The Finance Ministry has expressed fears that the provinces might not be able to achieve the projected budget surplus of Rs 80 billion for the fiscal year 2011-12 due to election year and downward revision in revenue collection of the Federal Board of Revenue. Sources at the Ministry of Finance said the FBR revenue collection, which was originally estimated at Rs 2,381 billion for the current fiscal year, has been revised downward to Rs 2,193 billion. The decrease in FBR revenue collection would result in decline in provincial share from the divisible pool and consequently the provinces’ ability to generate surplus. Moreover, the Ministry of Finance has already revised estimated provincial surplus for the current fiscal year to Rs 50 billion from original projection of Rs 80 billion. The provincial transfer from the federal governments, which was estimated at Rs 1,562 billion for the current fiscal year, has now been revised downward to Rs 1444 billion, reflecting a shortfall of Rs 118 billion in provincial transfers, according to the budget strategy paper for 2013-16. The provinces closed their fiscal year in deficit by Rs 40 billion during the last fiscal year.
