During the first nine months (July-March) of the current fiscal year (2021-22), the federal government transferred an extra Rs. 598 billion to provincial governments under the National Finance Commission (NFC) Award, compared to the same time the previous fiscal year.
According to the Ministry of Finance, the Imran Khan-led government released Rs. 2,584 billion from the divisible pool to the four province governments under the NFC Award. During the first nine months of the previous fiscal year, the federal government transferred Rs. 1,986 billion to provincial governments under the NFC Award.
During the first nine months of the current fiscal year, Punjab’s portion of the NFC Award from the divisible pool grew by Rs. 301 billion to Rs. 1,274 billion, up from Rs. 973 billion during the same time the previous fiscal year.
Sindh’s share climbed by Rs. 152 billion to Rs. 646 billion in the first nine months of the current fiscal year, up from Rs. 494 billion in the same time the previous fiscal year.
During the first nine months of the current fiscal year, Khyber Pakhtunkhwa’s allotment increased by 106 billion rupees to Rs. 426 billion from Rs. 320 billion under the NFC Award, compared to the same time the previous fiscal year.
The Government of Balochistan’s share of the divisible pool under the NFC Award increased by Rs. 39 billion to Rs. 238 billion from Rs. 199 billion in the previous quarter.
The federal government would send Rs. 3.3 trillion to provincial governments under the NFC Award, while the federation will maintain Rs. 2.5 trillion from the divisible pool, according to budget estimates for 2021-22.
The rise of provinces covered by the NFC Award was mostly owing to the Federal Board of Revenue’s (FBR) improved revenue collection during the first nine months of the current fiscal year. During the first nine months of the current fiscal year, the FBR collected Rs. 4,384 billion in tax revenue.
The high import bill, mini-budget, and inflation have all contributed to the current fiscal year’s higher tax income. The government expects the FBR to collect Rs. 6.1 trillion in tax revenue this fiscal year, up from the previous forecast of Rs. 5.8 trillion.
