'Local govts to get NFC benefits from next year' -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

‘Local govts to get NFC benefits from next year’

PESHAWAR, July 18 2006: The NWFP government will start passing on benefits to the district governments from the higher proceeds of the amended National Finance Commission (NFC) award from the next financial year, said official sources. The amended NFC award, applicable from July 1 last year, would bring in Rs9.2 billion more for the NWFP government during the current financial year in comparison with the previous one, said the sources. However, a major chunk of the higher NFC proceeds would be retained by the provincial government, they added.

Other than marginal increase effected under the non-salary head, the district governments would continue to get a collective total of Rs963 million for carrying out district-specific development schemes under their respective annual development programmes (ADPs) for the financial year 2006-07. While, in this respect, the size of the provincial government’s ADP has been raised to over Rs26.6 billion, from Rs21 billion last year, the amount specified for the districts’ ADPs has been kept at the previous year’s level.

“Since the district governments do not have the capacity to even spend Rs963 million in a single year, the size of their ADPs has not been enhanced,” said a finance manager of the province. However, the official sources said the provincial government had decided in principle to pass on the benefits of the higher NFC projections from the next financial year to the district governments. The government, said an official, had chalked out a plan to enhance the ADP size of the districts from the current level of Rs963 million to Rs1.1 billion in the financial year 2007-08.

From 2007-08 onwards, the size of districts’ ADP would be raised by 10 per cent every year. This would take the size of district ADPs to Rs1.2 billion in the 2008-09 and Rs1.3 billion in 2009-10, said the source. “The provincial government intends to put more resources at the disposal of the district governments during the current financial year as well for development works in case higher projections reflected to the province under the amended NFC award are materialised,” said the official. The NWFP has been projected to receive an all-time high of Rs36.9 billion as federal tax assignments and special grant or subvention of Rs9.7 billion under the amended NFC award during the 2006-07 financial year.

This would bring in Rs9.2 billion more for the provincial government under the said two heads in comparison with the previous financial year. Out of this increase, the district governments are set to get about Rs500 million under the non-salary account.
Source: Dawn