Balochistan budget and consolidated deficit

The 6.7 billion rupees deficit proposed by the Balochistan Finance Minister Mir Asim Kurd will have implications for not only the province, but also for the federal government. The federal budget envisaged a consolidated provinces' surplus of 125 billion rupees. As each province announced the budget in its respective parliament, the onus on the remaining province to achieve the 125 billion rupees target increased.
As Balochistan was the last province to announce its budget to achieve the federal government's target for the consolidated surplus would have implied a 124 billion rupees surplus - an unrealistic figure to say the least, given that Balochistan's proposed total outlay was of 164 billion rupees for the entire year. With the four provinces having presented their budgets, the actual consolidated deficit is around 5.58 billion rupees instead of the envisaged 125 billion rupees surplus.
The Centre does have leverage over the federal transfers with many maintaining that the federal government may choose to deduct each province's share of the targeted surplus in direct proportion to its share in the 7th National Finance Commission (NFC) Award. Last year too, the federal government was compelled to reduce its actual allocation to the provinces, relative to the budgetary allocation due to a severe paucity of funds.
There is thus a precedence, however, informed sources revealed to the Business Recorder that the provinces are likely to resist any such move on the part of the Centre by employing the logic that it is the Centre's responsibility to achieve its fiscal deficit target and not that of the provinces.
While there is some merit to this argument, yet the provinces cannot possibly expect the electorate to absolve them of their own input to inflation (that would be fuelled if the federal deficit rises) or indeed if they divorce themselves from fiscal discipline. However, considering that all the provinces including Balochistan have failed to meet the consolidated surplus, the conclusion that may be drawn is that the federal government either did not take the provinces on board or having taken them on board, the provinces all revisited the Centre's targets and decided to disregard it.
Kurd revealed a deficit of 6.6 billion rupees, but failed to mention how it would be bridged. He also proudly proclaimed that Balochistan's Public Sector Development Programme (PSDP) was the country's only PSDP free of interest payment on loans. The reason he explained was "we are determined not to put pressure of foreign loans on our future generations."
While these sentiments may win him approbation from non-economists, yet the fact remains that the international community does extend loans free of interest to countries/regions, which are severely underdeveloped. It is, however, a sardonic comment on the economic health of Balochistan that even 64 years after independence, this province is still eligible for interest-free loans.
Kurd also boasted that "our government is the first civil government in which the financial situation is stable and the cash balance position is positive." This is an objective of all governments, federal as well as provincial. However, those who may take this as an indication of improved revenue generation or indeed improved governance in terms of expenditure must note that Balochistan continues to perform poorly in terms of literacy rates (especially of women), health as well as in terms of employment opportunities.
The Balochistan budget was, however, neither unique nor indeed focused on the sector that has the capacity to effectively deal with long-term political issues facing the province: education. This is in spite of the fact that the largest chunk of the current revenue expenditure was earmarked for education - 19 million rupees. The minister claimed that the province introduced major reforms (unclear what these were), reduced expenditures (a demand from the Centre to all provinces, given the rise in the budget deficit last year), lowered inequality and poverty and improved education and health facilities. He, however, did not back up his claims with statistics.