PESHAWAR, June 18: NWFP budget for financial year 2007-08 may carry a revenue shortfall of over Rs10 billion, instead of Rs5.489 billion as claimed by the provincial government in the budget documents.

Calculations made on the basis of information given in the budgetary proposals reveal that the MMA government had fudged the figures probably to conceal the actual budget deficit by projecting unrealistic estimates.

In his budget speech, Finance Minister Shah Raz Khan had claimed that the deficit would turn into surplus after World Bank’s Development Policy Credit (DPC-II) worth $130 million (Rs7.8 billion) was received, which is due before the closing of the current fiscal year.

The budget estimates, however, clearly negate the government’s claims of converting deficit into surplus. On the contrary, the resource availability shown in budgetary proposals reveals that the revenue shortfall by the end of the current fiscal year will almost be double of what has actually been projected.

The provincial government has projected an amount of Rs8.330 billion, including the World Bank’s Rs7.8 billion credit, as revised estimates of current capital revenue receipts for the current financial year.

Similarly, an amount of Rs5 billion has been projected against the same credit facility for the next financial year. Plugging in the DPC-II figures in the revised estimates means that the government either has consumed or will spend the loan amount, which is yet to be received, before the closing of the current fiscal year.

“If this is the case, then the provincial government will have nothing left of the much-publicised World Bank loan to bridge the revenue shortfall in the next financial year because it has already projected the utilisation of the said amount,” explained a source, who deduced that the projection of Rs5 billion in the same head for next fiscal year may have been made to avoid opposition protests in the ongoing budget session.

The source said the growing budget deficit both in the current and coming fiscal years dominated discussions at the provincial cabinet meeting held hours before the budget announcement at the provincial assembly on Saturday.

The provincial government wanted to reflect minimum budget deficit both in the revised estimates of the current year and projection for the coming financial year. That is why the World Bank’s loan has been shown in the estimates of both fiscal years, explained the source.

A senior financial manager of the NWFP government, when approached for comment, clarified that the projection of Rs5 billion under capital revenue receipts for the next fiscal year on account of DPC-II has been made because the government anticipated that some portion of the revised estimate would be left unspent by June 30 this year, and that would be carried forward in the next fiscal year.

Similarly, he claimed, the provincial government had been given an assurance by the lending agency of another tranche as DPC-III in the next financial year and that would surpass the figures of Rs5 billion.

He, however, could not explain how the government would justify the fiscal deficit of the financial year 2006-07, which stands at over Rs4 billion even after adding the DPC-II amount in the revised capital receipts.