CHI - Out of budget estimate of Rs151 billion in federal transfers in current FY2007-08, the Sindh government has received Rs135 billion in 11 months under the heads of divisible pool/revenue assignments, straight transfers, 2.5 percent General Sales Tax and share in subvention in-aid/grants in-aid, The Nation learnt on Monday.
The federal government has revised the Sindh's share in federal transfers to Rs144 billion from Rs151 billion in current FY07-08, showing Rs7 billion deficits. Though, federal government had not indicated Sindh's share in budget estimate in the federal transfers of next financial year 2008-09 so far, but according to sources, the provincial finance department had made tentative estimate of Rs166 billion receipts of federal transfers for next fiscal.
In FY09 Sindh government is expected to receive Rs94 billion under the head of divisible pool/revenue assignments in next fiscal against budget estimated share of Rs81 billion of current FY07-08. The revenue assignments/federal divisible pool consisted of seven taxes of taxes on income, sales tax, federal excise duty, custom duties, capital value tax, wealth tax and GST on services which collected by FBR from provinces.
The statistics of finance department available with The Nation showed that Sindh has faced more than Rs7 billion deficit in federal transfers on account of revenue assignments/divisible pool so far.
While under the head of straight transfers, Sindh would get Rs42 billion in next FY2008-09 against Rs37 billion share of current FY2007-08. The straight transfers consisted on royalty on oil, surcharge on gas, excise duty on gas, royalty on gas and GST on services.
The second major set back of deficit to Sindh was in terms of less receipts from federal government under the head of straight transfers, official of Sindh finance department said, adding that despite increasing prices of gas and oil in international market, the federal government not intend to increase to Sindh's share in form of royalties on gas and crude oil and nor being provided due share estimated in annual budget.
Sindh has estimated its share of Rs23 billion from federal government under the head of 2.5 percent General sales Tax for next FY08-09 against Rs20 billion share of current FY07-08.
This 2.5 percent GST is property of local governments which was imposed by Nawaz Sharif government in 1998 against the abolition of Octoi and Zila Tax which was sole income for the districts governments. Under this revenue, Sindh was also facing shortfall from federal government, sources said and added, so far, more than Rs1.5 billion deficit had been registered in this tax. There was no substantial increase to be seen in Sindh's share in terms of Grant in-aid/subvention pool as Sindh to get Rs7 billion in this head in next fiscal. The subvention pool was introduced by unelected government during FY2000-01 as consensus was not found among the four provinces on the distribution formula of NFC Award.
The economic advisor of then federal government Ashfaq Hassan had made a formula of subvention pool under which NWFP was given more amounts in this head as grant in aid while Balochistan and Sindh the second and third beneficiaries of this pool.
The sources in finance department told The Nation that four provinces were looking towards the federal government to see the final estimate of federal transfers because the provinces mostly depend on the income of Islamabad. The Sindh as well as other provincial governments had not finalized the figures of annual development programmes and share of local governments so far.