KARACHI: The Sindh government is facing a financial crisis because of a delay in release of funds from the federal divisible pool, it emerged on Sunday.

The cabinet is set to take up the issue of the delay in its meeting scheduled for Monday (today).

The Sindh government is supposed to prepare its updated budget of development and non-development outlays for the next nine months of the financial year 2018-19.

Prior to the formation of the caretaker government ahead of the July 25 general elections, the Pakistan Peoples Party-led Sindh government got passed the budget for financial year 2018-19 from the Sindh Assembly with a total outlay of Rs1.44 trillion, including three-month authenticated budget for Rs271.633 million to meet running expenditures of the caretaker set-up until Sept 30.

Chief Minister Syed Murad Ali Shah, who was also the province’s chief executive then, while presenting the 2018-19 budget had mentioned of the hardships faced by the provincial government in budget preparations.

He said that the Sindh government was largely dependent on federal transfers, which constituted 61 per cent of its total revenue. However, he pointed out the unpredictability of the fiscal transfers from the federal government to the provincial government.

According to sources, an amount of Rs140 billion had been outstanding for the last three months from the federal divisible pool. The lack of release, which is due under the National Finance Commission Award, had landed the Sindh government in a severe financial crisis.

Besides, the sources said, the State Bank of Pakistan had also refused to make overpayment from the approved limit of Rs20bn overdraft.

Transfers from the federal government is on top of the agenda since the Sindh government is facing difficulties in updating its nine months budget in the absence of concrete assurances from the Centre for payment of its dues in accordance with the NFC Award.

Published in Dawn, September 3rd, 2018