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PESHAWAR, June 28: NWFP Finance Minister Farid Rehman on Friday presented the provincial government’s Rs46.8 billion revenue receipts budget for the 2002-03 financial year, showing a projected budgetary deficit of more than Rs3 billion.
The total revenue expenditure has been estimated at over Rs48.56 billion, appearing to be Rs1.796 billion over and above the Rs46.767 billion revenue receipts. In addition to that, Rs1.263 billion deficit has been projected to be accrued as a result of an impending gap between the total current capital receipts and current capital expenditure reflected at Rs850 million and Rs2.113 billion, respectively.
However, in actual fact the budgetary deficit appears to be well over Rs12.9 billion, much greater the Rs3.1 billion deficit reflected by the provincial government in the budget document.
The Rs12.9 billion in-built budgetary deficit would accrue as the government has projected the net hydel profit share of the province for the next financial year at higher side in accordance with the 1990 A.G.N. Kazi formula. But, the budget document clearly shows a likely shortfall of Rs9.9 billion under the head of net hydel profit share, bringing the total budgetary deficit to over Rs12.9 billion.
The budget contains a wide-ranging provincial reforms programme in addition to making public the Provincial Finance Commission award for an interim period of one year, envisaging a formula for the distribution of resources among the district governments. The reform programme could not take off during the outgoing financial year despite the fact that it was contained in the 2001-02 budget.
The budget contains the NWFP government’s structural adjustment programme spanning from the 2002-03 to 2004-05 financial year.
The Rs13.67 billion Annual Development Programme includes a resource gap of Rs7.9 billion which the government plans to bridge through Rs5.4 billion IDA credit and Rs1.89 billion saving and resource mobilization.
According to the revised budgetary estimates for the outgoing financial year, the province has ended up with a total Rs34.1 billion revenue receipts against Rs44.1 billion it had initially estimated to raise during the 2001-02 financial year. The province received Rs6 billion net hydel profit share instead of Rs14.328 billion reflected in the last year’s budget, thus recording a total budgetary deficit of about Rs10 billion.
The Rs46.76 billion revenue receipts for the new financial year appear to be 37 per cent over and above the Rs34.1 billion revenue receipts recorded by the NWFP during the outgoing financial year as per its revised budgetary estimates.
REVENUE RECEIPTS: The current revenue receipts of the province include Rs22.13 billion federal tax assignment and Rs15.904 billion net hydel profit share, effecting an 11pc increase over and above the Rs14.328 billion benchmark set for the outgoing financial year.
Besides, the province would receive a Rs3.898 billion special grant (subvention) from the federal government and Rs1.01 billion additional resources to be provided by Islamabad in line with the decision for transferring 2.5pc of the total proceeds of 15pc General Sales Tax.
The Provincial Own Receipts for the next fiscal have been estimated at Rs3.66 billion, projecting 2pc growth over and above the Rs3.59 billion revised PORs for the outgoing financial year.
Although no new tax or fee has been introduced, the budget envisages to restructure certain taxes and duties, including professional tax, stamp duty, registration fee, etc., during the 2002-03 financial year to improve PORs in an attempt to achieve the daunting task of reducing dependence on the federal/ external transfers.
The province would raise 92.2pc of its total revenue receipts from the federal/external resource and its own PORs would form only 7.8pc of the total annual revenue receipts.
CURRENT EXPENDITURE: Out of the total Rs48.56 billion current revenue expenditure estimates for the 2002-03 fiscal, Rs13.88 billion has been projected for social services, Rs3.62 billion for economic services, Rs3.18 billion for law and order, Rs3.6 billion for the pension bill, over Rs1 billion for general administration, Rs1.5 billion for community services, and over Rs1 billion for GP/Pension fund investment.
A sum of Rs8.679 billion has been projected for debt servicing. The amount specified for debt servicing reflects an increase of Rs440 million against the Rs8.239 billion debt retired during the outgoing financial year.
An amount of Rs1 billion has been projected on account of wheat subsidy for the 2002-03 fiscal of which Rs309 million would be extended as subsidy to procure some 250,000 tons of wheat. The subsidy bill has been reduced in comparison with the outgoing financial year during which a total amount of Rs1.5 billion was spent on extending subsidy.
Over 49pc of the total revenue expenditure during the 2002-03 financial year would be eaten up by consumption expenditure, including Rs17.79 billion provincial government’s establishment charges/salary bill. A sum of Rs1.5 billion has been projected for utilities, Rs4 billion for commodities and services, Rs544 million for repairs and maintenance, and Rs249 million specified for purchase of durable goods.
Of the 48.7pc revenue expenditure budget that would go to the social, economic and community services during the next financial year, education would get Rs10.98 billion, health Rs2.9 billion, public health engineering Rs45 million and agriculture sector would get Rs1.24 billion.
Meanwhile, the NWFP cabinet met at the Governor’s House and approved the provincial budget for the fiscal year 2002-03.
