent higher than last year’s Rs237 billion transferred to the provinces, but the size of special grants and subventions in nine months had drastically dropped by more than Rs29 billion to Rs10.254 billion as against Rs39.3 billion in the same period last year, according to official data.

Under the budget estimates, the federal government is to transfer about Rs398 billion to the federating units during the current fiscal year, including Rs29 billion subventions and Rs57 billion straight transfers to local governments against actual transfers of Rs348bn last year.

So far, the centre has transferred Rs137.6 billion to Punjab, including Rs1.6 billion net transfers as special grants in nine months. This was over 28 per cent higher than last year’s Rs107 billion transfers, but transfers under special grants were higher at Rs9.2 billion last year.Sindh received Rs97 billion in nine months of the current fiscal year, including Rs757 million net transfers as special grants. This was about 35 per cent higher than last year’s net transfers of Rs72 billion which included about Rs8.5 billion as grants.

The NWFP got Rs40 billion, including Rs32 billion as share of divisible pool and Rs7.6 billion as grants. This year’s transfers were about 10 per cent higher than last year’s transfers of Rs36.5 billion.

Last year, the NWFP had received Rs15 billion as special grants, almost half of which it received this year.

The centre transferred net proceeds of Rs25.7 billion this year, including a meagre Rs311 million share out of the subvention pool because of over Rs6.5 billion at-source deduction by the federal government on account of loan and interest.