PESHAWAR, Feb 11: Fiscal deficit of NWFP government in first half of current financial year has climbed to Rs4.174 billion owing to lower revenue receipts.

Fiscal accounts for the first six months reflects that the provincial government had sustained a net revenue shortfall of more than 150 per cent if compared with the deficit of the corresponding period of last financial year 2006-07.

Worried about the rising revenue shortfall, the financial managers of the provincial government feared that it would be difficult in the remaining portion of the fiscal year to arrange required resources for the growing recurrent and development expenditures.

“The federal government has to transfer the receipts as per the budget estimates,” said an official at Finance Department, while referring to an expected cut on fiscal transfers from the centre.

The federal government, said the official, had recently hinted at levying cut on fiscal transfers to the provinces mainly on account of mounting oil import bill.

According to statistics, the provincial government during first six months received more than Rs36 billion, out of which approximately Rs33 billion came from the centre under various heads.

These include proceeds against province’s share in federal divisible pool (FDP), net hydel profit, royalty on gas and oil and federal and foreign grants.

The provincial government’s own contribution to overall revenue base stood just at Rs3.471 billion including Rs1.092 billion as tax, Rs1.275 billion as non-tax and Rs1.104 billion as user charges.

Tax collecting agencies of the provincial government during the said period reported a net collection of Rs1.092 billion showing one per cent decrease, if compared to the collection of corresponding period of the last fiscal year.

Against overall collection of Rs36 billion, net expenditures were reported about Rs41.107 billion, which were 33 per cent more than the figures of corresponding period of the last financial year 2006-07.

Of the total expenditures of Rs41.107 billion, spending on current side remained at Rs26.552 billion, while development expenditures were Rs14.555.

Current expenditures, which include overall administrative cost of the government machinery and wage bill, in this period was 26 per cent more than the statistics of corresponding period of last financial year.

Likewise, the expenditures on development side had also witnessed a net increase of Rs4.729 billion comparing the spending of corresponding period of the last fiscal.

This left the provincial government with a revenue shortfall of Rs4.174 billion, which the financial managers believed would grow and even surpass the estimates set at the beginning of current fiscal year.

The government had estimated revenue shortfall at Rs9.699 billion, which is already Rs4.8 billion higher than the estimates of Medium Term Budgetary Framework (MTBF).

Under Provincial Reform Programme (PRP), which is financially assisted by the World Bank, the provincial government was bound to strictly follow the MTBF for revenue generation to expenditures.