Govt disburses Rs1.5trln to provinces in seven months

ISLAMABAD: The government has disbursed more than half of the total funds allocated to provinces from divisible pool of the National Finance Commission during the first seven months of the current fiscal year of 2019/20, a senior official said on Thursday.

Additional secretary ministry of finance told the senate standing committee on finance and revenue that the federal government disbursed Rs1.501 trillion to all the four provinces out of the total size of divisible pool worth Rs2.596 trillion available with the government by January-end. Under the divisible pool, 57.5 percent share of the pool goes to provinces, while the federal government holds the remaining 42.5 percent. The meeting was held under the chairmanship of Member of the National Assembly (MNA) Faiz Ullah.

The secretary said the government transferred Rs746 billion to Punjab, Rs254 billion to Sindh, Rs236 billion to Khyber Pakhtunkhwa, and Rs164 billion to Balochistan.

The official said the government also made state transfers worth Rs64.9 billion out of the total allocated funds of Rs100 billion for 2019/20 as yet. Of the transfers, Punjab received Rs4.8 billion out of Rs7.4 billion. Sindh received Rs34.3 billion so far, out of Rs53.9 billion. Khyber Pakhtunkhwa obtained Rs16.4 billion out of Rs25.6 billion and Balochistan got Rs8.7 billion out of Rs13.7 billion.

The secretary said the provinces received their due share of funds under the state transfers and that included royalty on crude oil and natural gas, gas development surcharge, and excise duty on natural gas.

The committee was told that the government would not let the budget deficit surpass the annual target of 7.5 percent this fiscal year, as the government has multiple options of managing additional funds to meet extra expenditures.

The finance ministry’s additional secretary said the government wants to fully utilise the development budget of Rs701 billion under the public sector development program of 2019/20, as per the direction of the International Monetary Fund and Prime Minister Imran Khan.

The official expected debt servicing not to exceed the budget estimates in the current fiscal year. On civil government’s expenditures, the meeting was informed that Rs220 billion had been spent in the first seven months of the current fiscal year – out of the budgeted Rs440 billion. “These expenditures are totally under control,” the secretary said.

Federal Board of Revenue (FBR) Acting Chairman Seema Shakeel told the committee that the FBR had so far cleared Rs29 billion of refund claims out of Rs54 billion filed by 12,984 exporters.

MNA Qaiser Ahmed Shaikh said the FBR is slowly releasing the refunds contrary to its claims of settling them within 72 hours. It is still processing refunds of December. The committee’s chairman Faiz Ullah said businessmen are not satisfied with the new refund system of the FBR.

A representative of Faisalabad Chamber of Commerce and Industry said exporters are mulling strike if their demands are not met within two weeks. “There would be no exports and trade activities in the city then,” he said.

The businessman said the trade and industry wants the government to resolve issues related to prices of electricity and gas. The committee’s chairman said the committee is arranging a meeting of authorities, including Power Minister Omer Ayub Khan, with the exporters to sort out the problem.

All Pakistan Power Looms Association Chairman Waheed Khan said the condition of computerised national identity card (CNIC) for making purchases is denting trade activities.

However, FBR Member Policy (Inland Revenue) Hamid Ateeq said the government didn’t put any pressure in this regard during the first seven months. Though the government enforced the condition this month,there has been no slowdown in trade activities, he added.

Ateeq said if exporters believe that tax rate is high then the FBR is ready to talk on the issue. “But, there will be no compromise on CNIC condition.” MNA Ayesha Ghaus proposed that a sub-committee should be formed to sort out tax-related issues of exporters.

Faiz Ullah said since a sub-committee is already in place, no other sub-committee could be formed under the law. However, he decided to suspend the already established committee and form a sub-committee headed by Ramesh Kumar with Ayesha Ghaus and Nafeesa Shah as its members.

The committee would discuss in details the tax-related issues with the concerned stakeholders and finalise its recommendations within two weeks time. Faiz Ullah said FBR officials are undoubtedly facing heavy pressure to meet tax targets, but issues of businessmen are genuine and they should be resolved.