ISLAMABAD - The federal government has transferred Rs1199 billion to the provinces under National Finance Commission (NFC) award that enabled the four federating units to record surplus budgets in first half of the current fiscal year.

The four provincial governments have recorded budget surplus of Rs273.2 billion during July to December period of FY2019, as their expenditures remained at Rs1.22 trillion as compared to the revenues of Rs1.47 trillion. The federal government had projected provinces to give budget surplus of Rs285.6 billion during the entire current fiscal year.

The major reason behind the provincial surplus budgets was the federal government’s transfers under the NFC award. The centre has transferred Rs1199 billion to the four provinces, which is 46.3 percent of the annual share (Rs2590 billion) of the provinces under NFC award. The federal government is bound to transfer 57.5 percent of the resources to the four provinces under the 7th NFC award. According to the NFC award, the federal government has to transfer Rs2590 billion to four provinces during ongoing fiscal year.

The government could not transfer half of the annual transfers in first six months of the year 2018-19 due to the FBR’s failure in tax collection. The provisional tax collection of the FBR fetched Rs1,775 billion for first six months (July-December) period of the current fiscal year against the envisaged target of Rs1,948.7 billion, witnessing mammoth tax shortfall of Rs173 billion in the ongoing financial year.

According to a summary of consolidated federal and provincial budgetary operations, the federal government has transferred Rs1199 billion to four provinces under NFC during first half of the ongoing financial year.  The provinces revenue after receiving their share from federal government has gone up to Rs1471.8 billion in July to December period of the current fiscal year. On the other hand, provinces expenditures remained at Rs1224.3 billion during July-December period enabling four provinces to record budget surplus of Rs273.2 billion.

The provincial governments’ surplus budget of Rs273.2 billion helped the federal government to restrict the budget at 2.7 percent of the GDP (Rs1.03 trillion). Otherwise, the budget deficit would have further increased. The federal government projected the provincial governments to provide Rs285.6 billion surplus over the full fiscal year, according to the documents of ministry of finance.

 Punjab

The Punjab government’s revenue was recorded at Rs707.5 billion as compared to the expenditures of Rs579.5 trillion, making surplus of Rs119 billion. The Punjab government has received Rs583.3 billion from the federal government during first half months of the current fiscal year, which is 45.5 percent of the annual share of Rs1282 billion.

 Sindh

The Sindh province has registered budget surplus of Rs98.3 billion as its revenues remained at Rs398.4 billion as against expenditures of Rs354 billion. The Sindh government has received Rs297 billion from the federal government during July to December period of the year 2018-19. The Sindh would receive Rs648.8 billion during entire current fiscal year.

 Khyber-Pakhtunkhwa

The Khyber Pakhtunkhwa’s revenues were recorded at Rs231.8 billion as against its expenditures of Rs86.6 billion, making surplus of Rs195 billion. The province has received Rs195.9 billion from the federal government under NFC during first half of the current fiscal year. The KP received one percent additional funds under the NFC Award due to the war on terror.

 Balochistan

The Balochistan province has given budget surplus of Rs43.3 billion as its expenditures were recorded at Rs95.8 billion as compared to the revenues of Rs134.1 billion. The province has received Rs123 billion in first six months from the federal government, which is 58.7 percent of Rs233.2 billion to be released in the ongoing financial year under NFC.