Federal govt transfers Rs807.5b to four provinces under NFC Award in first quarter

ISLAMABAD  –  Federal government has transferred Rs807.5 billion to the four provinces under National Finance Commission (NFC) Award, which enabled the provinces to generate massive budget surplus in first quarter (July to September) of the current fiscal year.

Federal government has transferred 23 percent of the annual amount in July to September period of the ongoing financial year. The centre was supposed to transfer 25 percent in first quarter. However, despite surpassing its tax collection target, the federal government has not transferred 25 percent of the annual amount in first three months of the present fiscal year. The four provinces would receive Rs3.41 trillion from the centre under the divisible pool in next financial year.

According to data of ministry of finance, provincial governments had received Rs807.5 billion from the federal government under the NFC in July-September period of the year 2021-22. Meanwhile, four provinces had collected taxes of only Rs134.8 billion making the total revenues of the provinces at Rs1077.8 billion. On the other hand, provinces had spent Rs800.9 billion and returned Rs276.9 billion to the federal government to restrict its budget deficit. Provinces are largely depending on federal government share under the NFC award. Under the 7th NFC award, the federal govt is bound to transfer 57.5 percent of the resources to the four provinces. The provincial governments get shares from the federal government under NFC award as per the said formula. Punjab gets 51.74 percent, Sindh 24.55 percent, Khyber-Pakhtunkhwa 14.62pc and Balochistan 9.09 percent.

Punjab province had recorded budget surplus of Rs183.2 billion during July-September period of the ongoing fiscal year. The expenditures were registered at Rs488.8 billion as compared to the revenues of Rs488.8 billion. However, the major chunk of the revenues came from the federal government under divisible pool. The Punjab government had received Rs396.02 billion from the federal government during first quarter of the current fiscal year. Meanwhile, the province had generated only Rs63.4 billion from its own sources.

The province had shown budget surplus of Rs60.3 billion in three months period, as its expenditures were recorded at Rs220.1 billion compared to the revenues of Rs280.4 billion. Sindh government has received Rs207.8 billion from the federal government during July to September period of the year 2021-22. The Sindh government collected Rs60 billion during first quarter of the ongoing fiscal year.

However, the Khyber Pakhtunkhawa has recorded budget deficit of Rs3.18 billion. Expenditures of this province were registered at Rs228.7 billion as compared to the revenues of Rs225.5 billion. The KP’s tax collection was recorded at Rs7.2 billion in first three of the last year. The province has received Rs129 billion from the federal government under NFC during first three months of the current fiscal year.

The Balochistan province had recorded budget surplus of Rs36.6 billion. Balochistan expenditures had remained at Rs46.5 billion as compared to the revenues of Rs83.1 billion. Balochistan’s tax collection was recorded at Rs4.14 billion.

Article source: https://nation.com.pk/14-Nov-2021/federal-govt-transfers-rs807-5b-to-four-provinces-under-nfc-award-in-first-quarter