ISLAMABAD-Provincial governments except Balochistan have once again failed to utilise their annual budgets that resulted in their surplus budgets during the previous fiscal year (FY23).
The four provincial governments recorded a budget surplus of Rs154.6 billion during the FY2023, as their expenditures remained at Rs5.144 trillion as compared to the revenues of Rs5.299 trillion. The provinces were supposed to give a budget surplus of Rs459 billion. However, they have a budget surplus of Rs154.6 billion.
The provincial governments’ surplus budget showed that they had not utilized their budgets on development activities in the provinces. The provinces had received a 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 provinces as like past have once again failed to utilize their annual budgets helping the federal government in restricting its budget deficit.
According to data from the ministry of finance, provincial governments had received Rs4.223 trillion from the federal government under the NFC in the year 2022-23. Meanwhile, four provinces had collected taxes of only Rs650 billion, provincial non-tax collection recorded at Rs165.9 billion.
On the other hand, provinces had spent Rs5.144 trillion and had returned Rs154.6 billion to the federal government to restrict its budget deficit. The country’s expenditures were recorded at Rs16.2 trillion as compared to the revenues of Rs9.6 trillion making a deficit of Rs6.5 trillion or 7.7 percent of the Gross Domestic Product (GDP) during previous financial year.
Primary balance, which is the difference between government’s revenue and its non-interest expenditure, recorded a deficit of Rs690 billion or 0.8 percent of the GDP during the period under review, according to the latest data of the ministry of finance. 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 province had recorded a budget surplus of Rs90.067 billion during the last fiscal year. The expenditures were registered at Rs2.335 trillion as compared to the revenues of Rs2.425 trillion. The major chunk of the revenues came from the federal government under a divisible pool. The Punjab government had received Rs2.076 trillion from federal government during the previous fiscal year. Meanwhile, the province had generated only Rs297.4 billion from its own sources and non-tax collection recorded at Rs81.8 billion.
The province had shown a budget surplus of Rs50.4 billion, as its expenditures were recorded at Rs1.45 trillion compared to the revenues of Rs1.501 trillion. The Sindh government has received Rs1.046 trillion from the federal government under the NFC during the period under review. The Sindh government collected Rs285.119 billion as tax, Rs33.2 billion as non-tax collection and federal loans and grants stood at Rs136.3 billion.
The KP’s budget was in surplus of Rs16.6 billion. Expenditures of this province were registered at Rs892.8 billion as compared to the revenues of Rs909.5 billion. The KP’s tax collection was recorded at Rs41.4 billion in the last year and non-tax collection remained at Rs37.134billion. The province has received Rs698.7 billion from the federal government under NFC during the last fiscal year.
Balochistan was the only province, which recorded a budget deficit. This province had recorded a deficit budget of Rs2.524 billion. Balochistan expenditures had remained at Rs465.9 billion as compared to the revenues of Rs463.4 billion. Balochistan’s tax collection was recorded at Rs25.7 billion, non tax collection at Rs13.7 billion and federal loans and grants stood at Rs22.33 billion. The province has received Rs401.6 billion from the federal government under NFC.