The government has increased the share of provinces in revenue receipts by 22 percent, to Rs 568.338 billion in 2008-09, from Rs 466 billion of the outgoing fiscal year. According to budget documents, the share of Punjab would increase to Rs 292.758 billion from Rs 236.239 billion.

Sindh would get Rs 168.924 billion, followed by NWFP Rs 72 billion, and Balochistan Rs 34.443 billion. The share of the provinces from the net proceeds of taxes and duties in 2008-08 would be 43.75 percent. Net proceeds of divisible pool have been arrived at by deducting 5 percent collection charges by the federal government.

The federal share in the net proceeds of divisible pool for the fiscal 2008-09 is 56.25 percent, with the remainder 43.75 percent going to the four provinces under Distribution or Revenue and Grant-in-Aid (Amendment) Order, 2006.

The provinces are able to finance their development schemes as well as improve their cash balance for federal transfers on account of divisible pool, straight transfers, grants and external assistance. Self-financing of PSDP by provinces during 2008-09 has been estimated at Rs 124.407 billion.

Copyright Business Recorder, 2008