‘Punjab sound in finances’

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The Punjab government’s financial condition has been sound during the first half of 2011-12, a government handout said on Friday. The government released development funds to the tune of Rs 125 billion in the first six months of current fiscal. Out of these funds, an amount of Rs 50 billion was utilised. A spokesman of Punjab government said that the government did not receive any new loan from the State Bank during last two years. The older loan is being repaid according to agreement signed with SBP. Further, the Government has been opening each month with a surplus, while January 2012 was opened with a surplus of Rs 8.0 billion.
The spokesman said that due to structural mismatch between federal receipts (which are 80 percent of the total receipts of the provincial government) and provincial expenditure, the Government of Pakistan has allowed a uniform and formula based overdraft limits to all provinces. As the Federal receipts are received in tranches, the first on the 17th of the month and the second on the last day of the month, the provinces have to seek recourse to the overdraft as major provincial expenditures salary and pension are payable on the first day of the month. However, this overdraft is adjusted at the time of receipt of federal tranches.
He said each month was opened with a surplus since January, 2011, adding that the receivable amount from the Centre was between Rs 25 to 30 billion. “If these funds are received lump sum and future receipts of NFC Award from the Federal Government are received in time there may not even be any requirement to access the overdraft.” He said the federal government had borrowed an amount of Rs 826.0 billion during the current financial year from SBP and commercial banks to meet its fiscal deficit, adding that the deficit was approximately equal to 4.0 percent of gross domestic product against the annual target of 4.6 percent.