PESHAWAR, March 10: The NWFP government's financial crisis deepened as its budgetary deficit stood around at Rs4 billion at the end of the first seven months of the current financial year, according to official sources.

Budgetary shortfall, according to official sources, rose by about Rs500 million during the seventh month. The shortfall was mainly attributed to non-disbursement of net hydel profit share by Water and Power Development Authority (Wapda) in January.

The province, said the sources, was released about Rs2 billion against its share from the federal divisible pool (FDP) for the seventh month of the current fiscal.

FDP releases against the January share raised the total amount of funds released to the NWFP to about Rs12 billion at the end of the first seven months of the current financial year.

Though the government has projected to raise total annual revenue receipts of Rs51.5 billion for the 2003-04 financial year, in actual it is not likely to net beyond Rs42 billion because it would not get more than Rs6 billion on account of net hydel profit against the projected figure of Rs17.7 billion.

On proportionate basis, according to the sources, the government was supposed to raise about Rs24.5 billion -- out of the likely revenue receipts of Rs42 billion - at the close of the July- January period of the 2003-04 financial year.

However, said the sources, the government could manage to net about Rs20.5 billion during the same period. Shortfall under several heads of receipts, said the sources, had caused strains to the government's current and capital expenditure components of the budget.

The province received Rs3 billion on account of net hydel profit share during the first six months of the fiscal out of the total share of Rs6 billion. Non-disbursement of funds by Wapda caused a shortfall of Rs500m under the head of net profit share on proportionate basis.

"Though Wapda is not bound under any agreement to release the Rs6 billion amount in 12 monthly instalments of Rs500 million each, the provincial government determines revenue shortfall under this head by dividing the total annual share in 12 equal monthly instalments," said the sources.

The government, said these sources, had been receiving net hydel profit funds in 12 monthly instalments of Rs500 million each before military officers were given the reign of Wapda's administration.

In this way, the province recorded revenue shortfall of Rs500 million under this head by the end of the first seven months of the current financial year. In addition to that, cumulative revenue shortfall of about Rs500 million was experienced on account of provincial own receipts.

Whereas, receipts under the heads of royalty on crude oil and royalty of gas remained at the zero level during that period. Disbursements under the two heads could not start because commercial operations of the gas and oil fields established in the NWFP had yet to commence, said the sources.

Similarly, releases to the provincial government under the head of general sales tax on services and on account of 2.5 per cent additional general sales tax also remained considerablylower than the amount the province should have raised by the end of the first seven months of the current financial year.

The government continued to meet its expenditure requirements with quite difficulty because out of the Rs12bn funds released to it from the FDP an amount of over Rs3.5bn was recovered from the federal government, through book adjustments from the monthly releases, against the cash development loan recoverable from the province.

In actual, the province received an amount of slightly over Rs8 billion in terms of cash from the FDP remaining - out of Rs 12 billion - used to repay part of the province's cash development loan.