The federal government transferred an additional Rs. 598 billion to the provincial governments under the National Finance Commission (NFC) Award during the first nine months (July-March) of the current fiscal year (2021-22) as compared to the same period of the last fiscal year.
According to the Ministry of Finance, the Imran Khan-led government had transferred funds worth Rs. 2,584 billion to the four provincial governments under the NFC Award from the divisible pool. The federal government had transferred Rs. 1,986 billion to the provincial governments under the NFC Award during the first nine months of the last fiscal year.
Punjab’s share in the NFC Award from the divisible pool increased by Rs. 301 billion to Rs. 1,274 billion from Rs. 973 billion during the first nine months of the current fiscal year as compared to the same period in the last fiscal year.
Sindh’s share also increased by Rs. 152 billion to Rs. 646 billion from Rs. 494 billion during the first nine months of the current fiscal year as compared to the same period of the last fiscal year.
Khyber Pakhtunkhwa’s allotment also swelled by Rs. 106 billion to Rs. 426 billion from Rs. 320 billion under the NFC Award during the first nine months of the current fiscal year as compared to the same period in the last fiscal year.
The share of the Government of Balochistan in the divisible pool under the NFC Award also surged by Rs. 39 billion to Rs. 238 from Rs. 199 billion during the last corresponding period.
According to the budget 2021-22 estimates, the federal government will transfer Rs. 3.3 trillion to the provincial governments under the NFC Award while the federation will keep Rs. 2.5 trillion from the divisible pool.
The increase in the share of provinces under the NFC Award was mainly due to better revenue collection by the Federal Board of Revenue (FBR) during the first nine months of the current fiscal year. The FBR collected tax revenue worth Rs. 4,384 billion during the first nine months of the current fiscal year.
The high import bill, mini-budget, and inflation have contributed to the increased tax revenue during the current fiscal year. The government is expecting the FBR to collect Rs. 6.1 trillion tax revenue instead of the original estimate of Rs. 5.8 trillion during the current fiscal year.
