LAHORE, June 17: The federal government has told the provinces to fund their annual development programmes (ADPs) for the fiscal year 2002-03 from their own resources, refusing to give them even a paisa for this very purpose under its Public Sector Development Programme (PSDP).
A source involved in the making of Punjab’s development budget for the next financial year told Dawn here on Monday that an allocation of Rs44 billion for the provinces in the Rs134 billion Public Sector Development Programme (PSDP) was nothing but an indicative figure. Even the funds given to the provinces under the Khushal Pakistan Programme would not be coming during the next financial year, the source said.
The federal government had told the provinces to finance their development budgets with the “additionality in revenues generated by enhancement of the GST rate to 15 per cent from 12.5 per cent.
Islamabad had already committed, as stated by Finance Minister Shaukat Aziz in his budget speech for the fiscal year 2002-03, to transfer 2.50 per cent of the entire collection under the General Sales Tax (GST) to the provinces to compensate for their losses incurred as a consequence of withdrawal of octroi and zila tax in 1997. The Punjab hoped to receive additional Rs5-6 billion due to this decision.
“The federal decision means that we (the provinces) would have little funds to finance our development projects. Since funds for the KPP would also not be coming, we’ll have to merge it with our annual development programme (ADP),” the source said.
He pointed out that the “provincial government was also facing resource constraints because of the increase in pays and pensions of its employees and some other nondevelopment expenditure”.
“So, whatever additionality in resources is transferred to the province, its major part will be shifted to the expenditure side, leaving little or nothing for development,” the source said.
The federal budget for the next fiscal has estimated the total sales tax revenue at Rs205.7 billion against the revised estimate of Rs170 billion for the outgoing year. “This means the provinces stand to receive only Rs34.28 billion in place of octroi and zila tax if the target is achieved at all,” the source added. However, the source doubted the ability of the Central Board of Revenue to achieve the target next year as well. “At the end of the year, we would again be listening to the same, old story of enormous snags in the way of achieving the target,” the source said. The PSDP allocates a sum of Rs44 billion to the four provinces with the Punjab getting Rs20.5 billion, Sindh Rs8.9 billion, the NWFP Rs10.1 billion and Balochistan Rs4.5 billion.
“Islamabad never fully funds the provincial projects under the PSDP but it always partially finance them as the Punjab received Rs10 billion during this year,” the source said.
The revised PSDP allocation for the Punjab for year 2001-02 stood at Rs14.6 billion against the estimated amount of Rs14.1 billion, for Sindh Rs4.4 billion against the estimate of Rs5.4 billion, for the NWFP Rs7.2 billion against the estimate of Rs6.8 billion and Rs3 billion for Balochistan against the estimate of Rs3.7 billion.
In addition to their share from the entire GST collection, the provinces would get Rs193.5 billion during the next fiscal from the federal government against the actual transfer of Rs175 billion against the estimated allocation of Rs190 billion for the outgoing year.
Out of this, the Punjab had been allocated Rs97.44 billion against the current year’s revised amount of Rs87.9 billion, Sindh Rs56.455 against Rs50.66 billion, the NWFP Rs22.133 billion against Rs19.787 and Balochistan Rs17.483 billion against Rs16.72 billion.