Islamabad - Provincial governments might struggle to generate surplus budget due to massive revenue collection shortfall of over Rs 115 billion during eight months (July-February) of the ongoing financial year 2013-2014.
Provincial governments would not get their due share in tax collection due to the Federal Board of Revenue’s inability to meet its target during current fiscal year. FBR has collected Rs 1348 billion during July-February period of year 2013-2014 as against target of Rs 1464 billion, leaving shortfall at Rs 116 billion.
“The government had downward revised the revenue collection target to Rs 2345 billion from budgeted target of Rs 2475 billion after facing massive shortfall in eight months. The provincial share from the divisible pool will defiantly reduce”, a finance ministry official said on Saturday. The Federal Board of Revenue (FBR)’s inability to achieve its tax collection target would not let provincial governments to generate surplus budgets during ongoing financial year 2013-2014, he added. The Nation tried to contact spokesperson of the Finance Ministry Rana Asad Amin to take his comment on the issue, but he was not available.
However, the FBR’s officials are of the view that government would most likely miss the revenue collection target by wide margin of over Rs 130 billion during current fiscal year that would reduce the provincial governments share in divisible pool . The federal government in budget 2013-2014 has projected the provinces’ share at Rs 1,502 billion from the federal divisible pool , up 23 per cent over Rs 1,221 billion for the current fiscal year. However, the federal government would now be unable to transfer budgeted Rs 1502 billion to the provinces, as amount would be lesser than it.
Apart from provincial governments, the federal government would also struggle to restrict budget deficit at 6.3 per cent of the GDP (Rs 1651 billion) during ongoing financial year 2013-2014 due to unlikely budget surplus of the provinces. The federal government had desired of getting Rs23 billion in savings from the provincial governments to keep its overall budget deficit at lower ends.
According to the figures of finance ministry, the four provincial governments recorded surplus budget of Rs 168.111 billion, as provincial expenditures were recorded at Rs 266.769 billion against the revenues of Rs 800.06 billion during first half (July-December) of the current fiscal year.
However, keeping in view the previous years practice, provincial governments would register deficit budgets in second half (January to June) of the current year, as their spending will pick pace in this period.