Four provincial governments collectively recorded budget surplus of Rs350.991 billion during FY2022.
ISLAMABAD - Two largest provinces, Punjab and Sindh, have once again failed to utilise their annual budgets that resulted in their massive fiscal surplus in previous fiscal year.
The four provincial governments collectively recorded budget surplus of Rs350.991 billion during FY2022, as their expenditures remained at Rs4.336 trillion as compared to the revenues of Rs4.687 trillion. The government had budgeted provinces to give budget surplus of Rs570 billion during current fiscal year. The provincial governments’ surplus budget showed that they had not utilized their budgets on development activities in the provinces. They received major portion of their revenues from the federal government under the National Finance Commission (NFC) Award. The provinces could use the revenues in development projects, which would help in generating economic activities and employment generation. However, the two largest provinces, Punjab and Sindh, have once again failed to utilize their annual budgets helping the federal government in restricting its budget deficit. According to data of ministry of finance, provincial governments had received Rs3.589 billion from the federal government under the NFC in the year 2021-22. Meanwhile, four provinces had collected taxes of only Rs612.4 billion, provincial non-tax collection was recorded at Rs128.297 billion and federal loans and grants stood at Rs357.676 billion making the total revenues of the provinces at Rs4.687 trillion.
On the other hand, provinces had spent Rs4.336 trillion and returned Rs350.991 billion to the federal government to restrict its budget deficit. The country’s budget deficit – the gap between federal income and expenditures – was recorded at Rs5.3 trillion during the year 2021-22. The government of Pakistan had set the budget deficit target at Rs3.4 trillion (6.3 percent of the GDP) for the current fiscal year. However, it skyrocketed mainly due to the policies of the previous government especially announcing massive subsidy announced by the previous government of PTI on oil products and electricity. Overall, the government had given massive subsidy of Rs1.5 trillion in previous fiscal year.
The federal government had transferred full share to the provinces under NFC as the Federal Board of Revenue (FBR) surpassed its tax collection target by Rs25 billion in previous fiscal year. The Federal Board of Revenue (FBR) had surpassed its annual tax collection target and fetched around Rs6,125 billion for the outgoing fiscal year 2021-22 ending on June 30, 2022. Under the 7th NFC Award, the federal government 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
Punjab province had recorded budget surplus of Rs351.5b during previous fiscal year. The expenditures were registered at Rs1.822tr as compared to the revenues of Rs2.137tr. The major chunk of the revenues came from the federal government under divisible pool. The Punjab government had received Rs1.785 trillion from the federal government during first half of the current fiscal year. Meanwhile, the province had generated only Rs273.6b from its own sources, non-tax collection was recorded at Rs63 billion and federal loans and grants stood at Rs51.6 billion.
Sindh
The province had shown budget surplus of Rs48.786 billion, as it expenditures were recorded at Rs1.197 trillion compared to the revenues of Rs1.246 billion. Sindh government received Rs902.3 billion from the federal government during the year 2021-21. The Sindh government collected Rs268 billion as tax, Rs14.7 billion as non-tax collection and federal loans and grants stood at Rs61.4 billion.
Khyber-Pakhtunkhwa
Contrary to Punjab and Sindh, the KP’s budget was in deficit of Rs49.179 billion. Expenditures of this province were registered at Rs941.6 billion as compared to the revenues of Rs892.4 billion. The KP’s tax collection was recorded at Rs41.773billion in the last year, non-tax collection remained at Rs40 billion and federal loans and grants stood at Rs214.6 billion. The province received Rs595.96 billion from the federal government under NFC during the last fiscal year.
Balochistan
This province had also recorded almost balance budget. Balochistan expenditures had remained at Rs374.89 billion as compared to the revenues of Rs374.73 billion. Balochistan’s tax collection was recorded at Rs7.7 billion, non tax collection at Rs10.573 billion and federal loans and grants stood at Rs30.170 billion. The province received Rs305.068 billion from the federal government under NFC during the last fiscal year.
ISLAMABAD - Two largest provinces, Punjab and Sindh, have once again failed to utilise their annual budgets that resulted in their massive fiscal surplus in previous fiscal year.
The four provincial governments collectively recorded budget surplus of Rs350.991 billion during FY2022, as their expenditures remained at Rs4.336 trillion as compared to the revenues of Rs4.687 trillion. The government had budgeted provinces to give budget surplus of Rs570 billion during current fiscal year. The provincial governments’ surplus budget showed that they had not utilized their budgets on development activities in the provinces. They received major portion of their revenues from the federal government under the National Finance Commission (NFC) Award. The provinces could use the revenues in development projects, which would help in generating economic activities and employment generation. However, the two largest provinces, Punjab and Sindh, have once again failed to utilize their annual budgets helping the federal government in restricting its budget deficit. According to data of ministry of finance, provincial governments had received Rs3.589 billion from the federal government under the NFC in the year 2021-22. Meanwhile, four provinces had collected taxes of only Rs612.4 billion, provincial non-tax collection was recorded at Rs128.297 billion and federal loans and grants stood at Rs357.676 billion making the total revenues of the provinces at Rs4.687 trillion.
On the other hand, provinces had spent Rs4.336 trillion and returned Rs350.991 billion to the federal government to restrict its budget deficit. The country’s budget deficit – the gap between federal income and expenditures – was recorded at Rs5.3 trillion during the year 2021-22. The government of Pakistan had set the budget deficit target at Rs3.4 trillion (6.3 percent of the GDP) for the current fiscal year. However, it skyrocketed mainly due to the policies of the previous government especially announcing massive subsidy announced by the previous government of PTI on oil products and electricity. Overall, the government had given massive subsidy of Rs1.5 trillion in previous fiscal year.
The federal government had transferred full share to the provinces under NFC as the Federal Board of Revenue (FBR) surpassed its tax collection target by Rs25 billion in previous fiscal year. The Federal Board of Revenue (FBR) had surpassed its annual tax collection target and fetched around Rs6,125 billion for the outgoing fiscal year 2021-22 ending on June 30, 2022. Under the 7th NFC Award, the federal government 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
Punjab province had recorded budget surplus of Rs351.5b during previous fiscal year. The expenditures were registered at Rs1.822tr as compared to the revenues of Rs2.137tr. The major chunk of the revenues came from the federal government under divisible pool. The Punjab government had received Rs1.785 trillion from the federal government during first half of the current fiscal year. Meanwhile, the province had generated only Rs273.6b from its own sources, non-tax collection was recorded at Rs63 billion and federal loans and grants stood at Rs51.6 billion.
Sindh
The province had shown budget surplus of Rs48.786 billion, as it expenditures were recorded at Rs1.197 trillion compared to the revenues of Rs1.246 billion. Sindh government received Rs902.3 billion from the federal government during the year 2021-21. The Sindh government collected Rs268 billion as tax, Rs14.7 billion as non-tax collection and federal loans and grants stood at Rs61.4 billion.
Khyber-Pakhtunkhwa
Contrary to Punjab and Sindh, the KP’s budget was in deficit of Rs49.179 billion. Expenditures of this province were registered at Rs941.6 billion as compared to the revenues of Rs892.4 billion. The KP’s tax collection was recorded at Rs41.773billion in the last year, non-tax collection remained at Rs40 billion and federal loans and grants stood at Rs214.6 billion. The province received Rs595.96 billion from the federal government under NFC during the last fiscal year.
Balochistan
This province had also recorded almost balance budget. Balochistan expenditures had remained at Rs374.89 billion as compared to the revenues of Rs374.73 billion. Balochistan’s tax collection was recorded at Rs7.7 billion, non tax collection at Rs10.573 billion and federal loans and grants stood at Rs30.170 billion. The province received Rs305.068 billion from the federal government under NFC during the last fiscal year.
