PESHAWAR, June 8: The outlay of the NWFP government’s new budget is expected to exceed Rs100 billion and the Annual Development Programme (ADP) is likely to be worth more than Rs30 billion which will be a record.
Background interviews with officials suggest that greater inputs from the centre due to the enhanced federal divisible pool, straight transfers and subvention will contribute significantly towards increasing the overall volume of revenue receipts during the fiscal year 2007-08.
During the next year, the province expects fiscal transfers against these accounts to be worth more than Rs65 billion, compared to Rs54.342 billion in the current fiscal year, officials of the finance department said.
Apart from receiving improved fiscal transfers from the federal government, they said, the provincial government would get $130 million from the World Bank in soft loans.
The provincial government will be able to utilise the fiscal space which will be created due to better federal transfers and lending of the World Bank for financing its development activities.
This will serve to lessen the provincial government’s worries regarding financing the huge salary and pension bill that will grow substantially in case of 15 to 20 per cent raise in wages and pensions, according to the officials.
The provincial government, according to them, has yet to come up with a conclusion over the projected receipts on account of the net hydel profits, which is an integral part of the province’s resources.
Some in the bureaucracy project the amount to be Rs6 billion, which the public utility has been paying every year to the province since 1991-92. Some other officials and even members of the provincial cabinet project a figure of Rs26 billion — which is close to the figure decided on by the arbitration tribunal.
Collection target for the Provincial Own Revenue (PoR) — both tax and non-tax — will be Rs5.7 billion, just 10 per cent higher than the estimates for the current fiscal year, said the officials. In view of the forthcoming general elections, the MMA government has decided not to levy any new tax in the budget. Rather, some tax exemptions are on the cards.
NWFP Finance Minister Shah Raz Khan told Dawn that the PoR target in the next financial year would be achieved through reforms in the tax administration and management regimes.
He said: “Land revenue, agriculture income tax and property tax have vital potential that will be exploited for achieving the collection targets in the next financial year.”
The budget would have a record allocation of more than Rs30 billion for the ADP, which would be financed through local, foreign and federal government’s resources, said an official of the planning and development department.
The provincial government has indicated that an amount of Rs21.9 billion will be allocated from the provincial kitty which is almost 38 per cent higher than the allocation for the current fiscal. According to the official, the volume of foreign-funded projects in the next fiscal year is expected to be lower than the estimates for the current budget owing to slow pace of funds utilisation and phasing out of various projects.
The current ADP has a foreign component of Rs7.6 billion, which is likely to dip to about Rs5 billion in the next fiscal. Funding for development activities in the districts will be increased from the existing Rs963 million to Rs1.204 billion.
Likewise, the provincial government will get about Rs3 billion from the federal government for various special programmes. Priority would be given to the ongoing development schemes, the official said, adding that health, education, roads and drinking water projects would get a major chunk.