punjab fiscal resources review - lahore school of economics旁遮普的财政资源回顾拉合尔经济学院

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1、99ShahidAmjadChaudhryPunjabFiscalResourcesReviewShahidAmjadChaudhryAbstractThisstudyraisespolicyissuesarisingfromthefactthatthepresenttax-expenditurepoliciesandinstitutionalset-upatboththeprovincialandlocalgovernmentlevelsoftheProvinceofthePunjabaredatedandneedrevision.Ther

2、eisnowanactiveawarenesswithinthePunjabProvincethatsubstantialchangesarenecessary.Thebroadoutlinesoftheserequiredchangeswhichhavebeenidentifiedinthisstudy,asfollows:i)TheProvincialGovernmentneedstorecognisethatthe1997NationalFinanceCommission(NFC)Award’sprojectedhighlevelofF

3、ederalDivisiblePoolRevenuesareunlikelytomaterialiseinthelightofthesubstantialchangesmadeintaxpoliciesbythepost1997-AwardFederalGovernmentaswellasbythedepressedstateoftheeconomy.AsaresultthehistoricalpatternofFederalTransferscoveringmorethan85percentofconsolidatedPunjabProvi

4、ncialandLocalGovernmentexpendituresisunlikelytobeeverrepeated.Infactthe1997-98coverageof75percentislikelytogodownevenfurtherandthisgapneedstobefilledbyactiveresourcemobilisationandexpenditurecurtailmentmeasures.ii)ThedeclineinFederaltransfershasmeantthattherevenuesurplus(Fe

5、deralTransfersplusownresourcesminuscurrentexpenditures)availableforfundingthePunjab’sdevelopmentexpenditureshavealsodeclined–from75percentin1996-97toanestimated13percentin1997-98.Thisgaphasbeenfilled(inroughlyequalproportions)byamassiveincreaseinCashDevelopmentLoan(CDLs)fro

6、mtheFederalGovernment,ForeignDebtonlentbytheFederalGovernment,(primarilyfromtheWorldBank)andDraw-downofProvincialReserves.Thefirstcarriesamarketrateofinterest(about17percentperannum)whiletheforeignloans(largelyunderSAP)carryconcessionalratesofinterest.Heretheproposedstrateg

7、ywouldbetoincreasetherevenuesurplus,phaseouttherelativvelymoreexpensiveCDLsandborrowforeignfunds(throughtheFederalGovernment)onlyonconcessionalIDAterms(i.e.0.25percentinterest,50yearsrepaymentplusforeignexchangerisk).99ShahidAmjadChaudhryiii)Debtservice(onbothdomesticandfor

8、eigndebt)totheFederalGovernmentisincreasingrapidly(9percentofprovincialrevenuesin1