ISLAMABAD – Apart from announcing rewards to Balochistan and Khyber Pakhtoonkhwa provinces for showing surplus budgets in first quarter, federal government has decided to bear 50 per cent cost of forthcoming local bodies general elections while remaining 50 per cent were to be borne by provinces. Finance Minister Senator Mohammad Ishaq Dar presided over a meeting to monitor the National Finance Commission. Finance Minister disclosed that the federal government had decided to pay Rs.175.4 million and Rs. 296.9 million to Balochistan and Khyber Pukhtoonkhwa governments respectively as a reward for showing surplus in the first quarter (July-September) of the ongoing fiscal year 2013-2014. It would be pertinent to mention that the Finance Minister, during a meeting of the Council of Common Interest (CCI), had committed to give incentives to provinces if they showed surpluses. The payment, the Finance Minister said, should encourage other provinces as well.
According to figures of Finance Ministry, the four provincial governments recorded surplus budget of Rs 92.439 billion, as provincial expenditures were recorded at Rs 266.769 billion against the revenues of Rs 388.378 billion during first quarter (July-September) of the current fiscal year. According to the figures, the Punjab province recorded budget surplus of Rs 47.317 billion, Sindh province recorded budget surplus of Rs 33.081 billion, Khyber Pakhtunkhwa province recorded budget surplus of Rs 17.83 billion and Balochistan province recorded budget surplus of Rs 23.381 billion during first quarter (July-September) of the ongoing financial year.
The meeting also took up the issue of payment of expenditures to Election Commission of Pakistan for the forthcoming Local Bodies General Elections. It was decided that the Federal Government would bear fifty percent of the costs while the remaining fifty percent were to be borne by the provinces.
The Election Commission of Pakistan (ECP) had earlier sought Rs6 billion from the government to hold the local bodies (LB) elections in the country. Therefore, the government has decided to give Rs three billion and remaining three billion rupees would be borne by provinces for holding local body elections.
The issue of Federal Adjuster also came up for discussion. During the meeting, it was also decided that a committee be constituted under the chairmanship of Minister for Water and Power Khawaja Mohammad Asif which would present its recommendations well before the next meeting of CCI.
The meeting noted that during the period January-June, 2013, FBR reported tax collection of Rs1,025.5 billion. Out of this collection, the due share of the provinces (Punjab Rs.299.0 billion, Sindh Rs.141.9 billion, Khyber Pukhtoonkhwa Rs.94.6 billion and Balochistan Rs.57.1 billion) was disbursed to provinces.
For the entire financial year FBR collected revenue to the tune of Rs1,887.3 billion. Based on this due provincial share Rs.1099.8 billion (Punjab Rs.550.3 billion, Sindh Rs.261.1 billion, Khyber Pukhtoonkhwa Rsm174.2 bullion and Balochistan Rs.114.2 billion) were transferred to provinces. The above transfers for the Khyber Pukhtoonkhwa include 1% for War on Terror which was Rs.10.2 billion during the period under review and Rs.18.7 billion for the entire financial year.
The NFC Award also guarantees that the share of Balochistan province would be based on the budgetary projections irrespective of the FBR tax collection and the amount over and above the share based on actual collection would be borne by the federal government. The above transfers for Balochistan as such include Rs.4.6 billion additionally during the period under review and Rs.17.5 billion for the entire financial year.
In addition to the above transfers out of the divisible pool taxes, the net proceeds of the royalties on crude oil and natural gas, gas development surcharge and excise duty on natural gas were also transferred to provinces. The quantum of the amount were Punjab Rs.3.3 billion, Sindh Rs.26.7 billion, Khyber Pukhtoonkhwa Rs.10.6 billion and Balochistan Rs.3.7 billion during the period under review i.e. January-June, 2013. For entire financial year, the disbursed amounts were Punjab Rs.7.3 billion, Sindh Rs.46.4 billion, Khyber Pukhtoonkhwa Rs.18.2 billion and Balochistan Rs.8.8 billion.
NFC after thorough discussion approved the draft report subject to minor modifications proposed by the provinces. All the participants expressed their satisfaction over the implementation of NFC Award and thanked the Federal Finance Minister for his kind support and patronage.
Syed Murad Ali Shah, Advisor to Chief Minister Sindh on Finance, Siraj-ul-Haq, Finance Minister KPK, Mujtaba Shuja-ur-Rehman, Finance Minister Punjab, Khalid Langau, Finance Minister Balochistan, Khwaja Mohammad Asif, Federal Minister for Water and Power, Shahid Khaqan Abbasi, Federal Minister for Petroleum and Natural Resources and senior officials of the Ministry of Finance, federal and provincial government also attended the meeting.
Meanwhile, Finance Minister Senator Ishaq Dar on Monday said that the international financial institutions have started approaching Pakistan and expressed the confidence that foreign exchange reserve position would improve soon.
He said this while talking to His Highness Prince Karim Agha Khan. He briefed him about the state of economy and the measures taken by the government to redress macro-economic imbalances inherited by the present PML-N government.
Finance Minister Senator Ishaq Dar briefed His Highness that the PML-N government had inherited an economy with severe macro-economic imbalances and apprised him of the measures taken by the PML-N government to address them so that the economy could be revived and put on a path of sustainable growth.
The Finance Minister said that the medium term economic framework of the PML-N government envisages a decrease in the fiscal deficit from 8 to 4%, increase in growth rate from the present 3% to 7% by the end of next three years, increase in investment to GDP ratio to 20% and building up of foreign exchange reserves to $20 billion.
His Highness Prince Karim Agha Khan appreciated the PML-N Government for increasing the allocation for social safety net from Rs.40 billion to Rs.75 billion.
The Finance Minister said that the government has initiated the Prime Minister Youth Programme. Presently National Bank of Pakistan and the First Women Bank are participating in the programme.
The government, he said, was ready to extend similar conditions to Habib Bank Limited.
His Highness Prince Karim Agha Khan said that small and medium enterprises have critical role in the economy and welcomed the Prime Minister’s Youth Programme and that he would direct Habib Bank Limited to prepare a feasibility.
The Finance Minister also drew the attention of His Highness to the auction of spectrum license by the Government of Pakistan and hoped that Agha Khan Network would participate.
The Finance Minister said that the PML-N government is working on different projects to add quantum generation into the national grid and invited Agha Khan to invest in the energy sector especially in the hydel generation as the River Indus has the potential of generating 90,000MW of electricity. The Finance Minister also requested His Highness to diversify the investment of AKDN in Pakistan and look into Public Sector Entities.
