Punjab will get about Rs 20 billion less from the Federal Divisible Pool transfers this year resulting into fiscal constraints and negative impact on budgetary projections of the provincial government, finance department sources told Business Recorder.
They said Punjab was expecting Rs 533.830 billion transfers from the federal government during the current financial year as the provincial budget is largely a function of federal divisible pool receipts. They said based on the reported collection of first 11 months of FY2011-12 to the tune of Rs 1,610 billion, it would be difficult for FBR to achieve the assigned target of Rs 1,952 billion as collection of Rs 342 billion would be required in June 2012.
Consequently, Federal Divisible Pool transfers to Punjab government are likely to fall short by an amount of Rs 15-20 billion, they estimated. Under the seventh NFC Award Punjab's share is 51.74 per cent, Sindh 24.55 per cent, KPK 14.62 per cent and Balochistan 9.9 per cent.
They said under seventh NFC GST on services has now been organised in the provincial domain. This has provided a window of opportunity for provincial government to improve its share of revenue collection in the overall resource envelope. To fully harness the true potential of GST on services, Punjab government has decided to establish Punjab Revenue Authority, which will initially be responsible for collection of GST on services from financial year 2012-13. Similarly, they said through structural reforms and administrative simplifications in the existing tax collection framework, provincial government would be striving to further improve its revenue collection in FY 2012-13.
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