PESHAWAR, June 14: The NWFP government in its three-year medium term budgetary framework (MTBF) is anticipating a constant rise in its fiscal deficit.

The gap between revenue receipts and increasing expenditure has been estimated at over Rs8.3bn in the 2002-03 financial year, Rs7.6bn in the 2003-04 financial year and Rs6.6bn in the 2004-05 financial year, according to well placed official sources.

The size of the overall budgetary deficit has been estimated to be greater in the first year, in comparison with the second and third year, because of the termination of Khushhal Pakistan Programme’s funding form the federal resources and increase in the overall expenditure of the government due to implementation of the provincial reforms programme.

Showing extra reliance on the World Bank’s Programmatic Structural Adjustment Credit facility, the MTBF envisages to bridge the gap through this facility.

For the purpose of preparing the MTBF, the current National Finance Commission (NFC) award’s resource distribution formula has been used as baseline, and has set revenue receipts estimates for the next three financial years on account of direct federal transfers, provincial own receipts, capital receipts and the net hydel profit share.

The MTBF envisages considerable increase in the size of development budget every year by effecting decrease in the current expenditure of the province.

The total revenue receipts of the province have been estimated to be around Rs37.9bn in the 2002-03 financial year, Rs41.1bn in the 2003-04 financial year and Rs44.7 bn in the 2004-05 financial year.

Whereas, total expenditure of the province (including development expenses) has been estimated to be over Rs46bn in the 2002-03 financial year, over Rs48 bn in the 2003-04 financial year and over Rs51 bn in the 2004-05 financial year.

To bring down the current expenditure’s ratio to development expenditure out of the total revenue receipts of the province from the existing 74.4 per cent to 25.6 per cent in the 2001-02 financial year to 69.6 per cent to 30.4 per cent in the 2004-05 financial year, the MTBF envisages to increase the volume of development budget with every passing year in its three-year plan.

In this respect, the development expenditure of the province has been estimated at over Rs13bn in the 2002-03 financial year, over Rs14bn in the 2003-04 financial year and over Rs15bn in the 2004-05 financial year.

To increase the provincial own receipts during the next three financial years, the MTBF envisages to record 22 per cent improvement in the provincial government’s revenue from taxes in the 2002-03 financial year, another 5 per cent improvement in the 2003-04 financial year and a further improvement of 5 per cent in the 2004-05 financial year.